Penalty for Not Paying an Independent Contractor on Time in CA
Clients ghosting you before signing off on the final brand assets? California's SB 988 law makes written contracts mandatory for design projects over $250. Use our curated, industry-specific template below to lock in your 2x late payment protection.
California SB 988 · Effective Jan 1, 2025
Scan Your Freelance Contract for SB 988 Violations
Paste your current agreement or describe the engagement. Our AI flags every missing clause that exposes you to double-damage liability.
Free to start — no account required
Starter pack from $9.99 · No subscription
Know the Law
California SB 988 — Plain English
Written contract is mandatory
Any California freelance engagement worth $250 or more — individually or cumulative within 120 days — must have a written contract. An email chain counts only if it specifies parties, services, rate, and payment date.
30 days to pay, no excuses
Once you submit an invoice, the client has 30 calendar days to pay — unless your written contract specifies a different date. There is no grace period. Day 31 onwards, double damages begin accruing.
Late? You owe double.
If payment is late, the contractor is entitled to damages equal to the full unpaid amount — effectively doubling what the client owes. Plus reasonable attorney fees and court costs. This right cannot be waived by contract.
🔥 If they're 30+ days late, this is your move
Step 1 → Generate a formal SB 988 demand letter (states exact double-damage amount + 10-day response window).
Step 2 → If no response, file in California Small Claims Court (up to $12,500, no lawyer needed).
Step 3 → Present the demand letter as evidence — judge awards double damages automatically under SB 988.
Sample Language
Design Contract Template Preview
Never transfer Figma project ownership or deliver final high-res source files before the final invoice clears. Under SB 988, you hold statutory leverage.
FREELANCE GRAPHIC DESIGN SERVICES AGREEMENT
==================================================
This Agreement is entered into by and between the Creative Service Provider ("Designer") and the Client specified below.
PURSUANT TO CA CIVIL CODE (SB 988 - Freelance Worker Protection Act):
1. PARTIES:
- Designer: [Your Name / Studio Name]
- Client: [Client Company / Name]
2. DESCRIPTION OF SERVICES & DELIVERABLES:
- Scope: UI/UX Design, Brand Identity Assets, Vector Graphics, and custom design layouts.
- Source Files: Final high-resolution assets and project source files (e.g., Figma .fig, Adobe Illustrator .ai) will remain the property of the Designer until the final invoice is paid in full.
3. VALUE & COMPENSATION:
- Total Project Value: $[Enter Contract Value - Must be $250+ for SB 988 protection]
- Milestone Terms: [e.g., 50% Upfront / 50% Upon Approval]
4. STRICT PAYMENT DEADLINE:
- Pursuant to California SB 988, Client must issue final payment within 30 days of invoice receipt.
- Failure to pay timely constitutes a statutory violation, triggering mandatory double damages, collection costs, and reasonable attorney's fees in California courts.Pricing
Choose Your Credits Pack
Credits work across all features — use them for Q&A, document drafting, contract generation, and dispute plans.
Starter credits pack
For occasional legal questions or quick clause explanations. About 40 Q&A calls, 20 dispute plans, or 13 document drafts.
40 credits
Popular credits pack
Best value for individuals and small teams. About 150 Q&A calls, 75 dispute plans, or 50 document drafts.
150 credits
Pro credits pack
Designed for heavy users such as lawyers, founders, or HR teams. About 360 Q&A calls, 180 dispute plans, or 120 document/contract drafts.
360 credits
Credits work across all features; each call deducts 1-3 credits based on complexity.
FAQ
Frequently asked questions
- How much is the penalty for paying a contractor late in California?
- The contractor may recover damages equal to the unpaid amount — effectively doubling what you owe — plus reasonable attorney fees and court costs.
- Is there a minimum contract size before penalties apply?
- SB 988 protections kick in for any freelance engagement worth $250 or more, either individually or as part of an ongoing relationship within 120 days.
- Can a contractor waive their right to double damages?
- No. Any contractual provision attempting to waive SB 988 rights is void under California law.
Related Guides
Also useful for California freelancers
Stop leaving money on the table.
California SB 988 gives you powerful legal tools. Use them. Generate a compliant contract or demand letter in under 60 seconds.
No subscription · Starter pack from $9.99 · First analysis is free