The answer is yes if you’re paying them $800 or more. New York’s Freelance Isn’t Free Act took effect on August 28, 2024, and it requires a written contract when hiring a freelancer for $800 or more in a single engagement or accumulated over 120 days.

The $800 threshold applies to individual freelancers working as sole proprietors or single-person businesses. If you hire the same person for multiple smaller jobs that add up to $800 within 120 days, you still need a written contract even if no single job reached that amount on its own.

Your contract must include three things. A description of the services to be performed, the rate of pay, and when payment is due. It doesn’t need to be a formal legal document with dense language. An email exchange covering these elements can satisfy the requirement, though a simple contract template is cleaner and easier to reference if questions come up later.

Creative services businesses and other companies that rely on subcontractors feel this most directly. If you’re running a marketing agency or consulting firm that regularly uses freelance talent, you probably cross the $800 threshold often. Building contract templates and payment tracking into your workflow now prevents problems later.

Payment timing is built into the law. If your contract doesn’t specify when you’ll pay, the default is within 30 days of the freelancer completing the work. This surprises many business owners who’ve treated “pay when you get around to it” as normal. Under this law, delayed payment without a specified due date exposes you to penalties.

You must retain contracts with freelancers for six years. This applies even after the work is finished and the relationship has ended. It’s longer than many small businesses keep routine paperwork, so setting up a dedicated folder or system for freelancer agreements makes sense.

Penalties for not complying can include double damages, attorneys’ fees, and other costs if a freelancer brings a claim. The law was designed to protect freelancers from late or missing payments, and the enforcement mechanisms have real consequences for businesses that ignore the requirements.

The practical path to compliance is simple. Create a one-page contract template with spaces for the freelancer’s name, project description, payment amount, and due date. Use it for any engagement over $800 or when you expect to hit that amount across multiple jobs. Save signed contracts in a consistent location. Track payments to repeat freelancers so you know when you’re approaching the threshold with someone you use regularly.

This ties into your year-end reporting too. Anyone you pay $600 or more needs a 1099-NEC. The contracts you’re now required to keep make that process cleaner because you already have documentation of what was agreed and paid. Long Island bookkeeping services can help you set up tracking systems that handle both the Freelance Isn’t Free requirements and 1099 preparation when tax season arrives.