In August 2023, Illinois passed the Freelance Worker Protection Act (FWPA). The law offers protections to freelance workers and will take effect July 1, 2024. Learn more about your rights as a freelance worker below.  

Who is an independent contractor? Who is a freelance worker?

Whether you are considered an employee or an independent contractor depends on the facts. Generally, you are an independent contractor if the person paying you has the right to control or direct only the result of your work. That means the employer does not have control over what will be done or how it will be done. Learn more about how the Internal Revenue Service defines an independent contractor.

A freelance worker is someone hired as an independent contractor in exchange for $500 or more in either a single contract or a series of contracts during the past 120 days. In Illinois, a construction worker is not considered a freelance worker and is only considered an independent contractor in extremely limited circumstances.

Rights protected under the FWPA

Right to payment

A business that has contracted for your services is required to pay you. If the contract includes a date your payment is due, the business must pay you no later than that date. If you are a freelancer and the contract does not say when you will be paid, the business must pay you no later than 30 days after you complete all the contracted work.

If you have not been paid on time, you can file a complaint with the Illinois Department of Labor or file a lawsuit in circuit court. These claims must be filed within two years of when the final payment was due.

Right to a written contract

If you are a freelance worker, you have a right to a written contract that outlines the terms of your agreement. If the business you are working with refuses to provide you with a copy of the agreement or retaliates against you for asking for one, you can file a complaint with the Illinois Department of Labor or file a lawsuit in circuit court.

Right to be free from discrimination

The business you are working with cannot discriminate, harass, or take any action to penalize you for exercising your rights under the FWPA.

Other things to know as a freelance worker

Right to be free from sexual harassment

In Illinois, nonemployees, like independent contractors, are protected from sexual harassment. Employers are responsible for sexual harassment of nonemployees by nonmanagerial and nonsupervisory employees if the employer knew about the harassment and failed to make reasonable efforts to stop it.

Am I eligible for unemployment insurance benefits?

Even if you are considered an independent contractor for tax purposes, you may be eligible for unemployment insurance. You may be eligible for unemployment benefits unless an employer can show that:

• you are free from control or direction over your performance of services,
• the services you performed are outside the usual course or place of the employer's business, and
• you are engaged in an independently established trade, occupation, profession, or business. 

You can apply for unemployment insurance benefits with the Illinois Department of Employment Security.

Taxes

Companies do not withhold any taxes from payments to independent contractors. This means that you have to pay taxes quarterly. When a company pays you, you may want to set aside 20% to 30% of your income to make sure you have enough money to pay your taxes. 

Learn more about taxes and freelance jobs.

You can use Form 1040-ES, Estimated Tax for Individuals to figure out if you owe taxes quarterly. You will need your prior year’s annual tax return to fill out Form 1040-ES. See the Internal Revenue Service website for more information.