California Freelance Protection Act

Posted on September 2, 2025

A Comprehensive Guide for Employers

Hiring freelance talent has become essential for businesses seeking flexibility, specialized expertise, and innovation. However, in California, engaging independent contractors comes with specific legal obligations that employers must navigate carefully.

The California Freelance Protection Act, outlined in Business & Professions Code 18100 et seq., establishes critical rules for managing relationships between businesses and freelancers. Complying with this legislation ensures legal protection and fosters fair, professional partnerships that benefit both parties.

This guide breaks down everything employers need to know about the California Freelance Protection Act, from its core purpose to key provisions like mandatory written contracts, payment deadlines, and practical steps to maintain compliance while avoiding penalties.

What Is the California Freelance Protection Act?

The California Freelance Protection Act, effective for contracts entered into on or after January 1, 2025, is designed to provide freelancers with stronger protections. These include clear contractual terms and timely payment, addressing common issues such as late payments, non-payment, and disputes caused by vague agreements.

The law requires written contracts and enforces firm payment timelines, creating greater transparency and predictability for freelancers and the businesses that hire them. It underscores employers’ need to adopt structured processes for managing freelance relationships.

Key Provisions Employers Should Know

The Act’s compliance framework revolves around mandatory written contracts, timely payments, and anti-retaliation measures. Failing to meet these requirements can expose your business to legal and financial risks.

1. Mandatory Written Contracts

One of the most significant changes under the Act is the requirement for written contracts when freelance work meets or exceeds $600 in a calendar year, whether it’s for a single project or multiple smaller projects.

Each written agreement must include the following:

• Names and contact information for the hiring party and freelancer.
• A detailed list of services to be provided, with enough specificity to avoid ambiguity.
• Payment terms, including the rate, payment method, and total compensation.
• A payment deadline or a mechanism for determining it (e.g., “within 30 days of invoice receipt”).

This requirement helps both parties clarify expectations upfront, minimizing misunderstandings and disputes later. For employers, it offers an opportunity to formalize freelance engagement processes and set clear project parameters.

2. Timely Payments

The Act enforces strict payment deadlines. Employers must pay freelancers the agreed-upon amount on or before the date specified in the contract. If no payment date is outlined, payment must be made no later than 30 days after work completion.

Partial payments or delays are considered violations. To ensure compliance, it’s essential to establish reliable accounts payable processes for handling freelance invoices promptly. Meeting payment obligations not only protects you legally but also strengthens your reputation as a dependable client.

3. Anti-Retaliation Protections

The Act safeguards freelancers from retaliation. Employers cannot intimidate, harass, discipline, or deny work opportunities to freelancers who exercise their rights under the law.

For example, if a freelancer files a complaint about late payment, you cannot penalize them by refusing future work. This provision ensures freelancers can assert their rights without fear, reinforcing the Act’s practical enforceability.

Penalties for Non-Compliance

Failure to comply with the California Freelance Protection Act can result in serious consequences. Freelancers may file complaints with the California Labor Commissioner or pursue civil action in court.

Employers found in violation may face:

• Double the amount of unpaid compensation.
• Attorney’s fees and court costs.
• Civil penalties of up to $25,000 for repeated violations.

These penalties deter non-compliance and emphasize the importance of treating freelancers fairly and abiding by the law.

Practical Steps to Ensure Compliance

Complying with the Act doesn’t have to be overwhelming. By adopting these proactive measures, you can maintain compliance while fostering strong, professional relationships with freelancers.

Develop a Standardized Contract Template

Create a comprehensive freelance agreement template that meets all the Act’s requirements. Collaborate with legal counsel to include additional clauses relevant to your business, such as confidentiality, intellectual property rights, and project milestones. Having a ready-to-use template streamlines onboarding and ensures consistency across engagements.

Update Your Onboarding Process

Integrate contract execution into your standard onboarding procedure for all freelancers. Ensure no work begins until both parties have signed the agreement. Organize and store these contracts securely, just like employee records.

Optimize Payment Processes

Evaluate your accounts payable system to ensure timely payments, whether within 30 days or earlier as specified in contracts. Implement software tools or designate a dedicated team member to track payment deadlines and process invoices efficiently. Prompt payment not only ensures compliance but also builds trust with freelancers.

Train Your Staff

Ensure that managers, HR personnel, and anyone hiring freelancers understand the Act’s requirements. Training should cover written contracts, payment deadlines, and anti-retaliation rules, reducing the risk of accidental non-compliance.

Debunking Common Misconceptions

Employers may misunderstand certain aspects of the Act. Here’s what you need to know:

• “This only applies to large projects.” The $600 threshold is cumulative over a calendar year, so smaller projects with the same freelancer can quickly add up and trigger the written contract requirement.
• “An email agreement counts.” While emails can sometimes form binding agreements, they may lack the specificity the Act requires. A formal, signed document is always safer.

“This changes freelancer classification.” The Act does not alter the legal test for determining whether someone is an employee or independent contractor (the “ABC test”). It applies only to workers classified adequately as freelancers. Misclassification remains a separate legal issue.

Building Better Freelance Partnerships

The California Freelance Protection Act promotes transparency, fairness, and professionalism in freelancer relationships. By aligning your practices with its requirements, you’re not just staying compliant but embracing best practices. Clear contracts, timely payments, and respectful treatment lay the foundation for successful collaborations.

Taking these steps protects your business from legal risks and helps you build a positive reputation, attracting top freelance talent eager to work with you.