How Freelancers Can Avoid Not Getting Paid

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Experts reveal how the self-employed can ensure they get their just dues

By Janelle Harris – May 16, 2011

How Freelancers Can Avoid Not Getting Paid:
Experts reveal how the self-employed can ensure they get their just dues
By Janelle Harris

This morning, I didn't have enough money to ride the train. My checking account is overdrawn, so my debit card had about as much value as the sheet of plastic it's crafted out of, and the one credit card I keep on hand for these types of emergencies is pitifully over limit. I was stuck.

The irony of it all? I'm a freelance writer who's owed, in total, about $13,000 for copywriting, editorial, even editing a novel. There seems to be a widespread misconception that the 'free' in 'freelancer' is meant to be taken literally, making the accumulation of overdue payments an unfortunate rite of passage for consultants and other media entrepreneurs.

"We know from surveys of our members [conducted in 2010] that over 77 percent have been stiffed at one point, and it's happened to about 40 percent of them within the past year alone," claims Sara Horowitz, founder and executive director of Freelancers Union, a collective that supports the contracting community. "We've heard and seen almost everything: horror stories about small claims court or people losing tens of thousands of dollars. About a dozen of our members were all stiffed by one company, which then required them to agree to do further work as part of an agreement to pay their back wages."

To avoid being one in that dismal number, freelancers have to be strategic. We've got to put the following into regular practice, so we won't find ourselves in the position of fighting for our own money. Grrr.

Join an organization or union. 
We know, we know: you work alone. But there's still power in numbers when you belong to a professional group. More than 150,000 folks in media-related fields are currently members of the Freelancer's Union. There are plenty of others, like the National Association of Hispanic Journalists, the American Society of Journalists and Authors, the National Association of Black Journalists, the National Association of Independent Writers and Editors, each with a hearty membership. Research, join up, and let a governing body with experience dealing with members' needs be the wind beneath your wings in the face of a mounting non-payment.

Get project specs and payment terms in writing.
The most ideal scenario is the one where we contractor types never find ourselves scrambling for payment in the first place. That means making the terms of our working conditions crystal, sparkling clear from the get-go -- in writing. "One of the biggest mistakes that freelancers make is they don't have thorough communication with their clients regarding both parties' expectations. In other words, a contract," says Horowitz. "Last year, we surveyed over 3,000 independent workers from across the country, and only 33 percent always used a contract. What happens if the client doesn't like the work? When is the client expected to make their first and final payments?"

Contracts are admittedly unsexy and sometimes awkward. But churning out freelance work without terms and conditions nailed down in print is like having unprotected sex: a no-no in this day and age.

Learn -- and flex -- your state's contracting laws.
2010 was a particularly rough one for freelancers in New York where, according to research gleaned from a study conducted by Rutgers University economist William Rodgers, 42 percent of independent contractors struggled to collect an estimated $4.7 billion in lost wages. The impact has been so great and far-reaching that Senator Daniel Squadron (D) sponsored Bill S8084, otherwise known as the Freelancer Payment Protection Act. "The areas of Brooklyn and Manhattan I represent are some of the greatest neighborhoods in the world. They're full of freelancers, but also very expensive. I've heard stories of folks who were at risk of being forced to move because an expected payment was never made," says Sen. Squadron. "It's difficult enough to work as a freelancer without having to spend extra time trying to collect your wages, or worry that the wage will never come." The bill, he adds, will spare contractors who generally don't have the legal protections they need from investing extra energy just to get paid for the work they've done.

Knowing the specific laws in the state your freelance business is based in can empower you to gently nudge editors for payment or, if need be, outright scare them. After all, they wouldn't want to be in violation of the law, now would they?

Research the pub before you say 'yes.'
Freelance forums have a treasure trove of information, complete with names and incidents, about publications with bad reputations for failing to pay. Learning from others' mistakes will keep you from making some of your own -- at no cost.

"We're very close to releasing a platform for freelancers to use called the Client Scorecard that will let them rate clients based on key factors like timely payment," Horowitz explains. "That way, freelancers can protect each other and themselves, not to mention set expectations for good standards in the business world."

Call, email, communicate. Call, email, communicate. Call, email... 
About.com freelancer Allena Tapia is waging a battle of her own due to a sour business account. "Right now, I'm waiting on a magazine to pay me, a trade title that I've worked with for over two years. They're having cash flow problems, and they've owed me a small amount since November: $300 plus a bonus plane ticket worth about $200." Hardly a jaw-dropping figure, the Michigan-based writer admits. Anything less than $1,000, in her opinion, isn't worth the time and expense of taking legal action. Still, it's her money. She earned it, she should have it, and she's making sure she gets it.

"I write and call every other day. They respond about once a week saying a vague, 'We're working on it.' Today, I told them I need a solid date or I will go to both the Freelance Writers Union and Editorial Freelancers Association, and I'll go to Whispers and Warnings," a watchdog forum that puts an all-points bulletin out on non-payers and other freelance un-friendly losers. She pulled one more ace move out of her strategy book. "I told them I'll publicly blog about it at freelancewrite.about.com, where I get about 100,000 hits." Checkmate.

Horowitz admits it's rarely worth the time and money to pursue a non-paying individual or company in court, but suggests freelancers continue to communicate with their debtors by phone and email, and should consider sending a formal letter if those tactics prove unfruitful. "We've seen some funny, unorthodox approaches to shaming clients who don't pay, but most freelancers prefer to keep things quiet to protect their own reputation," she explains. (Umm, the heck with that, by the way.)

It's easy to get lost in repeat assignments (They like us! They really like us!), but when the unpaid invoices start stacking up, you have to pull the plug on a client until you the check is officially cut. That makes staying on top of bookkeeping and accounting an essential part of the freelance life. It's not fun, it's not glamorous, and it doesn't even give you that warm fuzzy feeling of a perfectly executed feature story. But it will keep a roof over your head and ensure that you can actually afford to heat your humble abode.

As for my 13 grand budget deficit, I was temporarily forced back into the 9-to-5 world of bosses and cubicles –- oh, and regular paychecks –- in order to keep the lights on. And, like Tapia, I also hold down a side gig as bill collector, with an active cycle of phone calls, emails, and shame-on-you messages for those clients in arrears.

How do you ensure that your freelancing checks come on time, all the time?

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