Public Act 103-0417
 
HB1122 EnrolledLRB103 04895 SPS 49905 b

    AN ACT concerning employment.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 1. Short title. This Act may be cited as the
Freelance Worker Protection Act.
 
    Section 5. Definitions. As used in this Act:
    "Construction" has the meaning set forth in Section 5 of
the Employee Classification Act.
    "Department" means the Department of Labor.
    "Director" means the Director of Labor or the Director's
designee.
    "Freelance worker" means a natural person who is hired or
retained as an independent contractor by a contracting entity
to provide products or services in Illinois or for a
contracting entity located in Illinois in exchange for an
amount equal to or greater than $500, either in a single
contract or when aggregated with all contracts for products or
services between the same contracting entity and the freelance
worker during the immediately preceding 120 days. "Freelance
worker" does not include an individual performing construction
services, an individual performing services as an employee
under Section 10 of the Employee Classification Act, or an
employee as defined in Section 2 of the Illinois Wage Payment
and Collection Act.
    "Contracting entity" means any person who retains a
freelance worker to provide any service, other than:
        (1) the United States government;
        (2) the State of Illinois;
        (3) a unit of local government, including school
    districts; or
        (4) any foreign government.
    "Natural person" means an individual human being.
    "Person" means any natural person, individual,
corporation, business enterprise or other legal entity, either
public or private, and any legal successor, representative,
agent or agency of that individual, corporation, business
enterprise, or legal entity.
 
    Section 10. Payment of compensation for freelance workers.
    (a) Except as otherwise provided by law, a freelance
worker shall be paid the contracted compensation amount on or
before the date the compensation is due under the terms of the
contract. If the contract does not specify when the hiring
party must pay the contracted compensation or the mechanism by
which the date will be determined, compensation shall be due
no later than 30 days after the completion of the freelance
worker's services under the contract.
    (b) Once a freelance worker has commenced preparation of
the product or performance of the services under the contract,
the contracting entity shall not require as a condition of
timely payment that the freelance worker accept less
compensation than the amount of the contracted compensation.
 
    Section 15. Contract for products and services of
freelance workers.
    (a) Whenever a contracting entity retains a freelance
worker, the contract for such products or services shall be
reduced to writing. The contracting entity shall furnish a
copy of the written contract, either physically or
electronically, to the freelance worker.
    (b) The written contract for the product and service of a
freelance worker shall include, at a minimum, the following
information:
        (1) the name and contact information of both the
    contracting entity and the freelance worker, including the
    mailing address of the contracting entity;
        (2) an itemization of all products and services to be
    provided by the freelance worker, the value of the
    products and services to be provided under the terms of
    the contract, and the rate and method of compensation;
        (3) the date on which the contracting entity must pay
    the contracted compensation or the mechanism by which such
    date will be determined, which shall be no later than 30
    days after the products or services are provided; and
        (4) the date by which a freelance worker must submit a
    list of products or services rendered under such contract
    to the contracting entity, if such a list is required in
    order to meet any internal processing deadlines of the
    contracting entity for the purposes of compensation being
    timely rendered by the agreed-upon date as stipulated in
    paragraph (3).
    (c) The contracting entity shall retain the contract for
the service of a freelance worker for no less than 2 years and
shall make such contract available to the Department upon
request.
    (d) The Department shall make available model contracts on
its website for use by the general public at no cost. Such
model contracts shall be made available in English and in the 8
languages most commonly spoken by limited English proficient
individuals in the State.
 
    Section 20. Nondiscrimination. No contracting entity shall
threaten, intimidate, discipline, harass, deny a freelance
opportunity to, or take any other action that penalizes a
freelance worker for, or is reasonably likely to deter a
freelance worker from, exercising or attempting to exercise
any right guaranteed by this Act, or from obtaining any future
work opportunity because the freelance worker has done so.
 
    Section 25. Complaint procedure.
    (a) A freelance worker may file a complaint with the
Department alleging a violation of the Act by submitting a
completed form, provided by the Department, and by submitting
copies of all supporting documentation. The Department is
authorized to request or require any information the Director
deems relevant to the complaint or to its reporting
requirements under Section 50, including, but not limited to:
        (1) the general sector or occupation of the freelance
    worker submitting a claim under this Act;
        (2) the county where the work by the freelance work
    was performed, if in Illinois; and
        (3) at the discretion of the freelance worker, the
    demographic data of the freelance worker submitting a
    claim under this Act.
    (b) Complaints alleging violation of Section 10, 15, or 20
shall be filed within 2 years after the date the final
compensation was due. Complaints shall be reviewed by the
Department to determine whether there is cause for the
Department to initiate the process of facilitating the
exchange of information between the parties. The Department is
not required to initiate an information facilitation process
if either party to the contract has initiated a civil action in
a court of competent jurisdiction alleging a violation of this
chapter or a breach of contract arising out of the contract
that is the subject of the complaint filed under this Act,
unless such civil action has been dismissed without prejudice
to future claims; or either party to the contract has filed a
claim or complaint before any administrative agency under any
local, State, or federal law alleging a breach of contract
that is the subject of the complaint filed under this Act,
unless the administrative claim or complaint has been
withdrawn or dismissed without prejudice to future claims.
Failure of a contracting entity to keep adequate records or
provide written contract as required by this Act shall not
operate as a bar to a freelance worker filing a complaint.
    (c) Each freelance worker who files a completed complaint
alleging a violation of this Act or a rule adopted thereunder
shall be provided with a written description of the
anticipated processing of the complaint, including
notification to the contracting entity and the contracting
entity's opportunity to respond.
    (d) The Department shall, within 20 days of receiving a
complaint alleging a violation of this Act, initiate the
information facilitation process by sending the contracting
entity named in the complaint a written notice of the
complaint, or by notifying the freelance worker that the
Department lacks jurisdiction to initiate such process. When
the Department initiates this process, the notice of complaint
shall: (i) inform the contracting entity that a complaint has
been filed alleging a violation of this Act; (ii) detail the
civil remedies available to a freelance worker for violations
of this Act by a contracting entity; (iii) include a copy of
the complaint; and (iv) state that failure to respond to the
complaint by the deadline established in paragraph (1) of
subsection (e) creates a rebuttable presumption in any civil
action commenced in accordance with this Act that the
contracting entity committed the violations alleged in the
complaint. The Department shall send such notice by certified
mail.
    (e) Response.
        (1) Within 20 days of receiving the notice of
    complaint, the contracting entity identified in the
    complaint shall send the Director one of the following:
            (A) For a complaint under Section 10, a written
        statement that the freelance worker has been paid in
        full and proof of such payment.
            (B) For a complaint under Section 10, a written
        statement that the freelance worker has not been paid
        in full and the reasons for the failure to provide such
        payment.
            (C) For a complaint under Section 15 or 20, a
        defense against the alleged violation.
        (2) If the contracting entity identified in the
    complaint does not respond to the notice within 20 days,
    such failure to respond creates a rebuttable presumption
    in any civil action commenced in accordance with this Act
    that the contracting entity committed the violations
    alleged in the complaint. Within 20 days of receiving a
    written response, the Director shall send the freelance
    worker a copy of:
            (A) the contracting entity's response;
            (B) any enclosures submitted with the response;
            (C) materials informing the freelance worker about
        the freelance worker's right to bring an action in a
        court of competent jurisdiction; and
            (D) any other information about the status of the
        complaint.
        (3) If the director receives no response to the notice
    of complaint within the time provided by subsection (a),
    the Director shall mail a notice of non-response to both
    the freelance worker and the contracting entity by regular
    mail and shall include with such notice proof that the
    Director previously mailed the notice of complaint to the
    contracting entity by certified mail. Upon satisfying the
    requirements of this paragraph, the Director may close the
    case.
    (f) Attorney General powers.
        (1) Whenever the Attorney General has reasonable cause
    to believe that any person or entity is engaged in a
    pattern and practice prohibited by this Act, the Attorney
    General may initiate or intervene in a civil action in the
    name of the People of the State of Illinois in any
    appropriate court to obtain appropriate relief.
        (2) Before initiating an action, the Attorney General
    may conduct an investigation and may:
            (A) require an individual or entity to file a
        statement or report in writing under oath or
        otherwise, as to all information the Attorney General
        may consider necessary;
            (B) examine under oath any person alleged to have
        participated in or with knowledge of the alleged
        violation; or
            (C) issue subpoenas or conduct hearings in aid of
        any investigation.
        (3) Service by the Attorney General of any notice
    requiring a person or entity to file a statement or
    report, or of a subpoena upon any person or entity, shall
    be made:
            (A) personally by delivery of a duly executed copy
        thereof to the person to be served or, if a person is
        not a natural person, in the manner provided in the
        Code of Civil Procedure when a complaint is filed; or
            (B) by mailing by certified mail a duly executed
        copy thereof to the person to be served at the person's
        last known abode or principal place of business within
        this State or, if a person is not a natural person, in
        the manner provided in the Code of Civil Procedure
        when a complaint is filed.
        The Attorney General may compel compliance with
    investigative demands under this Section through an order
    by any court of competent jurisdiction.
        (4)(A) In an action brought under this Act, the
    Attorney General may obtain, as a remedy, monetary damages
    to the State, restitution, and equitable relief, including
    any permanent or preliminary injunction, temporary
    restraining order, or other order, including an order
    enjoining the defendant from engaging in a violation, or
    order any action as may be appropriate. In addition, the
    Attorney General may request and the court may impose a
    civil penalty not to exceed $5,000 for each violation or
    $10,000 for each repeat violation within a 5-year period.
    For purposes of this Section, each violation of this Act
    for each person who was subject to an agreement in
    violation of this Act shall constitute a separate and
    distinct violation.
        (B) A civil penalty imposed under this subsection
    shall be deposited into the Attorney General Court Ordered
    and Voluntary Compliance Payment Projects Fund. Moneys in
    the Fund shall be used, subject to appropriation, for the
    performance of any function pertaining to the exercise of
    the duties of the Attorney General, including, but not
    limited to, enforcement of any law of this State and
    conducting public education programs; however, any moneys
    in the Fund that are required by the court or by an
    agreement to be used for a particular purpose shall be
    used for that purpose.
    (g) Nothing in this Act shall be construed to prevent any
freelance worker from making complaint or prosecuting his or
her own claim for compensation. Any freelance worker aggrieved
by a violation of this Act or any rule adopted under this Act
may file suit in circuit court of Illinois, in the county where
the alleged violation occurred or where any freelance worker
who is party to the action resides, without regard to
exhaustion of any alternative administrative remedies provided
in this Act. Actions may be brought by one or more freelance
workers for and on behalf of themselves and other freelance
workers similarly situated.
    (h) Nothing in this Act shall be construed to limit the
authority of the State's Attorney of any county to prosecute
actions for violation of this Act or to enforce the provisions
thereof independently and without specific direction of the
Department.
 
    Section 30. Civil enforcement.
    (a) Any freelance worker not timely paid final
compensation by a contracting entity as required by Section 10
shall be entitled to recover through civil action double the
amount of any such underpayments, injunctive relief, and other
such remedies as may be appropriate. In a civil action for
violation of Section 10, such freelance worker shall also be
entitled to recover costs and all reasonable attorney's fees.
A civil complaint alleging violation of Section 10 shall be
filed within 2 years after the date the final compensation was
due.
    (b) Any freelance worker who was retained in violation of
paragraphs (a) or (b) of Section 15 despite the freelance
worker's request for a written contract prior to commencing
the contracted work as required by Section 15 shall be
entitled to recover through a civil action statutory damages
of $500. A freelance worker who prevails on a claim alleging
violation of Section 15 and on one or more claims under other
Sections shall be awarded statutory damages equal to the value
of the underlying contract or $500, whichever is greater, in
addition to the other remedies provided. Civil complaints
alleging violation of Section 15 shall be filed within 2 years
after the date the final compensation was due.
    (c) Any freelance worker who is threatened, intimidated,
disciplined, harassed, denied a freelance opportunity, or
penalized by a contracting entity in violation of Section 20
shall be entitled to recover through a civil action statutory
damages equal to the value of the underlying contract for each
violation of Section 20. In a civil action for violation of
Section 20, such freelance worker shall also recover costs and
all reasonable attorney's fees.
 
    Section 35. Public policy and intent.
    (a) The provisions of this Act shall apply only to
contracts taking effect after the effective date of this Act.
    (b) Except as otherwise provided by law, any provision of
a contract purporting to waive rights under this Act is void as
against public policy.
    (c) The provisions of this Act are intended to supplement,
and do not diminish or replace, any other basis of liability,
remedy, or requirement established by statute or common law.
    (d) Failure to comply with this Section does not render
any contract between a contracting entity and a freelance
worker void in total, voidable, or otherwise impair any
obligation, claim, or right related to the contract, nor does
it constitute a defense to any action or proceeding to
enforce, or for breach of, such contract.
    (e) No provision of this Act relating to freelance workers
shall be construed as providing a determination about the
legal classification of any such worker as an employee or
independent contractor.
 
    Section 40. Public awareness. Subject to appropriation,
the Department may conduct a public awareness campaign
regarding this Act that, at a minimum, includes making
information available on its website, otherwise informing
contracting entities of the provisions of this Act, and
establishing a means for assistance by a natural person
through phone or email.
 
    Section 45. Reports. One year after the effective date of
this Act, and by November 1 every 5 years thereafter, the
Department shall submit to the General Assembly and publish on
its website a report regarding freelance contracting and
payment practices. The report shall include, but is not
limited to:
        (1) the number of complaints received by the
    Department under this Act;
        (2) the value of the contracts disaggregated into
    ranges of $500 and by the Section of this Act the
    associated contracting entity is alleged to have violated;
        (3) the numbers of responses and non-responses
    received from contracting entities by the Department
    disaggregated by contract value into ranges of $500 and by
    the Section of this Act the associated contracting entity
    is alleged to have violated;
        (4) the general sector or occupation of the freelance
    workers submitting claims in accordance with this Act;
        (5) the counties where violations of this Act are
    alleged to have occurred, if in Illinois, including the
    number of violations from each county, identified by the
    county where the work was performed;
        (6) to the extent available, demographic data of the
    freelance workers who have alleged violations of this Act;
    and
        (7) legislative recommendations as the Director deems
    appropriate, which may include consideration of whether
    certain occupations should be exempted from the scope of
    the definition of freelance worker.
 
    Section 50. Coordination. The Department is authorized to
coordinate efforts under this Act with other agencies and
combine complaints under this Act with claims under other
Acts.
 
    Section 55. Rulemaking. The Director, or the Director's
authorized representatives, shall administer the provisions of
this Act. In order to accomplish the objectives of this Act and
to carry out the duties prescribed by this Act, the Director,
or the Director's authorized representative, may adopt rules
necessary to administer and enforce the provisions of this
Act.
 
    Section 99. Effective date. This Act takes effect July 1,
2024.