What is California’s Freelance Worker Protection Act?
The Freelance Worker Protection Act (FWPA) is a new law in California, effective January 1, 2025, aimed at ensuring fair payment and contract transparency for freelancers. Under this law, any contract for services valued at $250 or more must be in writing, and hiring entities must follow strict payment timelines. The law provides freelancers with legal protection against non-payment and retaliation, ensuring a more stable working environment for independent contractors.
How Does the Freelance Worker Protection Act Affect Me as a Freelancer or Contractor?
This section explains how the Freelance Worker Protection Act (FWPA) impacts freelancers and independent contractors in California. It highlights key aspects of the law that freelancers need to be aware of, including the requirement for written contracts for jobs over $250, timely payments, record-keeping obligations, and legal protections against non-payment or retaliation. This law is designed to provide freelancers with more financial security and transparency while ensuring that businesses hiring them follow clear payment and contract guidelines.
In simpler terms, this means that if you are a freelancer in California, you are now legally entitled to:
- Written Contracts: You are legally entitled to a written contract for projects over $250.
- Timely Payments: Employers must pay you on or before the contract’s due date or within 30 days of completion if no date is specified.
- Record Keeping: You must keep copies of your contracts for at least four years.
- Legal Protection: You have the right to take legal action if an employer fails to pay you or retaliates against you for asserting your rights.
How Does the Freelance Worker Protection Act Affect Me as an Employer Who Uses Contractors?
This section means that if you hire freelancers or independent contractors in California, the Freelance Worker Protection Act (FWPA) introduces new legal obligations you must follow to remain compliant. The law sets specific rules that businesses must adhere to when working with freelancers. Essentially, this law ensures that businesses hiring freelancers act transparently, follow fair payment practices, and maintain clear documentation to protect both parties. If you’re a business owner who regularly works with contractors, it’s important to adjust your contracting and payment processes to align with these new regulations.
If your business hires freelancers or independent contractors, the FWPA introduces new compliance requirements, including:
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Mandatory Written Contracts: You must provide a written agreement outlining services, payment terms, and other details.
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Payment Deadlines: Payments must be made on time—either by the contract’s due date or within 30 days if no date is specified.
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Record Retention: You must keep all freelancer contracts for at least four years.
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No Retaliation: You cannot take punitive actions against freelancers who assert their rights under this law.
What Are the Main Rules Surrounding the Freelance Worker Protection Act?
The FWPA has key provisions that freelancers and businesses must follow:
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Contracts are required for any freelancer engagement over $250.
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Contracts must include freelancer and hiring entity names, payment details, scope of work, and delivery timelines.
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Freelancers must be paid by the date specified in the contract or within 30 days if no date is given.
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Employers must retain contracts for four years.
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Freelancers can take legal action if they are not paid on time.
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Employers cannot retaliate against freelancers who exercise their rights.
How Can I Make Sure I Am Compliant as a Contractor?
To stay compliant as a freelancer, consider the following steps:
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Use written contracts for any job over $250.
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Clearly define payment terms and store a copy of each agreement.
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Track your hours and deliverables to ensure accurate invoicing.
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Send invoices on time and follow up on overdue payments.
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Keep contracts on file for at least four years.
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Know your rights and take legal action if necessary.
How Can I Make Sure I Am Compliant as an Employer?
As a business owner hiring freelancers, follow these steps to remain compliant:
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Always provide a written contract for projects over $250.
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Clearly outline payment terms and ensure freelancers are paid on time.
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Retain contract copies for at least four years.
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Avoid retaliation against freelancers exercising their legal rights.
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Use a system to track freelancer payments and deadlines to prevent delays.
How Clockwyz Helps with California’s Freelance Worker Protection Act Compliance
Clockwyz is a productivity and time management platform that helps freelancers and businesses stay organized, manage contracts, and ensure compliance with the FWPA. Here’s how:
For Freelancers:
✅ Contract Management – Store and organize written agreements for easy access.
✅ Time Tracking – Log hours and tasks for accurate invoicing.
✅ Invoice Tracking – Connect clients and customers to projects for accurate invoicing.
✅ AI Insights – Optimize pricing and work efficiency based on past projects.
✅ Document Storage – Keep records for four years to remain legally compliant.
For Employers:
✅ Contract Compliance – Generate, store, and track freelancer agreements.
✅ Invoicing and Budgeting – Create projects’ scope and budget and connect rates to make sure you never go over costs.
✅ Centralized Record-Keeping – Retain contracts for the required four-year period.
✅ Task & Deadline Management – Track project milestones to avoid payment disputes.
✅ AI-Powered Capabilities – Get AI insights and more to view contractors’ hours and rates for projects.
With Clockwyz, freelancers and businesses can easily adapt to California’s new law, ensuring smooth operations and legal compliance. Stay ahead of the curve and start using Clockwyz today! 🚀