It’s time to talk about late payment issues
We all know very well the benefits of working on your own terms, the freedom to travel to any part of the world, the comfort that comes from determining the working conditions yourself… Just as we see the good sides, we also see the difficulties of being a freelancer, and we want to discuss the problems of freelancers as we empower them.
Today freelancer community is massive. There are more than 20 million freelancers in the EU, making up 8% of the workforce in the region, and in the US, there are nearly 60 million freelancers, which make up about 35% of the workforce.* Today freelancers are driving the economy. These numbers are rapidly increasing, especially after the COVID-19 pandemic, and many businesses more readily accept that remote work.
Maybe you’d think it is too early to say ‘Freelancing is the future of work.’ However, we see that flexible working models and freelancers are rapidly being in demand internationally.
Unfortunately, we also see that the problems of this significant workforce are not yet widely discussed, and solutions are not developed yet. With remote work being widespread, the inequality between freelancers and employees on payroll is becoming significant. While unions and laws defend the rights of employees, unfortunately, freelancers’ rights are not protected at this level yet.
So what is the most significant pain point of freelancers?
Freelancers deal with late payments all the time, but it rarely gets talked about
We realized that the most significant pain point of freelancers is receiving their payments late. Therefore, we decided to profoundly research and understand this problem and create discussions and informative content for our audience.
Here are the striking results of our survey of more than 30,000 freelancers about the late payment issues.
The results of our research
The biggest problem of our freelance community is not getting their payments on time. It isn’t very encouraging for a freelancer to put in x hours for a project and not get his/her payment on time. But the real question to ask is: what do we do about it? To answer this question, first, we must understand the problem.
Here are some findings from the research we conducted with our freelancers about the late payment issue.
Freelancing is the only paying job for the majority of independent professionals
%63 of respondents said freelancing is their primary income, while 37 say they do freelancing as s side-gig.
%53 of the freelancers received their payments late 4 or more than 4 times in the last year
Freelancers do not have enough information about the legal regulations that empower them to receive their payments on time
Half of the independent professionals surveyed said they did not know the contract terms to guarantee paydays.
Freelancers do not seek their rights through legal means because they don’t want to damage their relations with their clients
The rate of those who think they can lose their freelance jobs, especially if they demand their delayed payments, is quite thought-provoking. What is more striking is that the rate of freelancers seeking their rights in court due to their late payment is only 3%.
Likewise, freelancers do not demand late payment fees not to damage their relations with their clients and not lose their jobs. While 40% say they do not request a late payment fee to protect their relationship with the clients, 25% say they do not know how to charge a late payment fee.
58% of the respondents stated that they had difficulty paying their monthly living expenses due to late payments
The rate of independent professionals who stated that they had difficulty paying their regular living expenses due to late payments was 58%.
In conclusion, we can say that the systems protecting freelancers have not been built yet and independent professionals trying to survive as individuals in a large economy see themselves as powerless and alone most of the time.
As one of the most ambitious players in this ecosystem, “how can we fix late payment issues for our users and other freelancers globally” is an important question that we are asking ourselves to take action in the future.
What do freelancers say on the late payment issue?
We have compiled some of the comments that you may find meaningful from our surveys. Let’s see if the stories they tell sound familiar to you.
-”A client accepted a big fee raise after I filed for legal action. I withdrew once they paid.”
-“I am waiting for late payment for more than 3 months now, my client contacted me for more freelance work and I will charge him extra for this new job =)”
-“This is when I had not been paid for the last 3 months (I do about 12 hrs a month for them, so its a regular gig, I’d been sending reminders and not had any answers so I went there in person and the boss basically turned around and shamed me for bringing it up to him. He actually shouted in my face.”
-“When I reminded my payment, the client told me “You’re the only one we work with that we have these issues with” (Not true, everyone who has worked with them has a least one, if not regular stories of late payments).”
-“Yeah, my current client always pays late every 1st week of the month. Sometimes 1st-week beginning or end. But I always chase my client to get the payment if it’s late. It is a game for us now.”
-“The majority of entities from Turkey never pay on time, I believe it’s a culture code they ought to follow. A few entities from the US paid late a couple of times, and they’ve always expressed their excuses and offered to pay either interest or do anything reasonable as a favor in return.”
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