Freelancers working for free???
Unpaid wages might be a new term with most full-time employees; however, independent workers or freelancers can become quite familiar with this problem. The questions are why unpaid wages are widespread for freelancers in foreign countries in general and in Vietnam in specific and how freelancers would deal with clients who fail to pay for them or delay their payment. This article will mention the payment troubles of freelancers and their ways of dealing with this type of clients.
According to Gunsch (2008), freelancers or independent workers are people who are self-employed, which means they work independently and are not managed by any business or employers. Most freelancers work in creative and production fields like writing, design, graphic arts or IT programming. Freelancers have more chances to choose their own work schedule and sometimes earn more money than full-time employees; however, they might be less stable and have less benefits as well as incentive policies from the companies.
Today, there is a growing trend that hiring firms depend on more freelancers rather than traditional full-time employees because freelancers are the one who work across all majors, it could be more flexible for clients to work with freelancers on short-term projects. Moreover, freelancers are not locked in the offices during 8-9 hours per day, they can work anytime or anywhere they want so they can add more creativity and unlock innovation for the clients, working more effectively (Freelancers Union 2011). Although freelancers sell their work and put their strong efforts on projects, some of them gain nothing from the clients. Clients will have many reasons to refuse paying for freelancers or delay their payment as long as possible. In contrast, during a lecture on 3 April 2012 for COMM 2384 Client Management at RMIT University, Saigon, the lecturer, Melanie Casul, said that agencies have “rules of engagement” from the beginning and clear budgets setting with clients. Agencies will revisit the program and review the billing procedures to not only fulfill the tasks but also guarantee the payment after every project.
To support the article, I conducted an interview with Mr. Tran Manh Cuong who is now a Creative Head of CLIMAXX INTERACTIVE Agency, Ho Chi Minh City. He has also been a freelance copywriter for over four years. I had a great discussion with him about this topic; especially, he also revealed that he used to face this trouble when he just graduated from university and started his career and he was really shocked because he thought that his big client were deceiving him.
“I was really shocked for my first experience of being deceiving by a big client”
According to Freelancers Union (2011), in the United States, failing to pay money and delaying the payment might become a challenge for independent workers because labor laws will not protect them from this freelance working style. While, the state’s Department of Labor will help traditional full-time employees collect their money if they suffer from this kind of violation. With fully-written contract, it is possible for freelancers to hire an attorney and take their clients to the court. Nevertheless, this will cost them an amount of money. They will not have enough money and time to chase client nonpayment. Moreover, this is not worth the trouble.
Similarly, Cuong also shared “In Vietnam, some freelancers are unable to pursue their unpaid wages because they cannot waste their ‘precious time’ that they should spend on another job instead to earn for living”. They do not want to sue their clients either because this can affect their relationships as well as their reputation with these potential clients later. He stressed that “Many freelancers usually look for projects from their friends or close relationships so they tend to believe their clients and make their strong attempt beyond doubt”. Hence, many of them do not officially sign contracts with clients nor have a clear budget commitment with clients, which might be disadvantaged for freelancers to collect money.
How to handle with clients who refuse to pay
Fishman (2011) mentioned that firstly, when clients do not pay on time, freelancers should act quickly and call them as soon as possible because the longer clients fail to pay, the less likely you are paid. During the first call with clients, freelancers should be aware that they are talking with an appropriate person who is in charge of account and pricing. Freelancers also need to politely mention how much the clients owe them, avoid fighting with the clients or they will not get full payment. Especially, no matter how angry freelancers are, they should not try to harass or threaten their clients by repeatedly calling or using violence because clients might sue you for this kind of harassment. After some calls and reminders, if clients’ decisions unchanged, freelancers must decide whether they continue or not. If the clients are unable to pay them anything, they should give up because there is no point in chasing those clients. If the clients can pay but do not want to or delay the payment, freelancers should take a legal action. They will send a ‘final demand letter’ as a warning that they will sue their clients if they do not pay money back on time. This letter actually works with some clients. However, in the worst scenario, the freelancers have to hire a collection agency to assist them to collect debts. Freelancers do not have to pay for this type of agency but the agency will take a part of the money it can collect. More importantly, before hiring agencies, freelancers should guarantee that the debt is worth the suing and they will not work for those clients again; moreover, the contract should be clear and support their rights.
Reproduced from: Thomas 2012
Cuong also shared his ideas about how to deal with clients who fail to pay debts. In Vietnam, what most freelancers can do is just calling and reminding their clients, they are less likely to take legal action. He also mentioned a way that might be often used in advertising industry in Vietnam, which is using media or creating a scandal to damage the clients’ reputations and images. “When the clients insist not paying the debts, some freelancers might write an online article and spread them widely the Internet, warning other workers in the network to avoid these clients”. This way might be ineffective and even bad for both parties but at least, it can help some independent workers avoid this situation.
To conclude, nonpayment or delaying the payment might be a familiar term to freelancers/independent workers. It is quite hard for them to spend most of their time and money on chasing their clients and collecting the money. They put their strong efforts on projects but they gain nothing. It is important for them to know how to deal with these clients. They can call, write letters and hire an agency to help them but they should not harass or threaten their clients or this will affect their career later. Facing the trouble will be a lesson for freelancers and it will give them more experiences in order to work with clients more effectively in the future.
Ho Chi Minh City, 11 May 2012
Posted by Pham Linh Chi
Word Count: 1,210
About: Tran Manh Cuong is now a Creative Head of CLIMAXX INTERACTIVE Agency. He used to work for LOWE and EDGE Marketing Company as a copywriter before. He has also been a freelance copywriter for over 4 years. CLIMAXX is a full-service interactive agency specialized in digital marketing. Agency’s big clients are now SAMSUNG, PEPSI, FRISO and CASTROL.
Casul, M 2012, ‘Setting Budgets and Managing Client Expectations’, lecture in COMM2384 Client Management, 3 April, RMIT University, Saigon South Campus, viewed 4 May 2012, Blackboard@RMIT.
Fishman, S 2011, Working for yourself: Law & Taxes for Independent Contractors, Freelancers and Consultants, 8th edn, Delta Printing Solution, California.
Freelancers Union 2011, ‘Independent Workforce Issue Brief: Unpaid Wages’, FreelancersUnion, viewed 4 May 2012, <http://www.freelancersunion.org/political-action/policy-resources.html>.
Gunsch, J 2008, ‘What is a freelancer?’ wiseGEEK, viewed 4 May 2012, <http://www.wisegeek.com/what-is-a-freelancer.htm>.
Ngoc Truong, 2012, ‘Nhung nguoi lao dong tu do’ (freelancers), Baomoi, 31 April, viewed 4 May 2012, <http://www.baomoi.com/Nhung-nguoi-lao-dong-tu-do/47/3592399.epi>.
Thomas, D 2012, ‘What do I do when my client will not pay up?’, image, Freelanceswitch, 12 January, viewed 4 May 2012, < http://freelanceswitch.com/the-business-of-freelancing/client-will-not-pay-up/>.
Tran, M.C 2012, interview, 19 April.