My fellow destitute self-employed people take note: there is a petition up at gov.uk asking the government to create a law, similar to New York City’s Freelance Isn’t Free Act, which would “force employers to pay on time for freelance/contractual work.”
Don’t take this personally if you’ve signed it, but I need to provide three observations on it.
First, the wording of the title may have shot the effort in the foot. When you take a stance saying “employers should pay on time for freelance/contractual work,” you touch on one of the major economic issues of our time: who is an employer and who is an employee. As we all know, the digital economy is built on a series of fudges, loopholes, and knots which mean that you can work every waking minute for a company without ever being an employee. Yet the title of the petition portrays the problem as one of employer/employee relationships. Because of this wording, the only response any client company would have is “of course we pay employees on time!” The problem is contractor payments.
Second, by saying employers should “pay on time for freelance/contractual work”, the response from every late paying client is going to be, again, “of course we pay on time.” They pay on time by their rules. You can put whatever due date you want on an invoice. I have literally resorted to putting my own due date in all cap red letters. It doesn’t matter. If a client’s company policy is to settle invoices at day 30, 60, 90, or even longer away than that, they’re alright Jack. The beauty of the Freelance Isn’t Free Act was that it legislated a 30 day maximum for contracted freelance work that overrides a client company’s own payment terms. That is where any legislation needs to begin.
Third, keen readers of this blog may recall that there is a new UK government office – the Small Business Commissioner – which is supposed to be handling this very issue of late payment. Where is their voice in this issue? I wish I could tell you. Not only is the office of the Small Business Commissioner still in the planning phase over a year after being announced – in fact, it’s not even starting work until autumn 2017 – but it seems to have dropped off its own parent department’s radar.
(Cynical readers will note that we’ve managed to create a massive new Whitehall department in five months, but one office to support small businesses will have taken the better part of two years.)
One thing we don’t know is whether freelancers and the self-employed will have recourse to the office of the Small Business Commissioner at all. Its remit is to assist businesses with under 50 staff and a turnover of £10.2 million. A small business, in that regard, has in much in common with a self-employed freelancer as a corporation has in common with a small business. It would be truly galling if those who are the most vulnerable to late payment abuse are excluded from the remit of the one office which could make a difference.
But fear not, destitute freelancers, as there’s apparently an obvious solution until then: we all have to nerd harder:
“…following FSB pressure the UK government has decided to do something about it. Just last week, they announced their intentions to force large companies to publish details on how quickly they pay their suppliers. With that sort of transparency, firms will be able to make an informed decision about with whom to work. You might be able to manage your cashflow for that contract if you get paid in 30 days, but what if it was more likely to be three months…Further, what we really want is some tech start-up to learn about this development and spot the opportunity. Wouldn’t it be great if we could simplify the due diligence process, and firms could look up a Tripadvisor for payment practices?“
Jesus wept. The self-employed trying very, very, very hard to have a Christmas at all need help right now, and what they are getting instead is “why don’t you create an app where you can look up a large company’s payment terms!”
Is it any wonder a petition becomes the closest thing to hope you have?