Freelancing is a fantastic way to make a living, but it does have its drawbacks -- like getting stiffed by clients. Maybe it’s even happened to you. Of course, your client is probably dealing with a professional or personal catastrophe of their own, so it’s important to be sensitive.
The good news is that if your client hasn’t paid up, you have several options. In 2017, New York adopted the “Freedom isn’t Free” Act (FIFA), which protects the rights of freelancers with contracts worth a total of $800 over a four-month period. Since then, a few other states and cities have worked to beef up their protections for independent contractors.
Here are some steps you can take immediately to recover your payment.
1. Deny access to the work you submitted
No pay? No access to work. For example, if you shared photos via Dropbox, you can remove the client from the shared file.
2. Write a collections letter
Fill out this boilerplate collections letter with an outline of the steps you plan to take to secure your payment, such as filing a claim in small claims court, reporting them to the Attorney General, and revoking the work you’ve completed.
3. Call them out on social media
Search the hashtag #FreelanceIsntFree on X for examples of freelancers who are mad as hell and not going to take it anymore.
4. Inform the Attorney General’s office
Attorney Generals are in charge of enforcing state laws and protecting consumers and upholding workplace rights. States vary in terms of what they can do for independent contractors, but it’s worth filing a complaint with your state’s AG office in case they see fit to intervene on your behalf.
5. Use a collection agency
For unpaid invoices of $50 and up, you can also consider turning your unpaid invoice over to a collection agency. Fees vary and can be as much as 50% of the total invoice, but many collection agencies don’t get paid unless they successfully collect.
6. File a claim in small claims court
You can also pursue unpaid invoices in small claims courts, where you do not need an attorney in order to file a claim. You can do it even if your client is in another state -- it just needs to be filed where you performed the work. Small claims courts have maximum amounts that vary by place. In New York City, the maximum you can file to collect in a city court is $10,000. It’s up to you to determine how much money is worth your time and effort. If the amount you want to collect is more than the maximum for your state’s small claims court, then you will need to seek the advice of an attorney to determine if you want to start a civil case.
7. Ask a lawyer to send a letter
If you end up hiring a lawyer, you can expect to pay a fee, although many attorneys offer a free initial counseling session.
8. Sue for theft of services
According to Aaron Deitsch, Esq., formerly an associate attorney at Romano Law, “a theft of services claim typically requires a showing of deception or other active wrongdoing on the part of the other side. A simple breach of contract or non-payment for services provided may not qualify. In those circumstances, you’d be better off suing for damages in small claims court or civil court.”
Stop chasing after late payments. Wingspan’s invoicing tool automatically follows up on late invoices, so you can focus on your work. Sign up for a free 30-day trial here.
You can freelance better:
How New Changes to the 1099-NEC Will Affect Contractors
How to Do Your Taxes as a Freelancer
What to Do When Your Client Suddenly Stops Paying You
---
*This information is not intended to provide, and should not be relied on for, tax or legal advice. Wingspan is not a bank. Banking services are provided by Lead Bank, Member FDIC. Deposits are FDIC-insured through Lead Bank, Member FDIC. The Wingspan Visa® Debit Card is issued by Lead Bank, Member FDIC, pursuant to a license from Visa USA Inc.Your funds are FDIC insured up to $250,000 through Lead Bank.; Member FDIC.
.jpg)
