Hosting a Sporting Event in New York: Remember the Freelance Isn’t Free Act

On August 28, 2024, Freelance Isn’t Free Act (“NY State FIFA”) went into effect state-wide. For New York City businesses, this might feel familiar. As some may recall, New York City has its own FIFA that went into effect in May of 2017 (“NYC FIFA”). These FIFA laws serve the purpose of protecting independent contractors and the growing number of individuals working on a project (or gig) basis. These laws require hiring parties to have written contracts with certain freelance workers.

It has become common place for leagues (of all sport) to host tours and play games throughout the country. It follows that when these special events happen in New York venues, it is imperative that the entities hosting such events take into account the NY State FIFA Law. Let’s take a look at this law…

We Aren’t a New York Company. We Just are Hosting a Match in New York State. Does this Apply to us?

The NY State FIFA places obligations on “Hiring Parties.” According to the statute, a “Hiring Party” is any person who retains a freelance worker, excluding municipalities or other governmental entity. It is worth noting that neither the state nor city law include in their definition where the hiring party must be located. With that being said, these FIFA laws protect freelance workers in New York. It follows that prudent companies hosting sporting events in New York will adhere to this law.

Who is a Freelance Worker?

The FIFA statutes defines Freelance worker as “any natural person or organization composed of no more than one natural person…” who is engaged to provide services in exchange for compensation. It is worth noting that the incorporated status of the “one person” (ie- LLC, Inc.) does not matter. The bottom line is these laws apply to situations when a entity engages one individual to provide services, regardless of whether they are incorporated or not.

Who is Not a Freelance Worker?

The FIFA laws do not apply to lawyers, medical professionals, sales representatives or construction contractors. It goes without being said that entities may want to consider written agreements with the above referenced professionals.

When is a Written Contract Required?

The law requires a written contract between the hiring party and the freelancer for services valued at $800 or more. Now it must be noted that this value is either by itself or in the aggregate of all the contracts with the same hiring party and freelancer in the immediately preceding 120 days. Let’s break it down.

• Single Project Valued at $800 or More. A written contract is requirement when an entity hires a freelancer for one project that will result in the freelancer earning $800 or more.

• Multiple Projects More Occurring Within 120 Days Valued at a Total of $800 or More. A written contract is also required when an entity engages a freelancer for a multiple projects that (1) in the aggregate meet or exceed the $800 threshold, and (2) occur within 120 days of each other.

It follows that it may be worth establishing a policy issuing written contracts at the outset of all freelancer relationships. This will minimize the overhead of tracking the value of services in 120 day increments.

Required Contract Terms

The statute identifies the minimum required contractual terms as follows:

• Parties. Name and mailing address of the parties.

• Services. Itemization of services to be provided.

• Value. Value of the services along with rate and method of compensation.

• Timing of Payment. Date on which the hiring party must pay, or the mechanism by which such date will be determined. If there is no specified date in the contract, then payment is due within 30 days after the completion of work. Lastly, once the Freelancer has commenced work, the hiring party cannot require that the Freelancer accept less than the agreed upon compensation.

• Submission of Services Rendered. Date the freelancer must submit a list of services rendered to the hiring party. It must be noted that this is the added requirement that is not included in the NY City FIFA.

Record-Keeping Requirements

Hiring parties must retain freelance contracts for 6 years.

Discrimination and Retaliation Prohibited

The statute sets out that discrimination and retaliation are prohibited. Hiring parties cannot “take any action that is reasonably likely to deter a Freelancers from exercising their rights under the NY State law.” Entities will be exposed to claims when they refuse to engage with a freelancer who requests a written contract or who attempts to reinforce the written contract.

Violations

The penalties incurred depends on the violation. Causes of action founded in discrimination or failure to timely pay, have a 6 year statute of limitations. These violations carry penalties including: double damages, injunctive relief and “any other remedies deemed appropriate.”

Actions involving a violation in the written contract, carry a 2 year statute of limitation and statutory damages of $250.

Thoughts Moving Forward

Generally it is a good habit to document all service relationships. This allows businesses to track what work is being done and by whom. Since New York requires all entities to follow this law, it generally is a good habit that leagues, teams and other businesses who are putting on sporting events in New York, memorialize service relationships and maintain records of same.