California’s Freelance Worker Protection Act (FWPA) which went into effect January 1, 2025 established new requirements for freelance workers in California. This Act is found at California Business and Professions Code 18100 et seq. The FWPA may apply where the worker is properly classified as an independent contractor, but is an individual worker as opposed to part of a larger company. The FWPA does not apply to independent contractor agreements between two businesses each employing numerous employees. Rather, it applies to contracts for services of one person, either directly with that person or through an organization or entity they solely own or control. The statute applies to a freelance worker, not a business and not an employee and provides certain protections around payment.
The FWPA applies to hiring of freelance workers for contracts in excess of $250 during a 120 day period to provide any of the categories of services listed in California Labor Code 2778(b)(2). The applicable service types include marketing, human resource administration, several artistic trades, certain personal care trades, and other categories.
The FWPA provides such freelance workers with certain protections, including a few enjoyed by employees in California.
Written Contract Requirements
The FWPA requires that engagements with freelance workers include a written contract containing:
- The name and mailing address of both parties
- An itemized description of services to be performed
- The compensation to be paid and method of calculation
- The date by which payment will be made, or a method for determining that date
A business must retain copies of the contract for at least four years, along with any related communications or records showing the scope of work, invoices, and payment details.
Payment Timing and Delivery
If a payment date is not expressly stated in the contract, the FWPA requires that compensation be made no later than 30 days after the services are completed. The method of delivery—whether check, direct deposit, electronic transfer, or another mutually agreed-upon method—should be clearly documented. Requests for revised payment arrangements after the work is completed do not extend the statutory deadline.
Prohibited Conduct and Retaliation
Businesses are prohibited from conditioning timely payment on accepting reduced compensation, signing forfeiture waivers, or agreeing to revised terms not included in the original written agreement. The FWPA further prohibits retaliation against a freelance worker for exercising or attempting to exercise rights under the statute, including filing or threatening to file a complaint.
Enforcement, Documentation, and Damages Exposure
Freelance workers may file complaints with the Labor Commissioner, and the FWPA authorizes statutory damages, injunctive relief, and attorney’s fees in certain circumstances. If a business fails to provide a written contract upon request, or fails to retain proper documentation, it may be required to pay statutory damages of $1,000. Additional damages may be available when timely payment is not made, including the value of the underlying compensation, damages equal to the value of that compensation, and penalties for retaliation. These provisions make recordkeeping and contract consistency important risk-management considerations for businesses that regularly engage freelance workers.
Relevance for Business Owners During Growth, Restructuring, or Transition Events
FWPA compliance may also become relevant for business owners during periods of growth, restructuring, or buying or selling a business, particularly where freelance workers are used in place of employees or where contractor relationships exist across multiple business units. Business owners may wish to confirm that written contracts are in place, payment-timing records are retained, and no open claims or potential exposure related to the FWPA exist. Changes implemented following a merger, sale, or internal reorganization—such as outsourcing key roles or converting contractor functions to employee positions—may also affect future compliance obligations.
If you have questions about FWPA applicability or wish to better understand how it may relate to your business structure or a planned transition, contact our office at (714) 619-9360.