Session of 2023
HOUSE BILL No. 2399
By Committee on Commerce, Labor and Economic Development
2-10
AN ACT concerning labor and employment; providing protections for
freelance workers including payment within 30 days unless otherwise
contractually specified; requiring written contracts; forbidding clients
from demanding reductions in compensation for timely payment;
prohibiting retaliation against freelance workers who seek payment;
authorizing the secretary of labor to investigate alleged violations and
the attorney general to enforce orders against violators and setting forth
penalties for such violations; providing for a private cause of action by
freelance workers or by nonprofit organizations on behalf of such
workers; establishing an assistance program for freelance workers to be
administered by the secretary of labor.
Be it enacted by the Legislature of the State of Kansas:
Section 1. Sections 1 through 12, and amendments thereto, shall be
known and may be cited as the freelance isn't free act.
Sec. 2. For purposes of sections 1 through 12, and amendments
thereto:
(a) "Act" means the freelance isn't free act.
(b) "Freelance worker" means any natural person or any organization
composed of not more than one natural person, whether or not
incorporated or employing a trade name, that is hired or retained as an
independent contractor by a hiring party to provide services in exchange
for compensation. "Freelance worker" does not include:
(1) Any person who, pursuant to the contract at issue, is a sales
representative;
(2) any person engaged in the practice of law pursuant to the contract
at issue and who is a member in good standing of the bar of the highest
court of any state, possession, territory, commonwealth or the District of
Columbia and who is not under any order of any court suspending,
enjoining, restraining, disbarring or otherwise restricting such person in
the practice of law; and
(3) any person who is a licensed medical professional.
(c) "Hiring party" means any person who retains a freelance worker
to provide any service. "Hiring party" shall not include:
(1) The United States government;
(2) the state of Kansas, including any office, department, agency,
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authority or other body of the state and including the legislative and the
judicial branches;
(3) a city, including any office, department, agency or other body of a
city;
(4) a county, municipality or township or any other local
governmental entity; or
(5) any foreign government.
(d) "Sales representative" means a person that solicits orders in
Kansas and is an independent contractor, but does not include a person that
places orders for the person's own account for resale.
(e) "Secretary" means the secretary of labor or the secretary's
designee.
Sec. 3. (a) Whenever a hiring party retains the services of a freelance
worker and the contract between them has a value of $500 or more, either
by itself or when aggregated with all contracts for services between the
same hiring party and freelance worker during the immediately preceding
120 days, the contract shall be reduced to writing. Each party to the written
contract shall retain a copy thereof.
(b) The written contract shall include, at a minimum, the following
information:
(1) The name and mailing address of both the hiring party and the
freelance worker;
(2) an itemization of all services to be provided by the freelance
worker, the value of the services to be provided pursuant to the contract
and the rate and method of compensation; and
(3) the date on which the hiring party shall pay the contracted
compensation or the mechanism by which such date will be determined.
(c) The secretary may require additional terms to ensure that the
freelance worker and the hiring party understand their obligations under
the contract pursuant to rules and regulations adopted by the secretary as
provided by section 12, and amendments thereto.
Sec. 4. (a) Except as otherwise provided by law, the contracted
compensation shall be paid to the freelance worker either:
(1) On or before the date such compensation is due under the terms of
the contract; or
(2) if the contract does not specify when the hiring party must pay the
contracted compensation or the mechanism by which such date will be
determined, not later than 30 days after the completion of the freelance
worker's services under the contract.
(b) After a freelance worker has commenced performance of the
services under the contract, the hiring party shall not require as a condition
of timely payment that the freelance worker accept less compensation than
the amount of the contracted compensation.
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Sec. 5. No hiring party shall threaten, intimidate, discipline, harass,
deny a work opportunity to or discriminate against a freelance worker or
take any other action that penalizes a freelance worker for, or is reasonably
likely to deter a freelancer worker from, exercising or attempting to
exercise any right guaranteed under this act or from obtaining future work
opportunity because the freelance worker has done so.
Sec. 6. (a) A freelance worker who is aggrieved by a violation of this
act may file a complaint with the secretary within two years after the acts
alleged to have violated this chapter occurred. The secretary shall
prescribe the form of the complaint, which shall include, at a minimum:
(1) The name and mailing address of the freelance worker and of the
hiring party alleged to have violated this act;
(2) a statement detailing the terms of the freelance contract, including
a copy of such contract if available;
(3) the freelance worker's occupation;
(4) a statement detailing the alleged violations of this act; and
(5) a signed affirmation that all facts alleged in the complaint are true.
(b) At the time the secretary receives a complaint alleging a violation
of this act, the secretary shall refer the freelance worker to the freelance
worker assistance program established in section 10, and amendments
thereto.
(c) (1) The secretary shall not have jurisdiction over a complaint if:
(A) Either party to the contract has initiated a civil action in a court of
competent jurisdiction alleging a violation of this act or a breach of
contract arising out of the contract that is the subject of the complaint filed
under subsection (a), unless such civil action has been dismissed without
prejudice to future claims; or
(B) either party to the contract has filed a claim or complaint before
any administrative agency under any local, state or federal law alleging a
breach of contract that is the subject of the complaint filed under
subsection (a), unless the administrative claim or complaint has been
withdrawn or dismissed without prejudice to future claims.
(2) Where the secretary lacks jurisdiction over a complaint, the
secretary shall notify the following, in writing, within 10 days of
discovering the lack of jurisdiction:
(A) The freelance worker; and
(B) the hiring party, if the secretary discovered the lack of jurisdiction
after sending a notice to the hiring party pursuant to subsection (d).
(d) Within 20 days of receiving a complaint alleging a violation of
this act, the secretary shall send the hiring party named in the complaint a
written notice of complaint. Such notice shall inform the hiring party that a
complaint has been filed alleging violations of this act, detail the remedies
available to a freelance worker for violations of this act by a hiring party
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and include a copy of the complaint and notice that failure to respond to
the complaint creates a rebuttable presumption in any civil action
commenced pursuant to this act that the hiring party committed the
violations alleged in the complaint. The secretary shall send such notice by
certified mail and shall bear the cost of sending such notice.
(e) (1) Within 20 days of receiving the notice of complaint, the hiring
party identified in the complaint shall send the secretary one of the
following:
(A) A written statement that the freelance worker has been paid in full
and proof of such payment; or
(B) a written statement that the freelance worker has not been paid in
full and the reasons for the failure to provide such payment.
(2) Within 20 days of receiving the written response, the secretary
shall send the freelance worker a copy of:
(A) The response;
(B) any enclosures submitted to the secretary with the response;
(C) materials informing the freelance worker that such freelance
worker may bring an action in a court of competent jurisdiction or proceed
with the complaint through the department of labor and the relevant
procedures and deadlines;
(D) any other information about the status of the complaint; and
(E) information about the freelance worker assistance program
established in section 10, and amendments thereto.
(3) If the secretary receives no response to the notice of complaint
from the hiring party within the time provided by paragraph (1), the
secretary shall mail a notice of non-response to both the freelance worker
and the hiring party by regular mail and include with such notice proof that
the secretary previously mailed the notice of complaint to the hiring party
by certified mail. Upon completing an investigation of the complaint based
on the facts available to the secretary, the secretary shall provide the
results of the investigation pursuant to section 7, and amendments thereto,
to the attorney general and close the case.
(f) The failure of the hiring party to respond to the complaint shall
create a rebuttable presumption in any civil action commenced pursuant to
this act that the hiring party committed the violations alleged in the
complaint.
Sec. 7. (a) The secretary shall promptly commence an investigation of
each complaint filed pursuant to section 6, and amendments thereto, if the
secretary has jurisdiction as provided by section 6, and amendments
thereto. The secretary shall complete such investigation and, except when
a case is closed due to a lack of response from the hiring party as provided
by section 6, and amendments thereto, shall issue a final order within 60
calendar days after the filing of the complaint. If the case has been closed
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due to a lack of response from the hiring party, the secretary shall report to
the attorney general the results of its investigation and shall advise the
freelance worker that the freelance worker may either pursue an action as
provided by section 8, and amendments thereto, or may request the
attorney general to pursue the action as provided by subsection (d)(2).
(b) Upon completing the investigation, the secretary shall issue an
order containing findings and conclusions as to whether the hiring party
violated this act and provide such order to the freelance worker and the
hiring party. Such order is a final order for purposes of judicial review and
shall state the right of the freelance worker or the hiring party to appeal as
provided in the Kansas judicial review act.
(c) If the secretary issues a final order finding that a hiring party
violated this act, the secretary shall provide such order to the freelance
worker, the hiring party and the attorney general.
(d) (1) Upon receipt of an order from the secretary of labor pursuant
to subsection (c), the attorney general shall file an action in an appropriate
district court to enforce the order and recover damages on behalf of the
freelance worker. If the attorney general prevails, damages shall be
awarded by the court as provided by section 8, and amendments thereto. If
the hiring party is found to have engaged in a pattern or practice of
violations of this act in such action, civil penalties shall also be imposed
by the court as provided by section 9, and amendments thereto. If the
attorney general prevails, the attorney general shall be awarded reasonable
costs and expenses.
(2) Upon request of the freelance worker and receipt of the report of
the investigation by the secretary, the attorney general may pursue an
action as otherwise provided by this act against a hiring party that did not
respond to the complaint to recover damages on behalf of the freelance
worker. Such action shall be in lieu of a civil action by the freelance
worker or an organization on behalf of the freelance worker as provided by
section 8, and amendments thereto. If the attorney general prevails, the
attorney general shall be awarded reasonable costs and expenses.
(3) Damages assessed and collected by the attorney general under this
subsection shall be remitted to the freelance worker. Penalties based on a
finding that the hiring party engaged in a pattern or practice of violations
of this act as provided by section 9, and amendments thereto, shall be
remitted to the state treasurer in accordance with the provisions of K.S.A.
75-4215, and amendments thereto. Upon receipt of each such remittance,
the state treasurer shall deposit the entire amount in the state treasury to
the credit of the state general fund.
(4) The attorney general shall not file a civil action against a hiring
party if the secretary's investigation shows that the hiring party only
violated section 3 or section 4, and amendments thereto, and that the hiring
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party has paid the freelance worker in full for all services rendered. The
provisions of this paragraph shall not prohibit any action by the attorney
general under section 9, and amendments thereto.
Sec. 8. (a) (1) A freelance worker alleging a violation of this act may
bring an action in any court of competent jurisdiction for damages.
(2) A nonprofit organization may bring an action in any court of
competent jurisdiction for damages on behalf of a freelance worker if a
request is made in writing by the freelance worker, the nonprofit
organization provides such service free of charge to the freelance worker
and any award of damages is paid in full to the freelance worker. If the
organization prevails, the organization shall be awarded reasonable
attorney's fees, costs and expenses.
(b) Notwithstanding any other limitations contained in article 5 of
chapter 60 of the Kansas Statutes Annotated, and amendments thereto:
(1) Any action alleging a violation of section 3, and amendments
thereto, shall be brought within two years after the acts alleged to have
violated this act occurred;
(2) any action alleging a violation of section 4, and amendments
thereto, shall be brought within five years after the acts alleged to have
violated this act occurred; and
(3) any action alleging a violation of section 5, and amendments
thereto, shall be brought within six years after the acts alleged to have
violated this act occurred.
(c) Within 10 days after having commenced a civil action pursuant to
subsection (a), a plaintiff shall serve a copy of the complaint upon the
secretary and the attorney general. Failure to serve such complaint shall
not adversely affect any plaintiff's cause of action.
(d) A plaintiff who solely alleges a violation of section 3, and
amendments thereto, shall bear the burden of proof to establish that such
plaintiff requested a written contract before the contracted work began.
(e) (1) A plaintiff who prevails on a claim alleging a violation of this
act shall be awarded damages as described in this subsection and an award
of reasonable attorney fees and costs.
(2) (A) A plaintiff who prevails on a claim alleging a violation of
section 3, and amendments thereto, shall be awarded damages of $250.
(B) A plaintiff who prevails on a claim alleging a violation of section
3, and amendments thereto, and on one or more claims under other
provisions of this act shall be awarded damages equal to the value of the
underlying contract or $500, whichever is greater, for the violation of
section 3, and amendments thereto, in addition to the remedies specified in
this act for the other violations.
(3) In addition to any other damages awarded pursuant to this act, a
plaintiff who prevails on a claim alleging a violation of section 4, and
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amendments thereto, shall be entitled to an award for double damages,
injunctive relief and other such remedies as may be appropriate.
(4) In addition to any other damages awarded pursuant to this act, a
plaintiff who prevails on a claim alleging a violation of section 5, and
amendments thereto, shall be entitled to damages equal to $2,000 or the
value of the underlying contract, whichever is greater, for each violation
arising under such section.
(f) An action brought under this section by a freelance worker shall
not prevent an action based on the same facts brought by the attorney
general pursuant to section 9, and amendments thereto.
Sec. 9. (a) (1) When the attorney general determines that reasonable
cause exists to believe that a hiring party has engaged in a pattern or
practice of violations of this act, the attorney general may commence a
civil action on behalf of the state in a court of competent jurisdiction. Such
determination may be made by the attorney general independently, based
on any investigation made by the secretary as provided by section 7, and
amendments thereto, or based upon facts made known by any civil action
or actions brought pursuant to section 8, and amendments thereto.
(2) An action by the attorney general pursuant to paragraph (1) shall
be commenced by filing a complaint setting forth facts relating to such
pattern or practice and requesting relief, which may include injunctive
relief, civil penalties and any other appropriate relief.
(3) Nothing in this section prohibits:
(A) A person alleging a violation of this act from filing a civil action
pursuant to section 8, and amendments thereto, based on the same facts as
a civil action commenced by the attorney general pursuant to this section;
and
(B) the secretary from sending a notice of complaint pursuant to
section 6, and amendments thereto, unless otherwise barred from doing so.
(b) In any civil action commenced by the attorney general pursuant to
subsection (a), the trier of fact may impose a civil penalty of not more than
$25,000 upon a finding that a hiring party has engaged in a pattern or
practice of violations of this act. If the attorney general prevails, the court
shall award reasonable costs and expenses of the action and any
investigation to the attorney general.
(c) All civil penalties assessed and collected under this subsection
shall be remitted to the state treasurer in accordance with the provisions of
K.S.A. 75-4215, and amendments thereto. Upon receipt of each such
remittance, the state treasurer shall deposit the entire amount in the state
treasury to the credit of the state general fund.
(d) Notwithstanding any other limitations contained in article 5 of
chapter 60 of the Kansas Statutes Annotated, and amendments thereto, any
action by the attorney general alleging a violation of this section shall be
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brought within six years after the acts alleged to have violated this act
occurred.
Sec. 10. (a) The secretary shall establish a freelance worker assistance
program that provides information and assistance, as set forth in
subsection (c), relating to the provisions of this act. Such program shall
include assistance by a natural person by phone and email and shall
include online information.
(b) The secretary shall make available model contracts on the website
of the department of labor for use by the general public at no cost. Such
model contracts shall be made available in English and Spanish and may
be made available in any other language as determined by the secretary.
(c) The freelance worker assistance program shall provide the
following:
(1) General court information and information about procedures
under this act;
(2) information about available templates and relevant court forms;
(3) general information about classifying persons as employees or
independent contractors;
(4) information about obtaining translation and interpretation services
and other courtroom services;
(5) a list of organizations that may be used for the identification of
attorneys;
(6) information about the roles of the secretary and the attorney
general in enforcing the provisions of this act;
(7) information about the legal options, remedies available and filing
deadlines for freelance workers who may have suffered a violation of this
act; and
(8) other information, as determined by the secretary, related to the
submission of a complaint by a freelance worker or the commencement of
a civil action pursuant to this act by a freelance worker.
(d) The freelance worker assistance program shall include outreach
and education to the public on the provisions of this act.
(e) The freelance worker assistance program shall not provide legal
advice.
Sec. 11. (a) Except as otherwise provided by law, any provision of a
contract purporting to waive rights under this act is void as against public
policy.
(b) The provisions of this act supplement, and do not diminish or
replace, any other basis of liability or requirement established by state or
federal law or common law.
(c) Failure to comply with the provisions of this act does not render
any contract between a hiring party and a freelance worker void or
voidable or otherwise impair any obligation, claim or right related to such
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contract or constitute a defense to any action or proceeding to enforce, or
for breach of, such contract.
(d) No provision of this act shall be construed as providing a
determination about the legal classification of any individual as an
employee or independent contractor.
(e) Personal jurisdiction over the parties, including any nonresident,
in any civil action brought under this act shall be in any district court in
this state having jurisdiction over:
(1) The freelance worker's place of business or residence;
(2) the hiring party's place of business or residence;
(3) the location where the contract was offered or accepted; or
(4) the location or principal location where the services by the
freelance worker were performed.
Sec. 12. The secretary of labor and the attorney general may adopt
such rules and regulations as necessary to implement the provisions of this
act.
Sec. 13. This act shall take effect and be in force from and after its
publication in the statute book.
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