The “Gig Economy” in Los Angeles and Requirements for Hiring Independent Contractors

L.A.’s New Requirements for Companies That Hire Freelance or Contract Workers

With companies like Uber and Lyft leading the way, more and more businesses in the L.A. area are choosing to hire independent contractors over full-time, permanent employees, creating one of the largest “gig economies” in the country. Recently, California has made a concerted effort to limit the number of contract workers and protect workers’ rights by enacting an ordinance imposing new requirements for businesses that utilize freelance workers.

Are you a freelancer or independent contractor who is having an issue or dispute with an employer? Contact the Los Angeles employment law attorneys at Levin & Nalbandyan. With over three decades of experience, our team will protect your rights and resolve any issues affecting your employment. Call (213) 513-5614 today to arrange a free, no-obligation consultation.

The Gig Economy in Los Angeles

A “gig economy” is a labor market with a high prevalence of temporary and/or part-time positions that are filled by freelance and contract workers rather than full-time permanent employees. 

Los Angeles has the second largest “gig economy” in the country, behind only New York City. As of 2019, Los Angeles had over 1.1 million contract and freelance workers, with a surprising 32% of the workforce across the entire state of California working as independent contractors.

Who Is Considered an Independent Contractor?

An independent contractor is paid by a business but is not considered an “employee.” Instead, contract workers are self-employed, providing goods and services according to the terms of a negotiated contract between the individual and the hiring entity.

Often, workers are unsure whether they are considered an independent contractor or an employee. Answering “yes” to the following questions likely means you are an independent contractor.

  • Do you set your own work schedule?
  • Are you paid for each job rather than by the hour?
  • Are you working for multiple employers?
  • Do you supply your own supplies, equipment, and/or workspace?
  • Do you control how and what will be done to complete the job?

Los Angeles’ Freelance Worker Protections Ordinance

The Ordinance, which went into effect on July 1, 2023, imposes requirements on businesses within the City of Los Angeles that work with independent contractors. Failing to meet these requirements can result in monetary penalties and damages.

Under The Freelance Worker Protections Ordinance, a written contract must be created and include the following:

  • The name, address, and phone number of both the business and independent contractor
  • An itemized list of services that are to be provided by the freelancer, the value of those services, and the rate and method of compensation
  • The date when payment is due

The Ordinance also stipulates that payments must be made on or before the specified due date or, in some cases, within 30 days after the services are rendered. Parties are required to retain the contract, payment records, and any other records demonstrating compliance for a minimum of four years. The Ordinance also prohibits adverse actions or retaliation against a contract worker using and/or enforcing the Ordinance. 

Filing a Complaint 

An independent contractor can file a complaint with the Office of Wage Standards of the Bureau of Contract Administration within one year of an alleged violation. Once a complaint has been submitted, the Office will investigate the claim by contacting the business and obtaining documents and any other information related to the alleged violation. The business has 20 days to respond to the Office, and should they fail to do so, the claimant will obtain a rebuttable presumption that the Ordinance was violated.

Seeking Damages

An independent contractor can file a lawsuit against a business seeking damages. These damages include double damages for failing to pay in a timely manner and compensation for the freelancer’s attorney fees and costs.

Call Levin & Nalbandyan to Learn More

Contract work can be very appealing, offering freedom and flexibility. However, being an independent contractor does not come without risk. 
If you are an independent contractor and feel your employer is infringing on your rights, contact Levin & Nalbandyan. Our top employment law attorneys in Los Angeles have assisted clients across Southern California in a wide range of employment law matters. With our decades of experience and passion for helping workers in need, you can count on us to protect your rights and effectively resolve the matter at hand. Contact us online or call (213) 513-5614 to schedule your FREE consultation.




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