In 2017, NYC enacted new laws to protect freelancers, namely the right to a clear contract in writing; the right to be paid on or before the invoice due date; and rights to sue their client in the case of non-compliance.
It echoes some of our laws in the UK around commercial debts (the Late Payment of Commercial Debts (Interest) Act 1998 is what we have to protect us against late payments, and allows us to surcharge and apply interest fees).
Some year on, a review went to show it had improved payment practices, and the stronger legal protections were welcomed - although enforcing the act, and awareness of the act by both freelancers and clients remains low, along with some retailation to freelancers acting upon their rights.
I’m interested in what learnings came from the NYC act, and what improvements we’d like to see in the UK to further support freelancers to acting upon late payments.
I see similar issues here around a low awareness of freelancers rights in terms of dealing with late payments, plus the emotional posture of many freelancers being almost apologetic in asking for the money which is owed of them.
Labour’s manifesto and new Business and Trade secretary Jonathan Reynolds have spoken to improving legislation around late payments, but despite legislation already in place, we still see around half of SME invoices being paid late.
The NYC act allows them to sue for twice the amount owed - do we need to look at more significant penalties in the UK? Do we need to have a channel to chase payments which are arbitrated away from the freelancer, so the non-paying business faces the wrath of an independent party, rather than an individual freelancer?
And what can we do to improve the visibility and understanding of the current laws, and support organisations like the Office of the Small Business Comissioner and the work which Liz Barclay and team are doing?