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Illinois Freelance Worker Protection Act Takes Effect Soon

Illinois’ Freelance Worker Protection Act (FWPA) takes effect on July 1, 2024. FWPA significantly impacts how employers engage with freelance workers, also known as independent contractors, within the state by requiring written contracts, mandating when payment for services will be required, and establishing recordkeeping requirements.  

Employers hiring freelancers (excluding individuals performing construction services) for services valued at $500 or more within a 120-day period must comply with the Act’s requirements, including:  

  • Written Contracts. FWPA mandates written contracts for all covered freelance engagements. These contracts must include (at a minimum) both parties’ names and mailing addresses, the value of all products and services to be provided by the freelancer, payment terms (rate and method), the date that the contracting entity must pay the freelancer, and the date the freelancer must submit a list of products or services rendered to the contracting entity.  

    Contracting entities must provide a copy of the written contract, either physically or electronically, to the freelance worker. 

    The Illinois Department of Labor (IDOL) will provide model contracts on its website for use by the general public at no cost. The model contracts will be made available in English and the eight (8) languages most commonly spoken by limited English proficient individuals in the State. However, the time at which these will be made available is currently unclear. 

  • Payment for Services. Payment must be made to freelancers on or before the date due as per the contract, which will be no later than 30 days after the product or services are provided. 

  • Recordkeeping Requirements. Employers must maintain records related to freelance engagements for at least two (2) years.  

Next Steps  

While the Act takes effect in July, contracts entered before that date are not directly affected. However, it is recommended to review existing practices and consider bringing them into compliance with FWPA to avoid future issues including:  

  • Ensuring that workers are properly classified as either employees or independent contractors under federal and/or state laws.  
  • Developing standardized contracts for freelance engagements or reviewing and updating contract templates, ensuring they meet all FWPA requirements.  
  • Implementing consistent and timely payment processes to comply with the Act’s pay frequency mandates.  
  • Consulting an employment attorney to ensure compliance with FWPA and navigate any potential challenges.  

HR Works will continue to monitor this topic and share updates as they become available. 

HR Works, headquartered in Upstate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States for over thirty years. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.