SB-988: California’s Freelance Worker Protection Act – What Your Business Needs to Know by January 1, 2025

Starting January 1, 2025, California businesses hiring freelance workers must comply with significant new requirements under Senate Bill No. 988, the Freelance Worker Protection Act (FWPA). This law enhances protections for freelance workers by establishing mandatory contract terms, timely payment rules, and penalties for noncompliance.

If your business relies on independent contractors, understanding and adhering to these changes is critical to avoid legal and financial risks.

Key Provisions of SB-988

Written Contracts Required
Any agreement with a freelance worker involving $250 or more must be in writing. The contract must include:

1. 1. Names and addresses of both parties.
   2. Itemized list of services with compensation rates and payment method.
   3. Due date for payment or a mechanism to determine it.
   4. Deadlines for the freelance worker to submit work or invoices.

Businesses must retain these contracts for a minimum of four years.

Timely Payment

1. 1. Payment must be made on or before the agreed-upon date specified in the contract.
   2. If no date is specified, payment must be made within 30 days of service completion.

Prohibition of Adverse Actions
Employers cannot retaliate against freelance workers who:

1. 1. Oppose noncompliant practices.
   2. Seek to enforce their rights under SB-988.
   3. Participate in enforcement proceedings.

Penalties for Noncompliance
Freelancers may file civil lawsuits for violations, with remedies including:

1. 1. Attorney’s fees and court costs.
   2. Injunctive relief.
   3. Damages of up to twice the unpaid compensation.
   4. Additional penalties for failure to provide a written contract or timely payment.

Why This Matters for Your Business

The FWPA applies to all contracts entered into or renewed on or after January 1, 2025, and introduces a private right of action for freelance workers. Businesses that fail to comply face increased liability, including financial penalties and reputational damage.

Steps to Prepare Your Business for SB-988

Review Current Practices
Assess how your business engages with freelancers and identify gaps in compliance.

Implement Standardized Contracts
Create contract templates meeting the FWPA’s requirements and ensure they are used consistently.

Train Staff
Educate your team on the new law, particularly HR, legal, and procurement staff involved in engaging freelance workers.

Streamline Payment Processes
Establish mechanisms to ensure timely and accurate payments to freelancers.

Retain Records
Implement a record-keeping system to securely store freelancer contracts for at least four years.

How Anelya Law Offices Can Help

Navigating California’s evolving legal landscape can be challenging. At Anelya Law Offices, we specialize in helping businesses stay compliant with employment laws, including the Freelance Worker Protection Act. Our services include:

• Contract drafting and policy updates.
• Compliance training for your team.
• Legal advice to minimize liability and streamline freelance worker management.

Don’t let SB-988 catch you unprepared. Contact Anelya Law Offices today for expert guidance and practical solutions to protect your business and maintain strong relationships with your freelance workforce.