Customers do not work for independent consultants who supply their services in accordance with an agreement in writing. They are self-employed and accountable for the payment of their costs. They are required to pay self-employment tax on income they earn. The customer is considered to be an employee if consultants who are independent do not make a formal contract. This means they are entitled to all employment law protections such as sick leave and health insurance coverage.
The law doesn’t apply to those who perform services as part of unwritten or implied contracts. Workers who are bound by collective bargaining agreements do not have to comply with the law. The law does not cover individuals and partnerships who are subject to taxation on income. It does not apply sole proprietorships and other unincorporated companies that fall within the tax on single owners.
The Freelance Act has its flaws.
This law doesn’t specify what defines an “independent contractor”. It instead offers guidelines that judges will examine when deciding if they are deciding whether someone is an employee or independent contractor. It is subject to interpretation, and may result in costly lawsuits.
The companies must track hours worked by independent contractors in the legislation. This could limit freelancers’ capacity to change their working hours since many prefer working remotely. Invoices that are not paid can be a major issue due to the fact that many small companies don’t pay their invoices on schedule and freelancers don’t have enough money to be compensated. This law doesn’t directly address the problem. The liability shifts from companies who don’t pay their bill to companies that must incur extra cost to ensure that they conform to the new law. The biggest issue is enforcement that this law has. The law is a struggle to enforce because of the limited resources available and workforce