Last month, Illinois entered the historical record books by becoming the first state to enact legislation that compels companies using independent contractors to provide contracts with strictly prescribed terms. Particularly pertinently, this law states that these freelance contractors are to be paid all their fees within a set number of days. According to an insightful report by Locke Lord LLP, this legislation should be seen in the wider context of similar laws recently passed by several cities, including New York City, Los Angeles, and Minneapolis.
Each of these laws features unique differences regarding their coverage and obligations imposed on businesses. That being said, a key commonality exists: the cutting-edge move to provide greater protection for independent contractors. These recent legal developments may lead to consquential changes in corporate and legal practices concerning independent contract work and employer relationships.
To avoid penalties, companies are encouraged to carefully examine these new laws and accordingly adjust their business practices. Should a company fail to comply, there could be serious repercussions, potentially resulting in hefty damages. Lawyers, legal advisors, and corporate strategists in entities of all sizes should be alert to these changes and are urged to familiarize themselves with the specific requirements enacted by their state or city.
At the end of the day, these legal developments add to a continuously evolving landscape of labor law in the United States. Legal professionals working with corporations must keep pace with these changes to ensure they provide sound, up-to-date legal advice. This Illinois law, and the ones enacted by the aforementioned cities, will undoubtedly invite more debates in this area and create a precedent for subsequent jurisdictions to follow.