Freelance isn’t ‘free’: a blueprint for Australia?

According to the Australian Bureau of Statistics, there were 2.7 million casual employees and one million independent contractors in Australia in August 2023. The figures are unclear though, since some freelancers also work in full or part-time positions out of financial necessity and are not reporting their freelance work as an official means of employment.

In November last year, New York Governor Kathy Hochul signed a New York state bill (S5026) into law. That bill is the Freelance Isn’t Free Act, which protects freelance and contract workers (including journalists, authors and writers in contracts) from wage theft. It also provides a minimum period for payment and avenues to recoup unpaid wages.

The bill was backed by freelance and author advocacy bodies, including the Freelancers Union, led by Executive Director Rafael Espinal.

The Freelance Isn’t Free Act isn’t new, but until November last year, it had only covered New York City. Legislation S.5026/A.6040 now extends protections to freelancers across all of New York State through additional oversight and enforcement from the New York State Attorney General’s Office.

Espinal tells LSJ, “The Freelance Isn’t Free Act was passed in NYC in 2017 and was the first of its kind globally. It was created solely to protect freelancers, focusing on mandating written contracts, timely payments, and dispute resolution, with the support of the local government.”

“The conversation has since proliferated around the United States in cities like Los Angeles and Seattle, and around the globe.

“We’ve seen similar legislation in the Philippines through a law called the Freelancers Protection Act, proving that these issues are not just local and can be transferrable to other states and nations. Media companies across the United States have been downsizing and diminishing jobs, especially for writers. The closure of outlets like Vice underscores the urgent need for the expansion of protections the Act offers, especially as more staff writers are forced into freelancing due to the lack of traditional salaried positions.”

Australian freelancers: on shaky ground?

Australian freelancers have general protections under the Fair Work Act 2009 (Cth) and the Independent Contractors Act 2006 (Cth), but they fall short of the sort of comprehensive, broad protections and rights enabled by the Freelance Isn’t Free Act in New York. For example, if a freelancer (also referred to as an independent contractor) doesn’t get paid for an invoice, the Fair Work Ombudsman can’t enforce payment, putting the onus on the freelancer to seek legal advice or to pursue their own legal action, often at considerable personal expense.

Australia’s Media Entertainment & Arts Alliance (MEAA) has increasingly advocated and campaigned for freelance journalists, media and arts workers. The MEAA’s National Freelance Committee published “Freelancers For Fair Rates” in 2021, the basis for their industry charter released in 2022 that provided for minimum pay and conditions for journalists and media workers. The Freelance Journalists’ Charter of Rights was built upon surveys that revealed most freelancers earn well below the average weekly income of Australians (30 per cent were earning less than $10,000 per annum), and the majority (two-thirds) of respondents fear for their comparatively low superannuation.

In the report, the MEAA said, “Freelance journalism is operating without the safety net of workplace rights … There are thousands of freelance journalists in Australia, working as reporters and writers, photographers, producers, subeditors, illustrators, researchers and in other editorial roles. As any freelancer will tell you: there are no minimum rates of pay; there is no job security; superannuation is almost non-existent; payments are often late; and kill fees rare. Freelancers can also struggle to retain copyright over their work and are not afforded protection from defamation that in-house journalists have under the cover of their employer.”

An employment lawyer’s perspective

Josh Bornstein, National Head of Employment Law at Maurice Blackburn, tells LSJ, “Freelancers, or independent contractors, have always had much narrower rights in the workplace because the theory is that they’re self-employed business people. In reality, they’re vulnerable.”

“Over time, there’s been some move to provide greater regulation and protection and there’s now laws protecting contractors and sub-contractors from certain forms of discrimination in the Fair Work Act. However, there’s such an imbalance of power that freelancers are averse to taking cases on. There’s no legislation for freelancers to be paid in a timely matter.”

Bornstein says he is not an expert on the Freelance Isn’t Free Act, but says, “it provides for a system of payment with a requirement that the hiring organisation pay within a 30-day period of the work being done. That’s sensational as long as the requirement is enforceable. It’s a gamechanger that stops freelancers having to chase up unpaid invoices.”

He says Australia has anti-discrimination provisions that are roughly equivalent to those in the New York freelance legislation, however “there’s an argument that the Fair Work Act could be amended to ensure that freelancers aren’t prey to retaliatory behaviour.”

The legislation and landscape that freelancers face in Australia is not fully fit-for-purpose, Bornstein says.

“It’s an area where there’s still widespread exploitation, it’s not sufficiently moderated, and non-payment, underpayment, blacklisting is frequent,” he says,

“So, we’ve got a long way to go. The law has been changed to deregulate the labour market and provide more power to employers, although since the Albanese government have come in, they’re starting to enhance worker bargaining power, beginning with the move towards better regulation of the gig worker economy.”

MEAA voices concerns

Cassie Derrick is the director of the media section with MEAA.  She explains their current freelance committee started coming together in around 2017 to “begin the work to shift our focus as a union and campaigning for industry-wide change toward addressing the serious exploitation of freelancers in our industry.”

That work culminated in the Freelance Charter of Rights in 2021.

“In the last decade, the number of in-house journalists has basically halved, and yet journalism output and consumption has not come close to that,” says Derrick.

“The number of freelancers has drastically grown … [yet they] have no access to the protections provided by the Fair Work Act, and so they’re without much of a safety net for pay and conditions.

“The biggest challenge is the lack of a minimum rate of pay. Without a floor on pay, it’s a race to the bottom. Where freelancers are not unionised, we are seeing rates continue to go backwards. The other major issues are timely pay – some bad faith employers will only pay following publication of a completed work, rather than on acceptance. Some of our members have worked hard on a piece, submitted it, then gone months or years without payment. We’ve also got concerns about superannuation, and no ‘kill fees’ for the cancellation of commissioned work.”

The NY ‘Freelance Isn’t Free Act’

Derrick says the New York-based Freelance Isn’t Free Act “was a great win” but that “ultimately, basic laws that allow freelancers to enforce their rights will be essential for Australia.”

“There is a long way to go in addressing the power imbalance between freelancers and outlets,” she says.

The Freelance Isn’t Free Act took effect on May 15, 2017. Local Law 140 of 2016 established and strengthened protections for freelance workers by ensuring their rights to a written contract, full payment within a minimum time frame, and the ability to be awarded statutory damages, double damages, and attorney’s fees upon the violation of their rights. The Act also introduced a civil penalty of up to US$25,000 for companies deemed guilty of repeat violations. Rather than a “set and forget” law, the Department of Consumer and Worker Protection (DCWP) is required to report on the efficacy of the Act at regular intervals, which resulted in the latest five-year assessment published on January 11 this year.

Broad protection for freelancers 

There are three key benefits of the Freelance Isn’t Free Act for independent workers. Firstly, the onus of responsibility being largely put on the hiring party to act fairly and transparently. Secondly, the Act extends to all independent contractors regardless of immigration status. Thirdly, freelancers can enforce their rights without the right of retaliation from the hiring party and the expectation of both their costs being covered and damages upon winning their case.

Under the Act, a contract valued at over $800, or multiple contracts between the same hiring party and freelancer within a 120-day period that amount to $800 or more, must be in writing. That contract has to clearly state the service being provided, the rate of compensation and the date of payment (which must be no later than 30 days after the contracted work has been completed). Whether valued at $800 or less, all freelancers – whether under oral contracts or written – must be paid in full and on time, with no allowance for the hiring party to change the rate of compensation once work has commenced.

The DCRW Navigation Program is the first step for freelancers to initiate a complaint under the Act, which gives the hiring party a 20-day response period. According to the Freelance Isn’t Free five-year assessment report, freelancers submitted 2,542 complaints between the fiscal years of 2019 through to 2023. The vast majority (2,184) related to late or non-payment, followed by 264 complaints relating to the hiring party’s failure to provide a written contract, and 212 complaints relating to retaliatory action by the hiring party. Over that same period, 773 freelancers were paid a total of $2.9 million after the initial complaint was filed with the DCWP, though this is self-reported and may underrepresent the actual amount recovered.

In July 2023, New York City and L’Officiel USA Inc. settled a lawsuit in the New York State Supreme Court that had begun in 2021. There had been more than 20 complaints from writers, photographers, editors, graphic designers and artists relating to the publication and thousands in unpaid invoices. Under the settlement agreement, L’Officiel USA Inc. must pay more than $275,000, which is double the amount it owed to 41 freelance workers who made complaints to the DCWP, make a payment to the City, and comply with the Freelance Isn’t Free Act going forward. L’Officiel must also pay double damages to any other freelance worker who files a claim showing they were not fully paid for services performed.

In a statement, New York City Corporation Counsel Sylvia O. Hinds-Radix said, ““Freelancers must be paid for their labour, not only because they add to the city’s economic and cultural vibrancy — it’s the law.”