New Legislation Affecting Freelancers This 2024: What You Need to Know

Written By: Rosanna

July 22, 2024 — The landscape of freelancing in the United States is set to undergo significant changes due to new legislation enacted this year. These laws aim to provide greater protection and benefits for freelancers, while also imposing new requirements that professionals in the gig economy need to be aware of. Here’s a breakdown of the key elements of this new legislation and how it may impact freelancers.

Key Provisions of the New Legislation

Enhanced Benefits: One of the most significant aspects of the new law is the introduction of mandatory benefits for freelancers. Freelancers are now entitled to access affordable health insurance plans through a newly established marketplace specifically designed for gig workers. Additionally, freelancers will have the option to participate in a state-sponsored retirement savings plan, making it easier to save for the future.

Payment Protection: The legislation introduces stricter regulations on payment terms to protect freelancers from late or non-payment. Clients are now required to pay freelancers within 30 days of invoice submission. Failure to do so will result in penalties and interest charges, providing a much-needed financial safeguard for freelancers who often face cash flow issues due to delayed payments.

Simplified Tax Filing: Recognizing the complexity of tax filing for freelancers, the new law mandates the creation of a simplified tax filing system. This system will provide freelancers with tools to easily track income and expenses, calculate quarterly tax payments, and ensure compliance with tax obligations. The aim is to reduce the administrative burden and help freelancers avoid penalties for late or incorrect filings.

Right to Collective Bargaining: In a landmark move, the legislation grants freelancers the right to collectively bargain. This means that freelancers can now form or join unions to negotiate better terms and conditions with clients, including fair wages, reasonable deadlines, and dispute resolution processes.

Clear Classification Criteria: To address the ongoing issue of worker misclassification, the new law establishes clear criteria to distinguish between employees and independent contractors. This is intended to prevent companies from misclassifying workers to avoid providing benefits and protections. Companies found violating these criteria will face substantial fines.

Implications for Freelancers

The new legislation is poised to bring several benefits to freelancers, but it also comes with responsibilities that need careful attention.

Increased Security and Stability: Access to health insurance and retirement savings plans will offer freelancers greater financial security and stability. This could make freelancing a more viable long-term career choice for many.

Improved Cash Flow Management: The new payment protection rules are expected to improve cash flow management for freelancers, ensuring they receive timely payments for their work.

Administrative Ease: The simplified tax filing system will help freelancers manage their finances more effectively, reducing the risk of errors and penalties.

Empowerment through Collective Bargaining: The ability to collectively bargain will empower freelancers to demand better working conditions and compensation, potentially leading to a more balanced freelancer-client relationship.

Challenges and Considerations

While the new legislation brings many positive changes, freelancers will need to navigate new requirements and adjust their business practices accordingly.

Compliance with New Rules: Freelancers must ensure they understand and comply with the new rules, particularly regarding tax filing and payment terms. Non-compliance could result in penalties.

Union Membership: Those interested in collective bargaining will need to explore union membership and understand the implications of joining a union.

Monitoring Client Compliance: Freelancers will need to be vigilant about ensuring their clients comply with the new payment terms and classification criteria.

The new legislation affecting freelancers this 2024 represents a significant step forward in providing protections and benefits for gig workers. While it introduces new responsibilities, the overall impact is expected to be positive, offering greater security, stability, and empowerment for freelancers. As these changes take effect, freelancers should stay informed and adapt their practices to fully benefit from the new legal landscape.