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Tuesday, July 2, 2024

Protect Yourself from Unpaid Invoices: What Every Freelancer Needs to Know

MotivationProtect Yourself from Unpaid Invoices: What Every Freelancer Needs to Know


$4,509,252—that’s the amount of unpaid labor that 385 freelancers across 38 states have added to the “World’s Longest Invoice” at the time of this writing. This initiative by the Freelancers Union raises awareness for one of the key challenges for freelancers across multiple industries—getting paid. 

The number of freelancers in the U.S. has exploded in recent years. According to estimates from February, there are about 76.4 million freelancers across the country, a figure that “has grown year-over-year by at least two million since 2017.” Those estimates also “suggest there will be over 90 million U.S. freelancers” by 2028. But are businesses structured and ready to pay their consultants and freelancers on time? The World’s Longest Invoice suggests that they may not be.

Raising awareness for a persistent problem

$9,252 is the average amount each freelancer who added to that long invoice has yet to be paid, according to Rafael Espinal, executive director and president of Freelancers Union.

“The inspiration for this campaign came from the stark reality that many freelancers face—completing work for clients and then struggling to receive timely or full payment. This issue affects freelancers’ financial stability and well-being, as many rely on these payments to cover essential living expenses,” he says. “By allowing freelancers to contribute their unpaid invoices to a collective, highly visible platform, the campaign highlights the sheer scale of the problem.” Espinal has also noticed that it “fosters a sense of solidarity [and community] among freelancers,” helping them feel less alone in this struggle.

“[The campaign] supports the Union’s advocacy efforts, including the push for Freelance Isn’t Free laws that mandate written contracts and timely payment and provide legal recourse for unpaid work,” he adds. “If we are able to show public officials how widespread and egregious the issue is, it will motivate them to enact change.”

Exceptionally long wait times

14 months is the longest I have waited to be paid for freelance journalism work. This was during my time with a national magazine, one that is well-known for promoting personal health, well-being and happiness. Ironic, isn’t it? During those 14 months, I learned a few lessons, including to accept only contracts that specify payment upon approval, not publication, of my work.

This lesson is one I learned from former editor Jenni Gritters, who is now a freelance business coach and the founder of Riverwoods Media Group. “Make sure that you do get paid on time… upon approval of your first draft, however that looks,” she says. “If you’re not getting paid upon approval of your first draft, you may be waiting three months for the thing to be produced, and then net 90 after that.” She adds that you should increase your rate for longer payment terms because the company is essentially taking out a loan from you. She also advises adding late fees to contracts to prevent missing and outstanding payments.

Watching out for the bad actors

Some companies that aren’t paying freelancers on time don’t have a proper business management system in place to ensure that freelancers are treated fairly. Others are using and abusing freelancers for their benefit. “Media companies and brands often rely heavily on freelancers to create content, provide services and complete projects,” Espinal says. “Unfortunately, some of these companies take advantage of freelancers by delaying payments, renegotiating terms unfairly or refusing to pay altogether.”

This is why… the Bad Actors database [was created]—to determine which companies “have a pattern of practice” mistreating freelancers, he adds. In addition, he says that “providing freelancers with resources and education about their rights, contract negotiation and legal recourses [helps them] protect themselves.”

Setting boundaries and empowering freelancers

Lauren Wellbank, a freelance writer, found herself in dire financial straits due to $14,000 of unpaid work. She can’t share the publication’s name because, like many freelancers, she signed a non-disclosure agreement. For some, these agreements contribute to the culture of silence around the issue. 

“My very first payment was late by a week,” Wellbank says, “but I figured it was because of getting onboarded and just went with the flow. From then on, I was rarely, if ever, paid on time. When the payments would be more than two weeks late, I would follow up with my editor, and sometimes the [editor-in-chief], depending on how late it was.” 

“I got a lot of different answers, including that they had just been part of a merger and that the new company just hadn’t figured things out yet. This went on for about a year before they started to get seriously delinquent with payments. Then the stories changed, and it was that ‘we weren’t getting paid on time by advertisers,’ which was impacting payments to writers,” she adds.

Taking charge

“[It’s] the power dynamic. You are the hired hand,” Gritters says. “If you’re a freelancer, you are a business. And once you start to treat yourself as a business, you start to change your policies, you start to act differently in relationship to your clients. You start to ask for better terms. You start to read your contracts more deeply. If you sign contracts between two LLCs because you are an LLC, [then] all of a sudden, that power dynamic starts to shift.” 

She adds that the lack of ongoing relationships makes it easier for businesses and publications to take advantage of freelancers. “Frankly, a lot of organizations still just don’t have great policies around payment. … Businesses are not yet set up to function with a focus on freelancers. It is new that so many people are freelancing.”

Wellbank drew the line and cut off work to the publication. “There were a few hairy months when things were late enough that they put me into a bad financial situation, so I started to push back and I refused to write new stories until I had been paid for the old ones.”

She “filed a complaint under the Freelance Isn’t Free Act” and didn’t write for the publication again after her payments finally came through—which took around a year, she reports.

Ongoing relationships keep communication lines open

Most of the freelancers Wellbank worked with at that publication were missing over $10,000 in unpaid invoices. But it wasn’t the same for everyone—only those without an ongoing relationship with leaders seemed to be affected.

“I found out that it was just the freelancers who weren’t being paid on time, and that all the [full-time] staff were receiving their checks when they were supposed to,” Wellbank says. The publication claimed “that there was no actual ‘due date’ for payments,” in spite of Wellbank pointing out the net 30 terms in her contract.

One way to combat neglected payment is to “focus on relationships,” says David Hochman, a California-based freelance journalist and leader and founder of freelance journalism online group UPOD Academy. “Stay human, follow up, follow up again and you’ll get what you want. If not, get outside help.”

When he’s had problems, he has had success with checking with his direct report (editors) first and then talking directly to the accounting department. “In all my years, there was only one case where that didn’t work, so I had to bring in an outside person (it wasn’t a lawyer; it was someone from a writers union not unlike Freelancers Union). They wrote an email, and I got paid. I’ve always tried to have enough things going that I’m not waiting for one or two loose payments, so that’s motivating, too.”

Ghosting freelancers

Laurie Ulster, writer, copy editor and TV producer in New York City, received zero responses to the emails she sent requesting payment for completed work. 

Since there’s no possibility of running into your boss at the water cooler or break room for accountability, some publications across many industries stop responding to freelancers to whom they owe payment.

Ulster says it’s still hard to see that same editor reaching out to others on social media, looking for pitches, and hearing others talk about how great that editor is to work with. 

“I did the work, including revisions, and never got paid or even acknowledged. Dropped like a hot potato!”

Taking action and getting paid

Gritters teaches her freelance business owner clients these specific steps to prevent the struggles above:

  • Position yourself as a business owner, not a freelancer. This includes writing official contracts with clear terms and policies, and even creating a business handbook.
  • Ask a lawyer to write a letter— “[this] usually means you get paid literally the next day,” Gritters says. Some lawyers write these letters for free, and some law school students may have open office hours to help with this as well.
  • Be the freelancer who educates the company on how freelancers work and deserve to be paid. For this reason, Gritters frequently consults with companies to build their guidelines and policies for working with freelancers.

We need to “[hold] the whole [freelancer] industry at large to a higher standard,” she adds.

Photo by Andrey_Popov/Shutterstock



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