On September 28, 2024 Governor Newsom signed SB 988, the Freelance Worker Protection Act, and its key provisions became law on January 1, 2025. The FWPA creates baseline contract and payment protections for many freelancers and small one-person contracting entities, and it gives freelancers tools to enforce those rights.
Who’s covered
The law defines a “freelance worker” narrowly: a person or organization composed of no more than one person (whether incorporated or using a trade name) hired as a bona fide independent contractor to provide professional services for $250 or more — either on a single contract or aggregated with contracts from the same hiring party over the prior 120 days. The FWPA applies to contracts entered into or renewed on or after January 1, 2025.
Written contract requirement
One of the FWPA’s bedrock rules is that contracts must be in writing. A hiring party must furnish the freelancer a signed copy (physical or electronic) and keep the contract on file for no less than four years. That written contract must include, at minimum, key terms such as the parties’ names and mailing addresses, the scope of services and deliverables, applicable rates/fees and the method of payment, the date payment is due (or how it’s calculated), any expense reimbursement terms, ownership of intellectual property, and termination or cancellation terms.
Timing of payment
The FWPA requires hiring parties to pay the compensation set out in the contract on or before the date specified. If the contract does not specify a payment date, the law defaults to payment within 30 days after the freelance worker completes the services. This strengthens predictability for freelancers who historically have faced delayed or disputed payments.
Anti-retaliation and enforcement
The law prohibits hiring parties from discriminating against or taking adverse action toward a freelance worker for asserting rights under the FWPA (for example, seeking payment or enforcing the statute). An aggrieved freelance worker — and in some circumstances the Labor Commissioner or a public prosecutor — may bring a civil action to enforce the FWPA’s provisions. Remedies and penalties depend on the violation and are handled through civil enforcement.
Practical takeaways
If you haven’t already, it’s vital to review your agreements with freelancers and other vendors who may fall under the FWPA’s protections. Check to ensure your agreement addresses all of the required terms, and if you find an agreement is deficient, work to get an updated agreement in place. You’ll also want to update your hiring and accounting teams to ensure everyone is aware of the new requirements and prepared to meet updated obligations if new agreements are being signed.
