Illinois has passed a new law that is going to impact independent contractors in 2024. It basically requires written contracts for any independent contractor and it requires that they be reported on your new hire reporting just like new employees would be.
Illinois recently enacted broad protections for freelance workers. The Freelance Worker Protection Act (FWPA) requires entities contracting with freelance workers to provide written contracts and timely compensation and authorizes administrative and civil actions for violations. It will take effect on July 1, 2024.
The FWPA defines "freelance worker" as "a natural person" who is hired or retained as an independent contractor by any nongovernmental person or entity to provide products or services in Illinois, or for an entity located in Illinois, where the amount paid is at least $500 (in a single contract or in the aggregate of all contracts within a 120-day period).
The definition expressly excludes "employees," as defined by the Illinois Wage Payment and Collection Act, and individuals engaged by construction contractors or subcontractors, as defined by the Illinois Employee Classification Act.
Written Contracts
The FWPA requires the freelance worker and the contracting entity to enter into a written contract that includes, at a minimum, the following:
The hiring party must provide a copy of the written contract to the freelance worker and retain the contract for at least two years. It also must produce the contract to the IDOL upon request.
Illinois recently enacted broad protections for freelance workers. The Freelance Worker Protection Act (FWPA) requires entities contracting with freelance workers to provide written contracts and timely compensation and authorizes administrative and civil actions for violations. It will take effect on July 1, 2024.
The FWPA defines "freelance worker" as "a natural person" who is hired or retained as an independent contractor by any nongovernmental person or entity to provide products or services in Illinois, or for an entity located in Illinois, where the amount paid is at least $500 (in a single contract or in the aggregate of all contracts within a 120-day period).
The definition expressly excludes "employees," as defined by the Illinois Wage Payment and Collection Act, and individuals engaged by construction contractors or subcontractors, as defined by the Illinois Employee Classification Act.
Written Contracts
The FWPA requires the freelance worker and the contracting entity to enter into a written contract that includes, at a minimum, the following:
- The name and contact information of both parties, including the hiring party's mailing address.
- An itemized list of all products and services provided by the freelance worker, including the value of the products and services and the rate and method of compensation for such products and services.
- The date on which payment is due, which must be no later than 30 days after the products or services are provided.
- If the hiring party requires a list of products and services rendered to timely compensate the freelance worker, the date by which the freelance worker must submit the list.
The hiring party must provide a copy of the written contract to the freelance worker and retain the contract for at least two years. It also must produce the contract to the IDOL upon request.
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