Self-employed people may be referred to as a freelancer, independent contractor, contract worker, contingent worker, consultant, gig worker, 1099 worker, or subcontractor. These are all essentially the same in the eyes of the law. Whether you intend it or not, you are your own small business, and generally the law treats you as a business, not as an employee.

In general the employment laws don’t apply to you (unless your “client” is misclassifying you as an independent contractor – see below). But business laws do apply. But first you must determine whether you qualify as a freelancer (see below).

For even more about freelancer law, see our Guide to Freelancer Law in the U.S.

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1. Do I qualify as a freelancer?

I’m not sure if I am a freelancer/independent contractor. How do I know? 

Determining whether you are an independent contractor (aka freelancer) or an employee can be difficult, especially under the new AB 5 law.

See our full write up on Employees vs Independent Contractors.

Is there a different standard for when federal independent contractor laws apply?

Yes. See our Guide to Freelancer Law in the U.S.

2. Employment Law and Freelancers

Does employment law apply to freelancers?

In general, freelancers are considered their own business, rather than an employee. Thus employment law does not apply, including wage and hour laws, family and sick leave, unemployment benefits, workers compensation and disability benefits, and even most anti-discrimination laws. That is, unless a freelancer is “misclassified” and should be an employee under the standards above.

However, there are minor exceptions. In particular, California law says that sexual harassment applies to freelancers.¹CA Govt Code Sec 12940(j)

Instead of employment laws, business laws apply to freelancers. In addition, as of January 2025, the California Freelance Worker Protection Act provides payment protections for freelancers who work for a hiring entity based in California.

3. Non Compete

Can my client prevent me from working for a competing company?

In California, a company may not prevent an independent contractor from working for the company’s competitor. The independent contractor has the right to perform work for multiple companies at the same time.

Companies may try to do this through a “non compete” or “non competition” clause in the contract. But these are generally not valid.

However, this does not mean you can use confidential and proprietary information (aka “trade secrets”) you obtained from performing services for one company to your own benefit or for the benefit of another company. A related concept is that a company you perform services for may prohibit you from “soliciting” their clients, through a “non solicit” or “non solicitation” provision. But if the clients contact you on their own, the company can’t prevent this.

4. More Info

Do I need to have an LLC to work as a freelancer?

Legally, it’s not required to have an LLC to be a freelancer. However, many companies require freelancers to have an LLC in order to work with them. It also can be very beneficial to protect a freelancer’s assets and (possibly) save on taxes. See our Guide to Business Structures.

How do taxes work for California freelancers?

See our Guide to Taxes for California Freelancers.

What else do I need to know?

For the following info, see our Guide to Freelancer Law in the U.S.

When do I pay taxes as a freelancer?

Do my clients need to send me any tax forms at all?

Do I need to send any tax forms for freelancers/subcontractors I hire?

What are my intellectual property rights as a freelancer?

Recommendations

• To protect your rights as a freelancer, you should get a good contract drafted by a lawyer to spell out exactly what the terms are when a client hires you.
• It may also be a good idea to form an LLC or corporation to protect your assets and possibly save on taxes.
• Find a good business lawyer.

Related Pages

California Freelance Worker Protection Act

Freelancer Resources

Freelancers vs. Employees

Guide to Contracts

See all Legal Guides