An extra five days after money has been released

[minihama]

Not that UpWork usually responds in any productive manner but I'm currently so frustrated that I want to bring something to everyone's attention.

I submitted my work for review 14 days ago and my client was on holidays, so he didn't respond to the request. After 14 days, UpWork closes the contract immediately..and....HOLDS ONTO THE MONEY FOR A FURTHER 5 DAYS?!

There's no real logic to holding onto money after a job has been finished anyway (aside from UpWork gaining interest on the money they hold - thankfully very little now) but holding onto it for a further 5 days after it's already been in escrow for 2 weeks?

It's completely unethical and to say that it's anything but UpWork cashing in when people need the money they've worked for is just patronizing.

[g_vasilevski]

Hi Michael,

I understand your frustration with this. The 5-days security period applies to all transactions on Upwork for safety and security reasons, and we are unable to shorten this period at the moment.

I can confirm that Upwork does not earn any interest on the funds during the security period. We will continue to explore and test ways to reduce the time it takes for freelancers to access their earnings. Thank you.

[minihama]

Goran,

It's not your fault. However...

Unfortunately, I can confirm that UpWork DOES earn interest on the money it holds. Confirmation of this is available (and explicit) on UpWork's annual report submitted to the SEC. I can quote from it if you wish. So you're incorrect, Goran.

Secondly, safety and security reasons? Do you have a rundown of what those might be? A terrorist plot that is foiled because UpWork held onto money for an extra five days? UpWork using the money to develop new cybersecurity measures?

Don't be silly Goran. What I said was true, and you've just answered like a robot, Try thinking for yourself.

[m_terrazas]

---

Michael M wrote:

Goran,

It's not your fault. However...

Unfortunately, I can confirm that UpWork DOES earn interest on the money it holds. Confirmation of this is available (and explicit) on UpWork's annual report submitted to the SEC. I can quote from it if you wish. So you're incorrect, Goran.

Secondly, safety and security reasons? Do you have a rundown of what those might be? A terrorist plot that is foiled because UpWork held onto money for an extra five days? UpWork using the money to develop new cybersecurity measures?

Don't be silly Goran. What I said was true, and you've just answered like a robot, Try thinking for yourself.

---

I'm really interested in the "quote", and in the original file link.
Can you post it?

Thank you

[minihama]

I'll post it in 5 days.

Safety and security reasons.

[carlosacb]

I was reading this post because I always have the same doubts... But this answer won the Internet! 

[wlyonsatl]

Michael,

According to Upwork's SEC filings since the company went public, the company consistently loses a lot of money each year to fraud. So doing what it takes to minimize losses to fraud is to be expected.

However, no one here knows exactly why Upwork tacks on an additional 5 days delay in payment for a completed milestone after already holding on to a client's escrow payment for 14 days.

As a person who for many years was paid to read SEC filings, I can tell you there is nothing I have come across in Upwork's filings that indicates Upwork receives interest on funds held in escrow. In fact, Upwork often has to borrow millions of dollars from one of its banks (and pay interest on those loans) in order to make payments due to freelancers while Upwork waits to receive payments from clients a few days later (to repay the loans).

I come to this board to learn, so I look forward to seeing your proof 14 days from now of Upwork's interest earned on escrow. 

[sm_shaheer]

I completely second you on this, decreased quality of service, unethical behavior and policies that only benefit upwork as an organization fostering more and more frustration among freelancers. And on the top of it, when you raise your concerns up in the community. The community guru, leaders all come togather and pin the fault on the person posted the limitation. Welcome to upwork community.

[ambroz]

Michel,

On regular jobs you often have to wait 30 days to get paid. 

For a normal job (with monthly payments), I get money on 18th day of a month for a previous month. It means, what I do on September 1st, will get paid on October 18th. And everyone survives.

I cannot understand why you are so frustrated here for this 5 days. Probably you didnt do job for hundered thousand dollars. 😛 

[minihama]

Thanks Ambroz. Very insightful.

Do you give seminars? I'll pay to attend to listen to your wisdom.

[sm_shaheer]

oh yeah, Michael! they also like to compare freelancing with regular jobs. And remind you that you should be grateful for having an amazing platform.

https://community.upwork.com/t5/Freelancers/Candidature-proposal-experience-Facts-suggestion-and-dis...

[tlsanders]

---

Syed Muhammad S wrote:
oh yeah, Michael! they also like to compare freelancing with regular jobs. And remind you that you should be grateful for having an amazing platform.

No matter how many times this bizarre claim is repeated, it won't become true. I have never seen  anyone use the word "grateful" (or any word that suggests the same) in connection with Upwork except freelancers who are complaining and for some strange reason lying that more successful freelancers tell them they should be grateful...even though, of course, we can all see the full discussion and see that no one has said any such thing.

[minihama]

More quotation marks. This place is like an epidemic of quotation marks.

[tlsanders]

---

Michael M wrote:
More quotation marks. This place is like an epidemic of quotation marks.

---

Quotation marks are the appropriate punctuation to use when quoting someone, which I was. I'm not inclined to abandon proper English usage because a stranger in a forum has an aversion to a punctuation mark.

[tlsanders]

So you've been on Upwork for at least a year and you never bothered to read how payment works? That's a pretty poor business decision.

I'm guessing you're the same guy who offered up this "proof" from the SEC report on Reddit, since this post and that are the only times I've ever seen anyone suggest that they knew Upwork was receiving interest on escrow funds. If I recall correctly, there was a massive leap of logic between what the entry on the report actually said and the conclusion you (or your doppleganger) drew.

[minihama]

I asked for a justifcation for the 5 day rule and didn't get one. I got "safety and security," Apparently, giving me money would be a safety or security breach. Again, I don't see how. Apparently, neither does Goran.

You don't know my reasons for being on Upwork. I don't know yours. Thanks.

Finally, I have never been on Reddit on my whole life. If you want the info you so desire, type "Upwork annual report" into Google. Then CTRL+F for "interest" and look at the results. In the management discussion, there is talk about the interest that Upwork receives from this money.

Feel free to look it up. And enjoy Reddit!

[tlsanders]

---

Michael M wrote:

I asked for a justifcation for the 5 day rule and didn't get one. I got "safety and security," Apparently, giving me money would be a safety or security breach. Again, I don't see how. Apparently, neither does Goran.

You don't know my reasons for being on Upwork. I don't know yours. Thanks.

Finally, I have never been on Reddit on my whole life. If you want the info you so desire, type "Upwork annual report" into Google. Then CTRL+F for "interest" and look at the results. In the management discussion, there is talk about the interest that Upwork receives from this money.

Feel free to look it up. And enjoy Reddit!

---

Interestingly, since you've never been on Reddit, you are making exactly the same flawed argument that person who isn't you made. I have, of course, viewed that report, and see no indication that the only possible thing Upwork could be earning interest on is the freelancer escrow account. Would you like to share how you reached that conclusion? 

[m_terrazas]

---

Michael M wrote:

I asked for a justifcation for the 5 day rule and didn't get one. I got "safety and security," Apparently, giving me money would be a safety or security breach. Again, I don't see how. Apparently, neither does Goran.

You don't know my reasons for being on Upwork. I don't know yours. Thanks.

Finally, I have never been on Reddit on my whole life. If you want the info you so desire, type "Upwork annual report" into Google. Then CTRL+F for "interest" and look at the results. In the management discussion, there is talk about the interest that Upwork receives from this money.

Feel free to look it up. And enjoy Reddit!

---

I have downloaded it and searched for it, but since my English is quite poor, I don't feel able to read all that!
So, if you don't mind, could you please add the text that refers to what you say?
And, if possible, not after 5 days (sarcasm?)
Thank you.

[tlsanders]

---

Michael M wrote:

I asked for a justifcation for the 5 day rule and didn't get one. I got "safety and security," Apparently, giving me money would be a safety or security breach. Again, I don't see how. Apparently, neither does Goran.

Well, those reports you reference clearly say that Upwork regularly experiences an escrow shortfall due to lag time in actually receiving processed payments (I imagine this is particularly an issue with international transactions, though I'm just guessing) and has to supplement the escrow accounts with its own operating funds to meet its legal obligations. Perhaps the security is for Upwork, in delaying until it can pay with the funds actually submitted by the client rather than paying out its own operating funds and hoping for the best.

[minihama]

That is a potential reason, yes. 

Thank you.

[colettelewis]

---

Michael M wrote:

That is a potential reason, yes. 

Thank you.

---

______________________

There is no "potential" reason. How it works on a fixed-price project is that you and the client agree a price at an agreed date. You do the work, submit it  and at the same time press the submit funds button. 

The client has the choice to pay immediately, ask for a revision, or to disappear. If the client disappears, the freelancer has to wait 14 days before Upwork automatically takes a hand and pays you, the freelancer, the amount due. After which, there is a 5-day security period before your funds are released to your account;

The five- day security applies at any time the funds are released. Upwork DOES NOT MAKE ANY INTEREST on funds in escrow. Upwork is not a bank.  

If you want to know more about security, then I suggest you take the trouble to read the small print. 

[minihama]

Nichola. I believe that is a potential reason (without inverted commas).

UpWork is not a bank. It is a corporation. It can earn interest on cash. I assume you know how corporations work? Maybe read the small print!

"Take the trouble to read the small print." Where is the small print which explains what the safety and security reasons are? Just because you drank the Kool Aid, doesn't mean everyone has to.

Thanks for your "help." 

[richardsmith94]

---

Michael M wrote:

Nichola. I believe that is a potential reason (without inverted commas).

UpWork is not a bank. It is a corporation. It can earn interest on cash. I assume you know how corporations work? Maybe read the small print!

"Take the trouble to read the small print." Where is the small print which explains what the safety and security reasons are? Just because you drank the Kool Aid, doesn't mean everyone has to.

Thanks for your "help." 

---

Hi Michael, you seem very angry (maybe you're not, but that's just the impression I get, which seems like a lot of wasted energy) and I'm not sure why, or why, with your 32 jobs in progress, this is such an issue for you?

People have given you explanations as to why your fees are held for five days, you've simply choosen not to accept them, or, without any proof, implied (I'm being generous here) that they're telling 'untruths'. 

Regardless, it makes no single jot of difference. This isn't your site, these are UpWork's TOS and you agreed to accept them by registering with it - on what basis are you complaining about TOS that your gave your full and implicit agreement to?

Life is very, very short and I won't be hanging around here for five days for your 'conclusive' evidence that UpWork is making money from held fees, so like you with your money, I'll just have to wait.

Ps, unlike you, because of UpWork's TOS you'll get your money, but I probably wont get the evidence you apparently have to validate your rant.

[minihama]

I really came up against the UpWork police today,

Thanks for your feedback as well. Richard. Again, very liberal use of inverted commas and personal remarks. Seems to be a trend on here.

I asked for a justification for keeping the money. One girl gave me a potential one and I thanked her for it. Then you came along to troll me (which is wasted energy, by the way).

The evidence, once more, is in the annual/quarterly reports, Richard.  It's not my job to send it to some lad on a message board who asks me to find it.

[richardsmith94]

---

Michael M wrote:

I really came up against the UpWork police today,

Thanks for your feedback as well. Richard. Again, very liberal use of inverted commas and personal remarks. Seems to be a trend on here.

I asked for a justification for keeping the money. One girl gave me a potential one and I thanked her for it. Then you came along to troll me (which is wasted energy, by the way).

The evidence, once more, is in the annual/quarterly reports, Richard.  It's not my job to send it to some lad on a message board who asks me to find it.

---

Again, look at the tone of tone of you own posts Michael, including your response to me. This 'lad' hasn't trolled you in any way shape or form, I've raised perfectly valid points in a perfectly civilized way, none of which you've chosen to address and with no evidence that UpWork is earning money off your held fees.

[wlyonsatl]

Yeah, Michael.

If you stick around here long enough you'll find a core cadre of defenders of Upwork (which I am sure can stick up for itself, but they want to help). They will have 20 questions for any poster who questions Upwork's policies (questions that often have little to do with the subject at hand).

And they will play Sherlock Holmes as best they can, spending more time ferreting out what information they can about you (or that they imagine applies to you) rather than providing meaningful and useful thoughts or responses.

Any successful company needs to listen to its customers - the best ones pay at least as much attention to complaints as they do to compliments. Upwork is not communicative in regards to "why we do what we do," so there are just some issues where we have to be happy with a "just because" response - or no response at all. That may be for good reason in some cases, but certainly not all.

Good luck with your future posts. 

[tlbp]

---

Will L wrote:

Yeah, Michael.

If you stick around here long enough you'll find a core cadre of defenders of Upwork (which I am sure can stick up for itself, but they want to help). They will have 20 questions for any poster who questions Upwork's policies (questions that often have little to do with the subject at hand).

And they will play Sherlock Holmes as best they can, spending more time ferreting out what information they can about you (or that they imagine applies to you) rather than providing meaningful and useful thoughts or responses.

Any successful company needs to listen to its customers - the best ones pay at least as much attention to complaints as they do to compliments. Upwork is not communicative in regards to "why we do what we do," so there are just some issues where we have to be happy with a "just because" response - or no response at all. That may be for good reason in some cases, but certainly not all.

Good luck with your future posts. 

---

The guy claimed that Upwork's SEC filing said it earned interest on escrowed funds. He deserves every question he gets. Liars and frauds suck. 

[kochubei_valeria]

Michael and others,

I'd like to reiterate the information Goran shared in his reply. Upwork doesn't earn interest on funds held in Escrow for a milestone or during the 5-day security period. The funds are held for 5 days before they can be withdrawn for safety and security reasons, and for security reasons we can't share more details about the process here in the public forum. 

That said, we have been testing ways to reduce the amount of time it takes for freelancers to access their earnings. If there are any changes, we will certainly announce them in the Community.

Finally, I'd like to use this opportunity to remind the participants of this thread to be mindful of the Community Guidelines and respectful toward each other even if your opinions differ.

[tlsanders]

---

Michael M wrote:

UpWork is not a bank. It is a corporation. It can earn interest on cash. I assume you know how corporations work? Maybe read the small print!

---

Corporations can, yes, but escrow agents cannot.

[minihama]

It's a fair point. Escrow agents cannot *always* earn interest on escrow
funds. But this doesn't exclude *some* escrow agents from doing so.

[colettelewis]

---

Michael M wrote:
It's a fair point. Escrow agents cannot *always* earn interest on escrow
funds. But this doesn't exclude *some* escrow agents from doing so.

---

______________________

I tell you what, instead of coming to a forum that clearly you think you are above, why don't you take this up with the people who actually run the company and who have their whole MO totally buttoned up legally?  

[wlyonsatl]

For anyone who claims a party who puts money into escrow cannot earn money on those funds, there are certainly situations in which interest is paid on escrowed funds:

https://www.srsacquiom.com/resources/taxation-of-interest-earned-on-the-escrow-actual-vs-imputed/

And in some states, banks are required to pay interest to homeowners on funds held in escrow:

https://www.frameworkhomeownership.org/blog/the-10-most-common-escrow-questions

"Here are the 15 states that do require lenders to pay interest on escrow accounts: Alaska, California, Connecticut, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Oregon, Rhode Island, Utah, Vermont, and Wisconsin."

So, no, there is no blanket prohibition against paying interest to people or companies who put funds into an escrow account.

This doesn't mean Upwork earns interest on escrowed funds. But it doesn't prove they absolutetly, without question couldn't because interest can't be earned on escrowed funds, as some here have claimed (repeatedly).

[tlsanders]

---

Will L wrote:

For anyone who claims a party who puts money into escrow cannot earn money on those funds, there are certainly situations in which interest is paid on escrowed funds:

But, of course, no one said that. If in fact you are a business advisor worth your rate, you should certainly understand the difference between a PARTY like a homeowner, who is the owner of the funds earning interest and the ESCROW AGENT, which has no ownership interest in the funds, earning interst on them.

[wlyonsatl]

Tiffany,

If you know any lawyers, you can ask them whether they are allowed to earn interest when they act as escrow agent for a transaction. It is my experience they do not typically earn any interest in this capacity, but that may not be universal. Or it may be a matter of legal ethics or other considerations.

At any rate, Upwork is not a law firm.

And you are mistaken when you say all escrow agents are forbidden to earn interest or otherwise invest funds they hold in escrow.

In Florida, for example, state law requires that an “escrow agent shall release and pay over the funds, or portions thereof, together with any interest accrued thereon or earned from investment of the funds...” to the actual owner of the funds

http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0651/Sections/0...

In plain English, in Florida escrow agents can earn interest from escrowed funds, but they have to pay it on to the actual owner of the funds at some point. There may be states where escrow agents are allowed to keep the interest or other income they receive using escrowed funds, but I will leave that to you to research.

The point is that at least some escrow agents ARE allowed to have such income, contrary to your claim otherwise.

Escrow related to consumer real estate transactions has its own rules in some states, but if you know of a law in any state relevant to Upwork that does not allow a corporate escrow agent to receive interest or investment returns on those funds, please post a link to that information here. That would put to rest the idea that a company acting as escrow agent for non-real estate purposes, such as Upwork, would be allowed to earn interest on escrowed funds they hold.

[gilbert-phyllis]

---

Will L wrote:

Tiffany,

If you know any lawyers, you can ask them whether they are allowed to earn interest when they act as escrow agent for a transaction. It is my experience they do not typically earn any interest in this capacity, but that may not be universal. Or it may be a matter of legal ethics or other considerations.

At any rate, Upwork is not a law firm.

And you are mistaken when you say all escrow agents are forbidden to earn interest or otherwise invest funds they hold in escrow.

In Florida, for example, state law requires that an “escrow agent shall release and pay over the funds, or portions thereof, together with any interest accrued thereon or earned from investment of the funds...” to the actual owner of the funds

http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0651/Sections/0...

In plain English, in Florida escrow agents can earn interest from escrowed funds, but they have to pay it on to the actual owner of the funds at some point. There may be states where escrow agents are allowed to keep the interest or other income they receive using escrowed funds, but I will leave that to you to research.

The point is that at least some escrow agents ARE allowed to have such income, contrary to your claim otherwise.

Escrow related to consumer real estate transactions has its own rules in some states, but if you know of a law in any state relevant to Upwork that does not allow a corporate escrow agent to receive interest or investment returns on those funds, please post a link to that information here. That would put to rest the idea that a company acting as escrow agent for non-real estate purposes, such as Upwork, would be allowed to earn interest on escrowed funds they hold.

---

Tiffany is a lawyer and I'm sure she knows a lot of them, and can answer your point about whether or not they can pocket interest that accrues on escrowed funds.

I am not a lawyer but I can appreciate a good p!ssing match from time to time, so I'll weigh in. In even plainer English: The Florida law is saying that an escrow agent can't hang onto interest that the owner of the escrowed funds earned during the escrow period. I guess you can claim that interest accrued to escrowed funds was earned by the agent controlling the funds, who then is required to pay the interest to the owner of the funds. But that seems to me like verbal acrobatics.

[wlyonsatl]

I'd like to say your post adds something to the conversation, Phyllis.

I'd like to, but I can't.

I have clearly said- more than once - I have seen no evidence that Upwork receives interest income on funds held in escrow at one of Upwork's banks.

However, Tiffany has gone further in saying Upwork, like all escrow agents, is not even allowed to earn interest on clients' or freelancers' escrowed funds.

Currently, the State of Florida says an escrow agent can earn interest but cannot keep it. Maybe this is now the law in Florida because escrow agents were previously keeping this income for themselves. And maybe escrow agents are allowed to keep this income in other jurisdiction. I don't know. And I don't care.

As a lawyer, it should be easy for Tiffany refer us to a statute or other written prohibition against corporate escrow agents, like Upwork, earning income on funds in escrow. Her keen legal research skills would put this question to rest.

[tlsanders]

You're right, Will. And, since I'm not offering legal services here, I will be happy to do that research for you at my standard writing rate of $105/hour (quite a bargain for legal research)....when my current deadlines are met at some point after September 12. In the meantime, I'll be using my "keen research skills" to do the work I've contracted to do.

[tlsanders]

---

Will L wrote:

Tiffany,

And you are mistaken when you say all escrow agents are forbidden to earn interest or otherwise invest funds they hold in escrow.

In Florida, for example, state law requires that an “escrow agent shall release and pay over the funds, or portions thereof, together with any interest accrued thereon or earned from investment of the funds...” to the actual owner of the funds

Will, you are making my point here. I can't tell whether you're attempting to mislead people who understand less about business and law or you are truly struggling with the fundamental issue here. As clearly stated in the statute you cite to try to disprove my point, the escrow agent can't keep the interest--it must be passed along to the actual owner of the funds.

As I explained in depth in another thread on another day, that would require Upwork to calculate the interest earned on each little $25 milestone across a five day period and to pay those pennies either to the freelancer or the client, depending on the terms. 

In the legal profession, most states by law claim the interest for some sort of public-interest program, because lawyers can neither keep the interest nor reasonably be expected to calculate it separately for each of their many clients and pay it out appropriately. Imagine how that would be magnified in a context like Upwork, where millions of transactions per year are involved and the escrow hold is only a few days.

ETA: Preemptively, before you waste any more time or further confuse the issue digging for statutes you don't understand, California law DOES provide for interest on mortgage escrow. That statute is specific to certain types of mortgage escrow, and (as in your example above) the interest is NOT retained by the escrow agent.

[wlyonsatl]

Tiffany,

On this thread yesterday at 2:46 PM you posted the following:

QUOTE

Michael M wrote:

UpWork is not a bank. It is a corporation. It can earn interest on cash. I assume you know how corporations work? Maybe read the small print!

Corporations can, yes, but escrow agents cannot.

UNQOUTE

So, which is it? Do you think an escrow agent is allowed to earn income on funds in escrow or not?

Or are you of the opinion now that an escrow agent actually can earn income on escrowed funds they hold but they can never keep that income for themselves, so in effect no escrow agent can earn net interest income on such funds?

Unlike Schrodinger’s cat, the rules as you understand them cannot say that escrow agents both can and cannot earn income on escrowed funds they hold for other parties.

At any rate, I'll leave you to it. It's been a slow couple of hours and I now have other things to do.

[petra_r]

---

Michael M wrote:

I asked for a justifcation for the 5 day rule and didn't get one. I got "safety and security," Apparently, giving me money would be a safety or security breach. Again, I don't see how.

---

You clearly lack the criminal energy to imagine all the ways the security period prevents or at least minimizes potentially huge losses through fraud on either the client-side, the freelancer side, or as a result of a collusion between the two. The biggest single such prevention I am personally aware of is to the tune of over $ 45.000

There are not just nice, honest and hardworking people on the internet and this platform, and without going into details (because there is no point giving criminal elements ideas) there are endless ways to use the site in ways that could lead to people losing a lot of money.

Clients (or more specifically, "owners of credit cards used") are generally, to a degree, protected as they may file a chargeback (meaning Upwork suffers the loss - double loss in fact - the money and the client) - so if illicit money lands in a freelancer's account and gets withdrawn straight away before anyone has a chance to prevent that from happening, that money is gone for good.

Just think how quickly a forged/hacked/stolen/used without permission credit card could be turned into hard cash at the click of a few buttons and literally in a matter of minutes....