How Freelancers Can Get Paid: 6 Simple Steps
April 2, 2024
How freelancers can get paid is one of the biggest challenges in the gig economy. You’re not alone. Over 50% of freelancers report missed payments, and 74% say they’ve experienced delays in their payments. Without HR or payroll departments, chasing down invoices becomes part of the job. But you’re not powerless – these six clear steps will guide you through resolving non-payment issues professionally and effectively.
Step 1 – Gather Your Payment Evidence
Collect all relevant invoices, emails, texts, and other paperwork related to the work you did and the compensation promised. This evidence will be crucial in proving your case if you need to escalate the matter. Deal Memos are the ideal piece of evidence as they show executed and approved rates, days of work, terms of payment, etc.
Step 2 – Contact the Client Who Owes You
Send the person or company who owes you payment another copy of your invoice, with a reminder that the payment is past due. Include how many days it’s late. If you got paid for the wrong amount, resend the invoice and explain the discrepancy.
Be sure to communicate with the appropriate individual. For example, if you’re a PA, it may be better to first speak with your department head rather than going directly to a Producer.
Step 3 – Set Payment Reminders
Sometimes, one payment reminder isn’t enough. If you don’t hear back after the first email, continue to reach out with reminders. Be persistent. At the very least, send a reminder when the payment is:
- 30 days late
- 60 days late
There is a correlation between payment reminder emails and timing of the payment. Typically, after the second reminder… they will make a payment a few minutes after that email. If emailing doesn’t work, don’t forget the power of a phone call. You may have more luck reaching a resolution on the phone.
Step 4 – Enforce a Late Fee Policy
If your client is repeatedly late with payment, let them know you’re implementing a late fee policy. A 1% to 5% fee usually nips the problem in the bud and sets the tone for future payments. And you can always remove the late fee as an incentive for prompt payment.
Step 5 – File in Small Claims Court
If your emails/calls go unanswered, or if the Producer does get back to you and refuses to pay, you can file a lawsuit in small claims court for breach of contract.
Note… small claims courts only deal with cases below a certain value. In Colorado, individuals can only go to small claims if their lawsuit is under $7,500. In California, the maximum amount is $10,000.
Step 6 – Take Legal Action in Civil Court
If the amount owed is larger than small claims court limits, or if you are experiencing ongoing issues with the Producer, you may need to pursue civil action. But before initiating any legal proceedings, consult an entertainment lawyer. They can advise you on your legal options and help you take further action if necessary. Keep in mind that legal battles can be costly, so you’ll need to weigh the potential benefits against the risks.
Sometimes, the only thing to do is to walk away from a bad client. But depending on the state of your finances, that can be hard to do. Weigh the cost of the decision, financially and in peace of mind. You might find it allows for better opportunities to come your way.
When to Walk Away from a Freelance Client Who Won’t Pay
Sometimes, despite your best efforts, a client still refuses to pay. At that point, it’s important to ask whether the time, stress, and potential legal costs are worth the effort. If the unpaid amount is relatively small, or if the client has a track record of being difficult, it may be wiser to walk away and cut your losses. Protect your mental health, free up your time for better-paying opportunities, and learn from the experience. Walking away doesn’t mean giving up… it means choosing clients who value your work and treat you with respect.