Illinois Passes Freelance Workers Protection Laws: Understanding the Freelance Worker Protection Act

Authored by Katherine M. Flett with assistance from Kristina M. Stevenson, contributor

In a pioneering move, Illinois has become the first state to enact comprehensive protection laws for freelance workers. The Freelance Worker Protection Act (FWPA), set to take effect on July 1, 2024, introduces stringent regulations governing the engagement, treatment, and compensation of freelance workers within the state. This legislation, which is gaining steam nationwide with other states, aims to safeguard the rights and interests of freelance workers, who play an increasingly vital role in today’s dynamic economy.

Defining Freelance Workers

The FWPA defines a freelance worker as an independent contractor who offers products or services within Illinois or for Illinois-based entities, in exchange for compensation exceeding $500. This compensation can stem from a single contract or multiple contracts over a 120-day period. However, certain exceptions apply. Construction service providers, employees of construction contractors, and those already subject to traditional employer-employee relationships under the Illinois Wage Payment and Collections Act are excluded from the definition.

Key Protections Offered by FWPA

The FWPA outlines three requirements regarding hiring freelance workers:

• Written Contracts
  • Contracts with freelance workers valued at $500 or more must be documented in writing.
  • The Illinois Department of Labor is tasked with providing a contract template on its website, featuring essential elements such as contact information of parties, itemization of services/products to be provided, compensation details, payment timelines, and invoicing procedures.
  • Contracting entities must retain these contracts for a minimum of two years.
• Timely Payment
  • Contracting entities are required to remunerate freelance workers within 30 days of service completion or product delivery.
  • Notably, installment payments cannot be offered if they result in delayed full payment within the stipulated 30-day timeframe.
• Non-Discrimination
  • FWPA prohibits any form of discriminatory, retaliatory, or harassing behavior against freelance workers who exercise their rights under the Act.
  • Contracting entities are barred from penalizing, threatening, or intimidating freelancers who seek to assert their entitlements.

Enforcement and Liability

Freelance workers have a two-year window from the time of final compensation to file complaints against contracting entities. Complaints can be directed to the Illinois Department of Labor or filed in an Illinois circuit court. The Act does not mandate filing with the Department of Labor before proceeding to court.

The penalties for FWPA violations vary based on the nature of the breach. Violations of the written contract requirement entitle freelance workers to statutory damages equivalent to the contract’s value or $500, whichever is higher. Delayed payments trigger double the underpayment amount, along with legal costs, injunctive relief, and reasonable attorney fees. Nondiscrimination breaches incur damages equating to the contract’s value for each violation, coupled with costs and attorney fees.

The Freelance Worker Protection Act signifies an advancement in safeguarding the rights of freelance workers in Illinois. Contracting entities should take proactive steps to understand their obligations under the Act and ensure compliance to avoid legal liabilities. Consulting an attorney is advised to navigate the complexities of this legislation effectively.

Posted by Attorney Katherine M. Flett and Kristina M. Stevenson.  Flett is a member of the litigation team whose primary focus is on assisting clients in business litigation, employment law, real estate, insurance defense, and bankruptcy matters. Stevenson, law clerk, is a student at Saint Louis University School of Law and a graduate of  Saint Louis University.