A new California freelance law went into effect January 1, 2025. The law, known as SB-988 Freelance Worker Protection Act, has some important new requirements that freelancers operating in California need to be aware of. This new law also provides some powerful new protections that are great news for freelancers in the state.

Freelance Law SB-988 Requires Written Contracts Between Freelancers and Clients

SB-988 introduces a new requirement that all freelance projects in California with a value higher than $250 must have a written contract. SB-988 heavily implies that the responsibility for the creation and management of the contract falls to the hiring party, but this is something I strongly recommend all freelancers avoid if possible.

I know some people will be upset that they are now required to use a contract, but I don’t personally see this as a negative – the fact is, freelancers have almost no valid excuse NOT to use a contract other than their clients refusing them. The good news is that this new freelance law removes that objection by making the contract mandatory.

This new requirement shouldn’t be terribly difficult to comply with, anyway. According to SB-988, the contract can be very simple – the bill only requires the names and addresses of the two parties, the dollar amounts of each service item in the contract, the due dates for both the freelancer to deliver the work and the client to pay the invoice, and valid signatures from both parties.

If you’re worried about the effect this law might have on your competitiveness, most states with big freelancer populations already have similar laws in effect. My hope is that this won’t be a competitive disadvantage for California-based freelancers, but time will tell.

Freelance Law SB-988 also provides powerful new protection

Now for the good news – by requiring contracts on all freelance projects, SB-988 is able to offer some strong new protections that would be difficult to enforce without that mandatory contract provision. If a written contract is in place, it’s easier for the courts to hold the client to a much higher standard. While there are many provisions in the new freelance law that benefit freelancers, here are the 8 most compelling new protections:

1. Legally establishes up to 2X damages award if the client does not pay the agreed amount by the date agreed. This substantial 2X award makes it far more worthwhile to sue nonpaying clients, but it also means that late payment is now treated as a serious civil matter that can also lead to substantial damages for clients
2. Freelancers are now eligible to recoup reasonable attorney’s fees and costs when suing. This is usually only available to plaintiffs if there is a specific law granting them that right, and now there is one for freelancers. This has potentially huge implications – it makes it much easier for a freelancer to not only sue and win, but to use less of their limited personal time doing so because it opens the door to hiring an attorney and filing a proper civil action. Before this freelance law went into effect, it only made sense to sue a client if the unpaid invoice was small enough to take to small claims court (under $3,500) where no attorney is present, OR was big enough that any award you receive would be enough to absorb your attorney’s fees and still be worth the effort. This is no longer a concern
3. Once work has begun, the client cannot legally demand changes to the fee or deliverables as a condition of paying (or paying on time)
4. Any violation of the rules laid out in SB-988 by the hiring party can result in the freelancer being awarded the full agreed upon amount in civil court
5. Any waivers to this law are unenforceable. In other words, if your client sneaks a provision into the contract saying that you agree not to exercise any of your rights under this new law, the court will not respect or enforce that portion of the agreement

As you can see, there are some robust new protections included in the bill that give us many more options for dealing with late or nonpaying clients. But the biggest benefit to contractors in this new freelance law is the deterrent effect it will likely have on client behavior.

You can read the entire SB-988 bill yourself here. You can also check out some of the helpful legal tools included with the Freelance Mentors subscription.