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Understanding SB 988

California’s Freelance Worker Protection Act (SB 988) takes effect on January 1, 2025, marking a significant step in protecting independent contractors and freelance workers. This legislation mandates written contracts for freelance work exceeding $250 and introduces enforceable payment terms to ensure timely compensation.

Key Changes

  1. Mandatory Written Contracts: Employers must provide written agreements for services exceeding $250, detailing payment terms, service scope, and deadlines.
  2. Timely Payment Requirement: Payment must be issued within 30 days of project completion unless otherwise specified.
  3. Penalties for Non-Compliance: Employers who fail to adhere to the law face late fees, potential legal action, and liability for damages.

HR Best Practice Recommendations

  1. Audit Independent Contractor Classifications: Ensure freelancers are properly classified to avoid penalties and legal risks.
  2. Update Contract Templates: Incorporate SB 988-compliant terms into existing freelance contracts.
  3. Educate Teams: Train HR and management teams on the new requirements to maintain seamless operations.
  4. Implement Payment Tracking Systems: Streamline invoicing and payment workflows to ensure compliance with deadlines.

Legislative Alterations

SB 988 continues California’s commitment to labor protection, complementing earlier laws like AB 5, which clarified employee versus independent contractor classifications. By requiring written agreements and timely payments, the legislation further distinguishes freelance workers while safeguarding their rights.

Closing Remarks

SB 988 represents both an opportunity and a challenge for employers. While it strengthens freelance worker protections, it also increases compliance responsibilities. Businesses that take proactive steps now to align with these requirements will not only avoid penalties but also build stronger relationships with their freelance talent.

Ensure Compliance Today!

Navigating SB 988 doesn’t have to be complicated. Let Employer's Guardian help your business update policies, contracts, and payment processes. Contact us now to stay ahead of the curve.