Overview
The Act on the Optimization of Transactions Related to Specified Consignees (Freelance Protection Act) took effect on November 1, 2024, providing legal protection for freelancers against unfair treatment by clients.
Who Is Protected?
Specified Consignee Business (特定受託事業者) = a sole proprietor or single-person company with no employees that receives business commissions.
Key Obligations on Clients
1. Written Disclosure of Transaction Terms (Article 3)
At the time of commissioning, clients must immediately provide written or electronic notice of: - Scope of work - Remuneration amount - Payment due date - Names of both parties
2. Payment Deadline (Article 4)
For ongoing contracts (1+ months), payment must be made within 60 days of delivery acceptance.
3. Prohibited Acts (Article 5)
For ongoing contracts, clients are prohibited from: - Refusing acceptance without legitimate reason - Unilaterally reducing fees - Returning deliverables without legitimate reason - Forcing purchases or use of designated services - Demanding redo work at the freelancer's expense
4. Advance Notice Before Termination (Article 16)
For ongoing contracts of 6+ months, clients must give 30 days' advance notice before mid-term termination or non-renewal.
5. Harassment Prevention (Article 14)
Clients must establish systems to prevent sexual harassment, maternity harassment, and power harassment affecting freelancers.
Penalties for Violations
- Regulatory investigations and administrative orders
- Fines up to ¥500,000 for order violations (Article 26)
Summary
The Freelance Protection Act is a landmark law extending meaningful labor-like protections to independent contractors. Clients should review their contracting workflows and update template agreements to comply with the written disclosure, payment, and harassment prevention obligations.