Portside Date: December 30, 2015

Author: Lydia DePillis

Date of source: December 7, 2015

The Washington Post

By Lydia DePillis

Rachel Northrop shouldn’t have to use her credit card to buy groceries.

She’s a successful young professional, after all, freelancing for several trade journals about tea and coffee production after having published a book on the subject in 2013. But earlier this year, the checks from one magazine arrived later and later. Then the company stopped returning phone calls, without paying Northrop $9,000 she’s owed—leaving her struggling to make rent.

“Because I’m not being paid regularly, I’ve had to reevaluate whether I can do it, even though I‘m working consistently,” says Northrop, 27, of maintaining her freelance lifestyle. Regular employees at least have some administrative recourse if a company shorts them on wages — being a contractor means she’d have to take the magazine to small claims court in order to collect.

“Non-payment paralyzes the most motivated sector of people, who are willing to work on their own schedule, be independent and self sufficient,” Northrop says. “When other people hear this, it makes people think 'let me stay at this boring job that I don’t even like.’”

New York City, however, might soon see a fix for that problem. A bill being introduced in the City Council Monday would require all employers to put contracts in writing, impose civil and criminal penalties for taking longer than 30 days to deliver payments, and award double damages plus attorneys fees to contractors who’ve been stiffed — similar to the protections now enjoyed by regular employees.

“It’s clear that there are some companies that have made it a business practice to not pay freelancers,” says the legislation’s sponsor Councilman Brad Lander, whose Brooklyn district is full of them. "I see this as one critical step in one broader project of building protections for workers in the independent economy.”

That constituency has been getting more vocal in recent years. Lander got the idea for the bill from the Freelancer’s Union, which now claims 280,000 members (joining is free; the 20-year-old organization funds itself through a for-profit arm that provides insurance benefits). In a survey, 70 percent of members said they lost some money on account of delinquent clients.

“It’s almost become something that people view as the price of doing business, just accepting that they won’t get paid,” says Sara Horowitz, the Freelancers Union’s founder and director. “It’s really crazy, because it’s a lot of money, and it’s really bad practice for companies to think they can do this.”

It might seem odd that a freelancer would work without a written agreement. Although oral contracts are enforceable, it's more difficult to get a judgment based on emails or conversations, especially if a deadline wasn’t specified. But particularly in the fast-moving restaurant, tech, and arts worlds, asking for a formal document can mean you miss out on precious work. Freelancers are sometimes pressured into lowering their rates retroactively when clients say they can’t pay, rather than going through the time and expense of a lawsuit.

“You get into the habit of winging it. And by the time you have a much larger project, you kind of want to dive right into it,” says Lily Meyer, who works as an independent theater lighting designer, web designer, calligrapher, and event planner. “But when you’re waiting for the check, you’re like 'gosh I wish I’d figured this out ahead of time. Sometimes people won’t take you if they think there’s too much admin going on. It’s a real spiral.”

The bill’s list of endorsers includes many of the city’s coworking spaces and tech schools like General Assembly. It also includes Make the Road New York, which works mostly with the city's low-income Hispanic population. Non-payment is as much of a problem for day laborers who get picked up for construction jobs, and often aren’t paid what they’re promised. Then there’s the National Domestic Workers Alliance, whose housekeepers and nannies sometimes work on contract and don’t have the resources to sue when employers don’t hold up their end of the deal.

For all these kinds of employers, the bill’s backers hope to prompt the adoption of systems that can handle payment more smoothly. Non-payment isn’t a problem, for example, with on-demand services like Uber and Taskrabbit, where contractors are paid through an app. The contracting platforms LiquidTalent, Prompt.ly, and Work Market — which create an easy way for companies to manage their freelancers — are also supporting the legislation.

“It’s not like a fat cat with a cigar in his mouth,” Meyer says, of the companies she’s found have been slow to cut checks. “A lot of it is part of institutional infrastructure that was built in a different era, and doesn’t have the kind of provisions for the kind of work that we do.”

Lydia DePillis is a reporter focusing on labor, business, and housing. She previously worked at The New Republic and the Washington City Paper. She's from Seattle. Get the Wonkbook newsletter Your daily cheat sheet on economic and domestic policy from Wonkblog.