4 ways freelancers can protect themselves from financial exploitation

After Memorial Day weekend, I returned to my desk after a month of vacation. I went to check whether or not the $5,000 or so I was owed for freelance work by three different clients had been paid out. When I rifled through my mail thrice and checked my bank account, I was dismayed to find that none of the money that was owed to me had been paid out.

I recently wrote an essay that documented the measures I took to chase down these payments and late fees for the cost of following up on outstanding payments and any interest accrued. This meant multiple follow-ups, researching and citing freelance laws, and getting a lawyer to help write a demand letter. Ultimately, what I saw as doing business resulted in severing relationships with some of these clients.

My story, even though it was self-published, went viral. Many folks who work outside journalism got in touch; people who were self-employed in advertising, web design, consulting, and construction messaged me to say how much the story resonated. In other words, no type of freelancer seemed immune to late payment.

For those of us who work in the naturally precarious gig economy — more than 56 million Americans in 2018, according to a report from Freelancers Union and Upwork — not getting paid on time is a common occurrence. Some might even say that fighting to get paid is part of the job. Regardless, it goes to show how some businesses — whether they be publications, individuals, or otherwise — don’t seem to think that it’s important for freelancers to be paid on time. That’s frustrating, but here are some proactive steps you can take to protect yourself as much as you're able to from late or missing payments.

Get (and actually read) your contract

A contract you sign with a client is legally binding. If you or the client breach any terms of the contract — say, if a client is late to paying you when the contract spells out payment terms — there may be legal repercussions.

Pay attention to not only what rights to your work you're signing away to your client, or what happens if an angry reader or source decides to sue you for a story you’ve written, but also how much and when you'll get paid.

Negotiate your contract if need be

In some industries, you may be able to negotiate to receive full payment before delivering the project. In others, you may be able to negotiate for partial payment (for instance: half upfront, and half after the project is complete). For journalists or writers, sometimes payment can only be processed after the story publishes, which is frustrating when a story lingers in edits for what seems like forever.

Negotiate for payment upon acceptance. Depending on the editor and publication, sometimes you'll be able to submit the first draft of a story to an editor and they will deem it acceptable to work on with you, so you can go ahead and invoice. Other times, you'll have to wait until after the story has completely gone through edits. Definitely discuss what “on acceptance” means to your editor.

Another note for journalists and writers: Negotiate for payment to be made within 30 days of invoicing, keeping in mind that rent, health care premiums, and credit card bills need to paid in a timely manner so you should be getting paid accordingly. If a client stipulates 45, 60, or 90 days' payment after invoicing, you can negotiate your project rate such that it reflect the interest that accrues for payments made after 30 days.

Add a late fee stipulation to your invoice (if there isn't one in there already)

Try to get a late fee written into your contract (for instance, “Payments made 30 days after invoicing are subject to a 10% late fee.) If your client does not agree to have a late fee in your contract, you can still remind the folks processing payments that invoices not paid on time are subject to a late fee. And of course, if a client won’t budge on a contract that sounds exploitative in terms of payment terms or rights, remember that you can always decline the assignment.

Use invoicing software

Freshbooks, Wave, and others allow you to set reminders after a certain number of days has passed since invoicing for when it might be time to send an email to a client to follow up on an impending payment. Some of these apps are free, others are not.

(Or, you can be like me, and have an old-school Excel spreadsheet that tracks invoices and the dates they were sent, and check it periodically. Friday is typically my bookkeeping day, and I open my spreadsheet to take a look at what’s due or upcoming.)

Join a freelancer’s union

Freelance unions have resources that union members can access. For instance, the National Writers Union has legal resources that can help you write demand letters, organize group grievances, and, when needed, go to court. In 2018, they helped writers collect more than $200,000. Membership fees for the National Writers Union varies based on income levels.

The Freelancers Union is open more broadly to freelancers (for instance, lawyers, consultants, designers) but don’t offer any direct legal representation. They do host monthly events in New York (where they're based) during which workers can speak to a lawyer or city representative about nonpayment issues.

Know your rights and exercise them if you need to

If you're in New York City, you can cite the Freelance Isn’t Free Act, which stipulates payments 30 days after completion of services — this can help expedite your payment and or late fee (and here are a few other resources for all freelancers, regardless of location). If all else fails, look for a media lawyer to help write a letter on your behalf demanding payment from a client. Some kind lawyers will help you write this letter for cheap or pro-bono.