Do you need a written contract to hire a freelancer?

Jakub Król

Oct 26, 2026

A designer in headphones working at a desk with a large monitor

Usually not under federal law, but often yes in practice. No federal rule says a freelance agreement has to be written down, and a verbal deal can still be a contract. New York State and New York City, though, require a written contract once a freelance job reaches $800, and Illinois requires one from $500. And wherever you are, you need a signed document to own what a freelancer makes for you.

So the real question is not whether a handshake can bind you. It's what you lose without the paper. This post covers the laws that require a written contract, what happens to copyright without one, and what a contract can and can't settle about whether someone is really a contractor.

Summary

Federal law doesn't require a written freelance contract. A verbal agreement can be enforceable, but it leaves the terms to memory, and memory loses disputes.
New York State and New York City require one at $800. The New York State law counts every job for the same client over the previous 120 days, and the hiring party must keep the contract for six years.
Illinois requires one at $500. It covers work worth $500 or more over 120 days, the business must give the freelancer a copy and keep the contract for two years, and a freelancer who asked for one and didn't get it can claim $500 in statutory damages.
Without a signed writing, the freelancer usually owns the work. Copyright moves to the client only through a signed work-made-for-hire agreement, which fits nine kinds of work, or a signed assignment.
A contract doesn't decide contractor status on its own. The IRS treats it as one piece of evidence, and California presumes a worker is an employee unless the business proves otherwise.

Once the contract is written, Inkly gets it signed by both of you before work starts and sends each of you the signed copy.

What the law says by default

Contract law cares about agreement, not paperwork. If you offer a freelancer $2,000 to build a website and they accept, you have a contract whether it was signed, emailed, or said on a call. No federal statute requires freelance service agreements to be written.

The trouble starts when something goes wrong. Say the site launches two weeks late and the freelancer says the deadline was a target, not a promise. With nothing in writing, a court weighs your word against theirs. The written contract doesn't create the deal. It proves it.

A contract signed electronically counts as written. The ESIGN Act and state laws treat an electronic signature like ink for almost every business agreement, as we explain in are electronic signatures legally binding?

Where a written contract is required

A woman in a rust linen shirt points with a pen at a printed two-page agreement on a wooden table while a woman in a cream sweater reads along beside her in a sunlit studio

Three laws change the default. All three require a written contract above a dollar amount and let the freelancer claim damages if they asked for one and didn't get it. Here is how they compare:

	New York State	New York City	Illinois
Applies at	$800 in 120 days	$800 in 120 days	$500 in 120 days
Keep the contract for	6 years	No set period	2 years
Penalty if you refuse	$250	$250	$500

New York State: the Freelance Isn't Free Act

New York added the Freelance Isn't Free Act to its General Business Law on August 28, 2024. It covers anyone hired as an independent contractor for $800 or more, counting every contract between the same two parties in the previous 120 days. Lawyers, licensed medical professionals, sales representatives, and construction contractors are excluded.

Under section 1412, the contract must be in writing and must include:

both parties' names and mailing addresses;
an itemized list of the services, their value, and the rate and method of pay;
the date payment is due, or how that date is set;
the date by which the freelancer must submit a list of services rendered.

The hiring party must give the freelancer a copy, on paper or electronically, and keep the contract for at least six years. If it can't produce the contract, the freelancer's account of the terms is presumed correct. When no payment date is set, payment is due within 30 days of the work being completed, under section 1411.

The penalties are modest per contract but add up. Under section 1414, a freelancer who asked for a written contract before starting and didn't get one can recover $250 in statutory damages. The Attorney General can seek civil penalties of up to $1,000 for a first violation, rising to $25,000 for a pattern or practice.

New York City: the city's own law

New York City has its own Freelance Isn't Free Act, enforced by the Department of Consumer and Worker Protection. It uses the same $800 and 120-day test. The contract must include:

the work to be done;
the pay;
the payment date.

Both parties must keep a copy. Under section 20-933 of the city's Administrative Code, a freelancer who asked for a written contract before the work began and didn't get one is awarded $250. A business in the city should meet both laws, and following the state law's list of terms covers the city's.

Illinois: the Freelance Worker Protection Act

Illinois's Freelance Worker Protection Act applies to contracts that took effect after July 1, 2024, for work worth $500 or more over 120 days. Under section 15, whenever a business retains a freelancer, the contract must be in writing. The business must give the freelancer a copy, on paper or electronically, and keep the contract for at least two years.

The contract must include:

both parties' names and contact information, including the business's mailing address;
an itemized list of the products or services, their value, and the rate and method of pay;
the payment date, or how it's set;
if the business needs one, the date by which the freelancer submits a list of services rendered.

Without a due date, payment is due within 30 days of the work being completed.

The freelancer's request matters for one remedy only. A freelancer who asked for a written contract before starting and didn't get one can claim $500 in statutory damages under section 30. A missing contract doesn't void the deal itself.

Both states publish free model contracts that meet their requirements.

Who owns the work without a contract

A gray-haired designer in a navy overshirt sketches simple logo shapes in pencil in a large sketchbook at a café table by the window, with a cup of coffee, loose sketches, and terracotta color swatches beside him

This is the reason to get a contract in writing even where no law requires it. When a freelancer creates something, they own its copyright, not the client who paid for it. Paying the invoice doesn't change that.

Work made for hire

A commissioned work is a work made for hire only if it meets all four tests in the Copyright Office's Circular 30: there's a written agreement, it says the work is made for hire, both parties sign it, and the work fits one of nine categories. Those categories are a contribution to a collective work, part of a film or other audiovisual work, a translation, a supplementary work, a compilation, an instructional text, a test, answer material for a test, and an atlas.

Logos, websites, photographs for your marketing, and most software aren't on that list. For those, a "work made for hire" clause doesn't transfer anything.

A written assignment

For everything else, the freelancer has to assign the copyright to you. Under 17 U.S.C. § 204(a), a transfer of copyright ownership isn't valid unless it is in writing and signed by the owner, here the freelancer. Without one, the freelancer keeps the copyright, even though you paid for the work.

What a contract can and can't prove about contractor status

Calling someone an independent contractor in a contract doesn't make them one. Each agency looks at how the work actually happens.

The IRS uses the common-law test, which looks at three kinds of evidence: behavioral control, financial control, and the relationship of the parties. According to IRS Topic 762, a written contract describing the relationship you intended is evidence in the third category, not the whole answer. Either side can ask the IRS to decide with Form SS-8.

The Department of Labor proposed a new rule for the Fair Labor Standards Act on February 26, 2026. It would replace the 2024 rule with an "economic reality" test built around two core factors: the worker's control over the work, and their opportunity for profit or loss. The comment period closed on April 28, 2026, and as of this post the rule is still proposed, not final. The DOL says it has already stopped applying the 2024 rule in its investigations.

California is the strict end. Under its ABC test, a worker is an employee unless the business proves all three conditions: the worker is free from its control, does work outside its usual business, and runs an independent business of the same kind. Some occupations use the older Borello test instead.

A contract still helps. It records that you both intended an independent relationship. It just can't contradict what happens day to day.

A realistic scenario

Say a Chicago marketing agency hires a freelance designer to create a client's logo for $1,200. They agree on a call, the designer sends the files, and the agency pays.

Two problems are already in place. The job is over Illinois's $500 threshold, so the agency was required to put the contract in writing, give the designer a copy, and keep it for two years. If the designer had asked for one before starting, they could also claim $500 in statutory damages. And because nothing was signed, the designer still owns the logo's copyright. The agency's client is about to put that logo on every product it sells.

Adding "work made for hire" now wouldn't help, because a logo isn't one of the nine categories. The fix is a short written assignment, signed by the designer, that transfers the copyright in the logo to the agency or straight to its client. Most freelancers will sign one, especially once paid. Getting it signed before the work starts is easier, and it's the only way to be sure.

What to do

A woman at a cream desk slides a signed sheet of paper into a terracotta folder, with a closed laptop and a pen beside her

Put it in writing before work starts. The freelancer may send their own, such as our free independent contractor agreement or, for advisory work, a consulting agreement. Read the clauses on ownership and payment closely.
Cover what your state requires. In New York or Illinois, check the required terms above, or start from the state's model contract.
Settle ownership in the contract. Use a signed assignment for anything outside the nine work-made-for-hire categories.
Give the freelancer a copy and keep yours. New York requires six years and Illinois two. Keep it at least as long as you use the work, and as long as either of you could still bring a claim over it.

Inkly handles the signing step. Each of you signs in the browser, the audit trail records who signed and when, and when the last person signs, everyone gets an email with the signed PDF and its Certificate of Completion. The Free plan keeps documents for 14 days, so download your copy to keep. Pro has unlimited document retention.