Freelance writer documents accounts receivable nightmare

A freelance writer who was owed US$5,000 by several companies has documented her process of trying to get paid, which resulted in hiring a lawyer to write a demand letter and severing her relationship with one company.

Wudan Yan, a freelancer based in New York, had gone on vacation with an amount of US$5,000 owed to her by three companies, and a month later when she returned, none of the payments had been made. She had a payment of US$1,000 past due, a missing US$2,755 payment from a publication, and US$1,200 owed to her by another client.

The first company has a contract that explicitly states they would pay their contractors in 30 days. Wudan sent them a reminder and an invoice for a late payment fee of 20% of her payment, as they had not paid her within 30 days. They refused to pay the late payment fee of US$200.

The company later paid her the US$1,000 they owed her, but she had no luck with the late fee.

Wudan cited in an email to them New York’s Freelance Isn't Free Act (20-929), which stipulates that the hiring party must pay no later than 30 days after completion of the freelancer's services under the contract.

The company then relented and paid the late fee of US$200.

Unfortunately, the client that owed her US$2,755 was more difficult. The editor Wudan dealt with at the company claimed the company did not owe her money. Like before, she re-sent her invoice and a separate one for a 20% late fee of US$555 to the accounts department.

But even though the company said they would pay her for the job, they chose to quibble over the late fees, telling her to waive the late fee, propose a smaller fee, or a third option that doubled up as a threat: that they would pay in full with late fees but they would not hire her again.

Wudan replied by saying: “Not getting paid US$2,755 on time created an excessive financial burden. Because it didn’t resolve on the same time scales that I had to pay rent, credit cards and other bills, (the company) in essence took out a loan from me, while I accumulated interest. That “interest” is not something freelancers should shoulder on their own, hence the language I included in my late fee invoice: ‘I am now invoicing for the cost to follow-up with accounts payable departments on past due invoices, and floating the cost of payments to my vendors (who) specify payment terms in their contracts.’”

But she reduced the late fee to 15% from 20%, and received full payment within a month.

Her last client failed to reimburse her for travel expenses amounting to less than US$200 on time. But her editor at the company refused to pay the late fees. Wudan found a lawyer who writes letters of demand for freelancers, and sent in the letter. The legal counsel at the publication then agreed to pay her late fee.

Working as a freelancer for over five years, Wudan admitted that she has “fallen into a routine” where she expects to receive the equivalent of a ‘regular paycheck’ every month. When that does not happen, her “entire system breaks down” and it erodes her ability to focus on her work.

She said: “my goal here was not to name and shame any publications, but to show others how the industry writ large does not take these concerns from freelancers about late payment seriously, even when we try to hold them accountable. Some of these responses show that publications don’t even see contracts as terms that are legally binding. It seems that we aren’t taken seriously until we are relentlessly persistent, or pull out the big guns by finding a lawyer who can speak on our behalf.”