103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2041

 

Introduced 2/9/2023, by Sen. Cristina H. Pacione-Zayas

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Freelance Worker Protection Act. Provides that freelance workers must be compensated by hiring parties for their services in a timely manner. Provides that whenever a hiring party retains the services of a freelance worker, the contract between the hiring party and the freelance worker shall be reduced to writing and signed by both parties. Provides that no hiring party shall threaten, intimidate, discipline, harass, deny a work opportunity to, or discriminate against a freelance worker, 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 under the Act. Contains provisions concerning enforcement; civil enforcement; public policy and intent; public awareness; reports; coordination; and rulemaking by the Department of Labor. Effective July 1, 2024.


LRB103 30684 SPS 57150 b

 

 

A BILL FOR

 

SB2041LRB103 30684 SPS 57150 b

1    AN ACT concerning employment.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Freelance Worker Protection Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Department" means the Department of Labor.
8    "Director" means the Director of Labor, or his or her
9designee.
10    "Freelance worker" means a natural person who is hired or
11retained as an independent contractor by a hiring party to
12provide products or services in Illinois or for a hiring party
13located in Illinois in exchange for an amount equal to or
14greater than $500, either by itself or when aggregated with
15all contracts for products or services between the same hiring
16party and the freelance worker during the immediately
17preceding 120 days. "Freelance worker" does not include an
18individual performing services as an employee under Section 10
19of the Employee Classification Act or an employee as defined
20in Section 2 of the Wage Payment and Collection Act.
21    "Hiring party" means any person who retains a freelance
22worker to provide any service, other than:
23        (1) the United States government;

 

 

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1        (2) the State of Illinois;
2        (3) a unit of local government; or
3        (4) any foreign government.
4    "Natural person" means an individual human being.
5    "Person" means any natural person, individual,
6corporation, business enterprise or other legal entity, either
7public or private, and any legal successor, representative,
8agent or agency of that individual, corporation, business
9enterprise, or legal entity.
 
10    Section 10. Payment of compensation for freelance workers.
11    (a) Except as otherwise provided by law, a freelance
12worker shall be paid the contracted compensation amount no
13later than 30 days after the freelance worker provides the
14product or completes the services under the contract.
15    (b) Once a freelance worker has commenced preparation of
16the product or performance of the services under the contract,
17the hiring party shall not require as a condition of timely
18payment that the freelance worker accept less compensation
19than the amount of the contracted compensation.
 
20    Section 15. Contract for products and services of
21freelance workers.
22    (a) Whenever a hiring party retains a freelance worker,
23the contract for such products or services shall be reduced to
24writing and signed by the freelance worker and the hiring

 

 

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1party. The hiring party shall furnish a copy of the written
2contract, either physically or electronically, to the
3freelance worker and each party to the written contract shall
4retain a copy thereof.
5    (b) The written contract for the product and service of a
6freelance worker shall include, at a minimum, the following
7information:
8        (1) the name and mailing address of both the hiring
9    party and the freelance worker;
10        (2) an itemization of all products and services to be
11    provided by the freelance worker, the value of the
12    products and services to be provided under the terms of
13    the contract, and the rate and method of compensation;
14        (3) the date on which the hiring party must pay the
15    contracted compensation or the mechanism by which such
16    date will be determined; and
17        (4) the date by which a freelance worker must submit a
18    list of products or services rendered under such contract
19    to the hiring party in order to meet any internal
20    processing deadlines of the hiring party for the purposes
21    of compensation being timely render by the agreed-upon
22    date as stipulated in paragraph (3).
23    (c) The Department may adopt rules as necessary to enforce
24this Act, including, but not limited to, requiring additional
25terms to ensure that the freelance worker and the hiring party
26understand their obligations under the contract.

 

 

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1    (d) The hiring party shall retain the contract for the
2service of a freelance worker for no less than 6 years and
3shall make such contract available to the Department upon
4request. The failure of the hiring party to produce such
5contract within 5 business days upon the request of the
6Department shall give rise to a presumption that the terms the
7freelance worker has presented are the agreed upon terms.
8    (e) The Department shall make available model contracts on
9its website for use by the general public at no cost. Such
10model contracts shall be made available in English and in the 8
11languages most commonly spoken by limited English proficient
12individuals in the State.
 
13    Section 20. Nondiscrimination. No hiring party shall
14threaten, intimidate, discipline, harass, deny a freelance
15opportunity to, or take any other action that penalizes a
16freelance worker for, or is reasonably likely to deter a
17freelance worker from, exercising or attempting to exercise
18any right guaranteed by this Act, or from obtaining any future
19work opportunity because the freelance worker has done so.
 
20    Section 25. Enforcement.
21    (a) It shall be the duty of the Department to inquire
22diligently for any violations of this Act, and to institute
23the actions for penalties provided by this Act, and to enforce
24generally the provisions of this Act.

 

 

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1    (b) A freelance worker may file a complaint with the
2Department alleging violations of the Act by submitting a
3signed, completed compensation claim application on the form
4provided by the Department and by submitting copies of all
5supporting documentation. The form provided by the Department
6shall include requests for information to facilitate its
7report making requirements under Section 50, including, (1)
8the general sector or occupation of the freelance worker
9submitting a claim under this Act, (2) the county where the
10work by the freelance worker was performed, and (3) the
11demographic data of the freelance worker submitting a claim
12under this Act, to be provided by the freelance worker on a
13voluntary basis. Complaints alleging violation of Section 15
14shall be filed within 2 years after the date the final
15compensation was due. Complaints alleging violation of Section
1610 shall be filed within 3 years after the date the final
17compensation was due. Applications shall be reviewed by the
18Department to determine whether there is cause for
19investigation. Failure of a hiring party to keep adequate
20records or provide written contract as required by this Act
21shall not operate as a bar to a freelance worker filing a
22complaint. The Department shall keep the names of freelance
23workers who are the subject of an investigation confidential
24until such time that disclosure is necessary for resolution of
25an investigation or complaint.
26    (c) Each freelance worker who files a completed

 

 

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1compensation claim application alleging a violation of this
2Act or a rule adopted thereunder shall be provided with a
3written description of the anticipated processing of the
4complaint, including investigation, case conference, potential
5civil and criminal penalties, and collection procedures. Each
6freelance worker and his or her authorized representative
7shall be notified in writing of any case conference before it
8is held and given the opportunity to attend. Each freelance
9worker and his or her authorized representative shall be
10notified in writing of any award and collection of civil
11penalties.
12    (d) The Department shall have the power to investigate and
13attempt equitably to adjust controversies between freelance
14workers and hiring entities in respect of compensation claims
15arising under this Act and to that end the Department through
16the Director or any other person in the Department designated
17by him or her, shall have the power to administer oaths,
18subpoena and examine witnesses, to issue subpoenas duces tecum
19requiring the production of such books, papers, records and
20documents as may be evidence of any matter under inquiry and to
21examine and inspect the same as may relate to the question in
22dispute. Service of such subpoenas shall be made by any
23sheriff or any person. Any court in this State, upon the
24application of the Department may compel attendance of
25witnesses, the production of books and papers, and the giving
26of testimony before the Department by attachment for contempt

 

 

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1or in any other way as the production of evidence may be
2compelled before such court. The Department may initiate a
3mediation conference.
4    (e) Where reasonable cause exists to believe that a hiring
5party is engaged in a pattern or practice of violations of this
6Act, the Attorney General may commence a civil action on
7behalf of the State in a court of competent jurisdiction. The
8Attorney General may receive injunctive relief, civil
9penalties, and any other relief deemed appropriate by the
10court.
11    (f) Nothing in this Act shall be construed to prevent any
12freelance worker from making complaint or prosecuting his or
13her own claim for compensation. Any freelance worker aggrieved
14by a violation of this Act or any rule adopted under this Act
15may file suit in circuit court of Illinois, in the county where
16the alleged violation occurred or where any freelance worker
17who is party to the action resides, without regard to
18exhaustion of any alternative administrative remedies provided
19in this Act. Actions may be brought by one or more freelance
20workers for and on behalf of themselves and other freelance
21workers similarly situated.
22    (g) Nothing in this Act shall be construed to limit the
23authority of the State's attorney of any county to prosecute
24actions for violation of this Act or to enforce the provisions
25thereof independently and without specific direction of the
26Department.
 

 

 

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1    Section 30. Civil enforcement.
2    (a) Any freelance worker not timely paid final
3compensation by a hiring party as required by Section 10 shall
4be entitled to recover through a claim filed with the
5Department or in a civil action, but not both, double the
6amount of any such underpayments, injunctive relief, and other
7such remedies as may be appropriate. In a civil action for
8violation of Section 10, such freelance worker shall also
9recover costs and all reasonable attorney's fees. Civil
10complaints alleging violation of Section 10 shall be filed
11within 3 years after the date the final compensation was due.
12    (b) Any freelance worker who was retained in violation of
13Section 15 despite the freelance worker's request for a
14written contract prior to commencing the contracted work as
15required by Section 15 shall be entitled to recover through a
16claim filed with the Department or in a civil action, but not
17both, statutory damages of $500. However, a freelance worker
18who prevails on a claim alleging violation of Section 15 and on
19one or more claims under other Sections shall be awarded
20statutory damages equal to the value of the underlying
21contract or $500, whichever is greater, in addition to the
22other remedies provided. Civil complaints alleging violation
23of Section 15 shall be filed within 2 year after the date the
24final compensation was due.
25    (c) Any freelance worker who is threatened, intimidated,

 

 

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1disciplined, harassed, denied a freelance opportunity, or
2penalized by a hiring party in violation of Section 20 of this
3Act shall be entitled to recover through a claim filed with the
4Department or in a civil action, but not both, statutory
5damages equal to the value of the underlying contract for each
6violation of Section 20. In a civil action for violation of
7Section 20, such freelance worker shall also recover costs and
8all reasonable attorney's fees.
 
9    Section 35. Criminal penalties. In addition to the other
10remedies provided in this Act, any hiring party or any agent of
11a hiring party, who, being able to pay final compensation and
12being under a duty to pay, wilfully refuses to pay as provided
13in this Act, or falsely denies the amount or validity thereof
14or that the same is due, with intent to secure for the hiring
15party or other person any underpayment of such indebtedness or
16with intent to annoy, harass, oppress, hinder, delay, or
17defraud the freelance worker to whom such indebtedness is due,
18upon conviction, is guilty of:
19        (1) for unpaid final compensation in the amount of
20    $5,000 or less, a Class B misdemeanor; or
21        (2) for unpaid final compensation in the amount of
22    more than $5,000, a Class A misdemeanor.
23    Each day during which any violation of this Act continues
24shall constitute a separate and distinct offense.
25    Any hiring party or any agent of a hiring party who

 

 

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1violates this Act a subsequent time within 2 years of a prior
2criminal conviction under this Section is guilty, upon
3conviction, of a Class 4 felony.
 
4    Section 40. Public policy and intent.
5    (a) Except as otherwise provided by law, any provision of
6a contract purporting to waive rights under this Act is void as
7against public policy.
8    (b) The provisions of this Act are intended to supplement,
9and do not diminish or replace, any other basis of liability,
10remedy, or requirement established by statute or common law.
11    (c) Failure to comply with this Section does not render
12any contract between a hiring party and a freelance worker
13void in total, voidable, or otherwise impair any obligation,
14claim, or right related to the contract, nor does it
15constitute a defense to any action or proceeding to enforce,
16or for breach of, such contract.
17    (d) No provision of this Act relating to freelance workers
18shall be construed as providing a determination about the
19legal classification of any such worker as an employee or
20independent contractor.
 
21    Section 45. Public awareness. Subject to appropriation,
22the Department may conduct a public awareness campaign, that
23shall include making information available on its website,
24otherwise informing hiring parties of the provisions of this

 

 

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1Act, and establishing a means for assistance by a natural
2person through phone or email.
 
3    Section 50. Reports. One year after the effective date of
4this Act, and by November 1 every 5 years thereafter, the
5Department shall submit to the General Assembly and publish on
6its website a report regarding the effectiveness of this Act
7at improving freelance contracting and payment practices. The
8report shall include, but is not limited to:
9        (1) the number of complaints received;
10        (2) the value of the contracts disaggregated into
11    ranges of $500 and by the Section of this Act the
12    associated hiring party is alleged to have violated;
13        (3) the numbers of responses and non-responses
14    received by the Department disaggregated by contract value
15    into ranges of $500 and by the Section of this Act the
16    associated hiring party is alleged to have violated;
17        (d) the number of freelance workers that pursue their
18    claims of violation of this Act through civil action or an
19    alternative dispute resolution process, and a summary of
20    the outcomes, if known;
21        (4) the general sector or occupation of the freelance
22    workers submitting claims pursuant to this Act;
23        (5) the counties where violations of this Act are
24    alleged to have occurred, including the number of
25    violations from each county;

 

 

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1        (6) to the extent available, demographic data of the
2    freelance workers who allege violations of this Act; and
3        (7) legislative recommendations, including
4    consideration of whether certain occupations should be
5    exempted from the scope of the definition of freelance
6    worker.
 
7    Section 55. Coordination.
8    (a) The Department is authorized to coordinate enforcement
9efforts with other agencies and combine claims under this Act
10with claims under other Acts.
11    (b) The Department is authorized to enter into agreements
12with other states to collect unpaid compensation from
13out-of-state hiring entities and to perform reciprocal
14services for such states in the State of Illinois.
 
15    Section 60. Rulemaking. The Director, or his authorized
16representatives, shall administer and enforce the provisions
17of this Act. In order to accomplish the objectives of this Act
18and to carry out the duties prescribed by this Act, the
19Director, or his authorized representative, shall adopt rules
20necessary to administer and enforce the provisions of this
21Act, including the procedures that shall be followed for
22hearings under Section 25. The adoption, amendment, or
23rescission of rules shall be in conformity with the
24requirements of the Illinois Administrative Procedure Act.
 

 

 

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1    Section 99. Effective date. This Act takes effect July 1,
22024.