As of April 2015, Putlocker is free to use. However, legality of viewing linked content varies based on location and copyright laws. It's advisable to research regulations and copyright status before viewing potentially unlicensed content. Downloading even part of an unlicensed file is considered a violation of copyright law.
Putlocker eschews legal responsibility for linked content by claiming no affiliation with the third party file storage sites that actually host potentially unlicensed content. Directly hosting unlicensed content is a clear violation of copyright law. Putlocker appears to sustain free service by relying heavily on ad revenue. In addition to ad banners, many of the video links redirect to a sponsored site.