New York's Freelance Isn't Free Act: The New Statutory Protections for Real Estate Salespersons and Associate Brokers
If you are a real estate salesperson or associate broker in New York paid on commission as an independent contractor, you have had a statutory weapon in commission disputes since August 28, 2024 that you probably didn't know about. New York's Freelance Isn't Free Act (or "NYFIFA", General Business Law Article 44-A) treats you as a "freelance worker" and your sponsoring broker as a "hiring party." That means the brokerage must give you a written contract with specific terms, must pay you on a statutory timeline, and can be hit with double damages, mandatory attorneys' fees, and additional statutory damages if it doesn't. The real estate industry is lobbying to carve licensees out of the law, but as of today no exemption exists.
We've written a general guide to the Freelance Isn't Free Act before, but this post is about how it lands on the brokerage industry specifically. Brokerages that haven't updated their independent contractor paperwork since 2024 are exposed. Junior brokers who are owed a split have leverage they never had before. This post explores the changing landscape from both perspectives.
Why NYFIFA covers real estate licensees
NYFIFA applies to any "freelance worker," meaning a natural person (or an entity composed of no more than one natural person) retained as an independent contractor to provide services worth $800 or more. This casts a very wide net. The statute has exclusions, but none of them reach real estate licensees. It carves out attorneys, licensed medical professionals, construction contractors, and "sales representatives" as defined in Labor Law § 191-a. That last one trips people up. Section 191-a covers wholesale sales reps who solicit orders for a principal's products; it has nothing to do with Real Property Law Article 12-A licensees. Nor does Labor Law § 511(19), which treats licensed real estate professionals as non-employees for unemployment insurance purposes, say anything about NYFIFA. The New York State Association of REALTORS® reached the same conclusion in its own member guidance, which tells brokers plainly that the Act applies to them and rebuilt NYSAR's statewide independent contractor form around it.
One genuine limit: the "no more than one natural person" language. A solo salesperson, or one who takes commissions through a single-member LLC, is covered. The First Department held under the parallel New York City law that a one-person corporation qualifies, and later that a freelancer who used assistants on a job was still covered (Chen v. Romona Keveza Collection LLC, 208 A.D.3d 152 (1st Dept 2022)). But a team leader whose multi-agent team contracts with the brokerage as a unit may fall outside the definition. That question is still being resolved by the courts.
What NYFIFA requires of brokerages
Four obligations matter most.
A written contract with mandatory terms. The brokerage must reduce the engagement to writing, deliver a copy (paper or electronic) to the agent, and keep its own copy for six years. The contract must contain: the name and mailing address of both parties; an itemization of the services to be provided, plus the rate and method of compensation; the date payment is due, or the mechanism for determining it; and the date by which the agent must submit a list of services rendered to meet the brokerage's internal processing deadlines. In practice this means the split itself, the timing of the payout, and the invoicing deadline all have to be in writing. A handshake split, or a split described only in an office policy manual that the agent never signed, doesn't satisfy the statute. This is a game-changer for junior brokers; we often hear from real estate salespersons whose managing brokers have told them they'll receive a vague "cut" without committing to a specific percentage. That practice has just become a lot riskier for the brokerage.
Payment on the statutory clock. The agent must be paid by the date in the contract. If the contract is silent, payment is due within 30 days after the agent's services are complete. In a brokerage context that will usually mean 30 days from the brokerage's receipt of the commission at closing, though a contract can set a different, clearly stated schedule (e.g., "the last business day of the month following closing"). If the brokerage wants anything other than the 30-day default, it needs to be in the written agreement.
No post-performance cram-downs. Once the agent has started performing, the brokerage cannot condition timely payment on the agent accepting less than the agreed amount. Renegotiating a split after the deal is in contract, as a price of getting paid at all, is exactly what this provision targets.
No retaliation. The brokerage cannot threaten, intimidate, discipline, harass, deny work opportunities to, or otherwise penalize an agent for exercising or attempting to exercise rights under NYFIFA. Freezing an agent out of leads after she asks for her contract in writing is a separate statutory violation with its own damages.
A related record-keeping trap: if the brokerage cannot produce the written contract on request, the statute presumes that the terms the agent describes are the agreed terms. The broker's failure to keep paperwork becomes the agent's evidence. This too is a major change from the prior landscape, where related laws (like New York's Statute of Frauds) actually incentivized managing brokers to keep commission sharing agreements out of writing.
The damage amplifiers
This is where NYFIFA changes the economics of an ordinary commission dispute. Before FIFA, these would be breach-of-contract claims where each side would have to bears its own legal fees. A junior broker seeking to enforce a commission split would typically have to accept an ugly compromise. FIFA changes the outlook significantly, with a variety of protections that can force a brokerage or managing broker to write a much larger settlement check.
Late or short payment (GBL § 1411). A prevailing agent recovers the unpaid amount, double damages, injunctive relief, and reasonable attorneys' fees and costs as of right. A $30,000 split becomes $60,000 plus fees. In such a dispute, the fees could take the liability into the six figure range if the brokerage decides to fight it out and loses.
No compliant written contract (GBL § 1412). Statutory damages of $250. Modest on its own, but the statute goes further: a plaintiff who prevails on a written-contract claim together with another violation is awarded statutory damages equal to the value of the underlying contract in addition to the other remedies. Some practitioners read the stacking provisions to permit recovery of as much as four times the amount owed in a case that combines nonpayment with a missing contract. That reading hasn't been tested in a reported decision, but the exposure is real.
Retaliation (GBL § 1413). Statutory damages equal to the value of the underlying contract for each violation, on top of any other damages.
Pattern or practice. In any private suit, the trier of fact may impose a civil penalty of up to $25,000 against a hiring party found to have engaged in a pattern or practice of violations.
Attorney General enforcement. The AG can investigate, sue for injunctive relief and restitution, and seek escalating civil penalties. An agent's private suit and an AG action can proceed on the same facts.
Limitations periods are generous. Nonpayment and retaliation claims can be brought within six years; a standalone written-contract claim must be brought within two.
Where NYFIFA cuts the other way
The statute amplifies damages once entitlement is established. It doesn't decide who was the procuring cause of a sale, whether a listing belongs to the departing agent or the brokerage, or whether a training-draw clawback is enforceable. Those fights are still governed by the contract and ordinary commission law. An agent who wasn't actually owed the split gets nothing extra from the Act.
Two procedural points also favor brokers. An agent whose only claim is the absence of a written contract must prove she asked for one before the work began. And well-drafted brokerage agreements often include arbitration clauses, fee-shifting provisions running in the broker's favor, and class-action waivers that shape how, and where, these claims get litigated. Andrew Lieb's one-year retrospective in the New York Real Estate Journal describes a surge of agent-broker NYFIFA claims and notes that they rarely travel alone. They arrive bundled with breach-of-contract, misclassification, Human Rights Law, and Labor Law § 740 whistleblower claims, and brokers respond with restrictive-covenant and clawback counterclaims.
Has any court ruled on this yet?
Not on the broker-agent question. As of this writing there is no reported New York decision applying either the state Act (NYFIFA) or the older New York City Freelance Isn't Free Act to a dispute between a real estate brokerage and its licensee. The appellate decisions that exist construe the City law in other industries: Chen (photographer and model versus a bridal shop), MJ Lilly Assoc., LLC v. Ovis Creative, LLC, 221 A.D.3d 805 (2d Dept 2023) (reading "hiring party" broadly), and Snazzi Reporting, Inc. v. Veritext, LLC, 2024 NY Slip Op 05421 (1st Dept 2024) (court-reporting services). A court facing a brokerage case would likely import those holdings, since the state statute was modeled on the City law. The agent-broker cases Lieb describes appear to be trial-level, settled, or in arbitration. Until one reaches the Appellate Division, the statutory text and NYSAR's own guidance are the only authorities.
The push for a real estate exemption
NYSAR has made carving licensees out of NYFIFA one of its 2026 legislative priorities, supporting amendment language (A.866, sponsored by Assemblymember Glick) that would exclude licensed real estate professionals consistent with Labor Law § 511(19). The argument is that commission-based brokerage compensation doesn't fit a law designed around invoiced freelance projects, and that licensees already have compensation protections elsewhere.
That may or may not carry the day in Albany. For now it hasn't. The Act applies to New York brokerages in full, the Attorney General's Labor Bureau enforces it, and any exemption enacted later would almost certainly operate prospectively. A brokerage that is out of compliance today can't count on a future amendment to erase liability for commissions it shorted in 2025 or 2026.
Frequently asked questions
Does the Freelance Isn't Free Act apply to real estate agents in New York City? Yes, twice over. New York City has had its own Freelance Isn't Free Act since 2017, and the state law added a second layer in 2024. Both apply to a New York City brokerage and its licensees, and the City's Department of Consumer and Worker Protection runs a complaint process alongside the state Attorney General's.
What if my broker never gave me a written independent contractor agreement? You may have a claim for $250 in statutory damages, and if you were also underpaid or paid late, potentially much more. But if the missing contract is your only complaint, you must be able to show you asked for a written agreement before you started working. Ask in writing, and keep the email.
How long do I have to sue my brokerage for an unpaid commission under NYFIFA? Six years for nonpayment or retaliation claims. Two years if your only claim is that you were never given a compliant written contract.
How we can help
Our firm has been at the cutting edge of FIFA litigation in this context. We have taken numerous brokerages to court for overlooking this industry sea change, and obtained favorable results for our clients. If you are an agent who is owed a commission splits and wants to understand what the statute actually gives you, we're glad to talk it through.
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