According to the Public Policy Institute of California, 11.5% of California’s workforce report being self-employed, though some combine freelance work with a wage or salary position. Of the approximate 2.2 million who are self-employed, 1.4 million are independent contractors, which includes gig workers. 

While freelance work makes it much easier to adjust your schedule to fit your needs, it’s also easy for freelancers to be taken advantage of. That’s why California works hard to protect its freelance workers. If you’re not aware of freelance worker protections and the new laws for 2025, Shegerian Conniff has the breakdown you need to understand your rights.

Introducing Senate Bill No. 988 – The Freelance Worker Protection Act (FWPA)

On January 1, 2025, the FWPA went into effect. It requires freelancers and most independent contractors and hiring parties (clients) to have agreements in place that meet the law’s rules.

It’s an expansion of existing laws that use the ABC Test to determine if someone is truly a freelance worker or should be classified as an employee. The new bill requires a contract to be on file for a minimum of four years, and those professional services must pay $250 or more.

Under the FWPA, payments for services must be paid by the specified date or at the beginning of the contract. If the contract doesn’t specify a deadline for payment, the client must pay within 30 days from the completion of the work. 

In addition, there’s a requirement that a contract be drawn up and include specific information. Once this contract is signed, it’s enforceable. If a freelance worker cannot be penalized for opposing any illegal action, seeking to file a complaint because that worker’s rights are being violated, or filing a lawsuit against the client for violating the contract.

Freelancers whose rights are violated can file a civil lawsuit, or a public prosecutor can file a lawsuit for the freelancer. Additionally, damages for the following can be included in that lawsuit.

• Legal fees
• Two times the amount of unpaid compensation as detailed in the contract
• An additional penalty of $1,000
• Damages equal to the value of the contract or work performed, whichever amount is greater

FWPA doesn’t apply to clients who are part of the U.S. government, a foreign government, the State of California or a subdivision of the State of California, or a family member. If you have questions about the FWPA, contact your Los Angeles employment attorneys at Shegerian Conniff today.

A Contract Is Legally Required

You have a right to a written contract, and it’s now backed by California law. That contract needs to protect your rights. Consider talking to an employment attorney to have a contract drafted. If you do it yourself or your client draws up a contract, make sure the contract includes the following.

• Names and mailing addresses for both parties.
• The list of services to be provided including the fee/rate for those services and how payment will be made.
• The date when services are to be turned in, and how they’re submitted or completed. The date needs to consider how long it takes accounting to verify and issue payment.
• The date when payment will be made.

Once the contract is signed, the client cannot offer to pay faster if a discount is provided or add more work to the contract. If more work is needed, a new contract is required. If the client refuses to pay you because they want a discount as it took you less time than expected, that’s not your problem. Suppose the client hired you to ghostwrite a children’s book but decides you should also do the illustrations after the contract is signed, that’s also a violation of the law and unenforceable.

Even without a contract, you can back up your claims if there was an oral contract or you have emails, text messages, and voicemails asking you to do the work for X amount. As long as there is an agreement made and you did the work as it was explained to you, you’re protected.

In addition to this information, independent contractors and other freelancers should consider a clause that discusses how disagreements are resolved. If you’re tasked with painting an office building’s lobby, and the manager tells you light yellow, but the CEO wanted beige. It’s not your mistake, so you shouldn’t have to repaint the lobby without a new contract and compensation.

Are You Truly a Freelance Worker?

How do you know if you qualify as a freelance worker? The ABC Test is the first place to start. Can you answer “yes” to all three questions?

Are you free from the control and direction of the client when it comes to the work?

If you must log in and use company software to track that you’re online and working between 9 a.m. and 5 p.m., you’re not a freelancer. Freelancers make their own schedules.

Do you do work that’s outside of the business or client’s usual course of business?

A company cannot hire you to work as a freelancer if you’re doing work that’s the same as the business they run. For example, you make sourdough bread and a bakery hires you to make the bread for them in your home kitchen. They sell the bread from their bakery. You’re in the same business, so you’re not a freelancer. If you still have questions, your Los Angeles employment lawyers at Shegerian Conniff can help get you answers.

Are you a trade or occupation that’s the same as the work you’re doing for the client?

The work you take on as a freelancer must be the same as the business you promote. Suppose you’re a bookkeeper and a new restaurant asks you to do their taxes. Tax preparation is outside of the restaurant’s business expertise, but it is yours so you are a freelancer.

There’s also a Bordello Test that can help determine if a worker is a contractor or paid employee. It’s used when the situation is difficult to determine. The bottom line comes down to how much control the client has over where you do the work, when you do the work, and how you do the work. Bordello Test questions include:

• Is the work a necessary part of the client’s business?
• Does the client supply the tools, instruments, and work area?
• Does the freelancer have the tools needed to do the job independently?
• Is the work done with supervision or independently?
• How long are the services being performed?
• Is the pay by the job or hourly?
• Can the employer fire the worker at will or is there a contract?
• Is profit and loss under the control of the freelancer?

Ask an Employment Discrimination Attorney for Guidance

If you’re uncertain you’re a freelancer or believe your client has violated your contract, talk to Shegerian Conniff. Our attorneys offer free consultations and help you understand your rights and the next steps to take. Misclassifying workers as freelancers is a crime and clients face fines of up to $25,000 per violation. It’s important to seek legal advice to ensure you’re not being taken advantage of.