Nobody works as a freelancer because it’s easy. Maybe you do it for disposable income, or for the freedom to work on the projects you’re passionate about.
Freelancers enjoy the ability to work a more flexible schedule and exert control over where and how we work. But those privileges aren’t always awarded without compromises.
Between juggling clients, contracts, projects, and invoices, there’s often little time to think about the state of the contract you and your client agreed to and whether all parties are upholding their end of the bargain.
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Have you been misclassified as an independent contractor?
According to the Department of Professional Employees, the IRS estimates millions of contract workers are misclassified as 1099 workers when they are actually being treated as W-2 employees.
They also pointed to a Department of Labor study, conducted in 2000, that found “the percentage of audited employers with misclassified workers ranged from approximately 10 percent to 30 percent.”
So what does that mean for you? If you’re misclassified, that means you could be entitled to certain perks. Freelancers don’t enjoy the same luxuries as W-2-status employees, like protections under the DOL, company health care, and other benefits.
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It’s critical you know where you stand, especially if you want to maintain and make the most of your freelance status.
What to include in your contract
Want to ensure you’re being properly classified and treated as an independent contractor? Here is a simple checklist you can use to ensure your clients are indeed classifying you properly and you’re not simply being treated like an employee — sans perks and benefits.
This checklist can also help you clarify your terms of employment when you renegotiate your contract, and it can help you realize and prevent any misunderstandings with future clients.
Essentially, you’ll need to check that you have control of how, when, and where you work, and that you are economically independent of your clients.
- The majority of the work I do is performed with the tools of my choice.
In your contract, name the specific tools and programs you will use to get the job done. And state you reserve the right to use your tools over what the client suggests, so long as the work is being completed to their standards.
- The majority of the work I do is performed where I want.
You should not be required to be on-site at your clients’ place of business a majority of the time. Make it clear in your contract that you will work at the location of your choosing whenever possible.
- I set my own schedule.
Clarify in the contract the hours you work are completely up to you. If you have specific times that you will be available to your clients, make those times known. Or make your schedule flexible but include when check-ins, milestones, and deadlines will be met, in your agreement.
- I reserve the right to do work for other organizations.
Your agreement should include a section about your rights to do work outside the work you do for your client, even if that work is in your client’s niche or industry. Many freelancers manage work for several clients at once, so make sure your clients understand they cannot prohibit you from those activities. Your client may ask you to sign a non-disclosure agreement but shouldn’t ask any independent contractor to agree to a non-compete clause.
- I claim the rights and royalties for the work I do outside my contract.
Your client might need to claim the rights and royalties for the work you do on their projects, but outside of the contract, your work is your work. Make sure you include a section that protects your rights and royalties and keeps you and your client clear of misclassification.
If you love freelancing and aren’t ready to go back to the life of a traditional employee — assuming you ever were one — you must be prepared to have tough talks with clients to make sure the terms of your contract are being met.
If you’re just starting out as a freelancer, or if you’re thinking about revisiting existing contracts, take into consideration your needs to make sure you’re working with your, and your clients’ best interests in mind.
Most importantly, freelancers who value the nature of independent work should be extra aware of how they’re classified, and that means negotiating client contracts, in a way that helps you maintain your freelance freedom.
Let me know your thoughts in the comments.
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