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feed_my_eyes
Member

Client asking for work below legal minimum wage

I know that clients with extremely low budgets are nothing new on Upwork, but what if a client is actually seeking a someone to work as their full-time employee (not a freelance contractor) and offering to pay 1/10th of the legal minimum hourly wage in their country? Shouldn't this be illegal? How do employers get away with this?

24 REPLIES 24
babzward
Member

Hiring for a full-time job at less than minimum wage is illegal. But there are people who will do it without realizing it's illegal, or without caring. AFAIK this isn't the right place to post full-time jobs anyway - it's a freelancing site. (And, as freelance, it's not technically subjected to minimum wage laws, as far as I know.)

- Barbara Herrera -

That's my point - how can it be considered a freelancing job if they want a someone to work 40 hours per week, every week, on a permanent basis? Therefore shouldn't they have to pay legal minimum wage in the country in which they're located? (Sweatshops in third world countries pay more than the amount that they're offering, BTW.) Upwork should have a moral and ethical obligation to report them to the local authorities.

You are correct, Christine, but not for the reasons you state. A regular, full-time, 40-hour-per week engagement is almost always a job (at least, as defined by U.S. law). The key legal issue there isn't minimum wage (though the company could also be liable for that), but that the company is evading its tax obligations by wilfully mischaracterizing employees as independent contractors. The IRS takes that very seriously.

 

It's in no way Upwork's responsibility (or right) to screen every job posting and make the nuanced legal assessment as to where those lines are, though. If you see a posting that you believe violates the law, you're free to report it to the appropriate authorities. 

tlsanders
Member

Barbara is correct. You are not an employee--you are a business, and as such can choose to sell your services at any rate you choose. If the rate is too low, don't accept.

 

They get away with it because they are not employers, which is sort of the whole point of freelancing--running yoru own business versus being an employee. There is no law setting a minimum payment for independent contractors.

 

In any case, this is a global platform serving people whose minimum hourly wages for employment range from twenty cents per hour or less to $15/hour or more.

See response above. I don't think a company should be here seeking full time permanent help and then getting off on a technicality by claiming that they're hiring a "freelancer". If you want someone to work 40 hours per week on an indefinite basis, then in what way are they NOT your employee? And if it's possible to get around offering minimum wage on a technicality, then what's to stop every employer from calling their employees "freelancers" and paying them slave wages?

re: "Client asking for work below legal minimum wage"

 

The "L word" is not appropriate to this discussion. This is Upwork. This is freelancing.

 

This is not about employees working in whatever local jurisdiction you happen to live in.

Respectfully, Christine:

 

If you don't like the law, you should talk to your representatives and encourage them to change the law.

 

But Upwork is following the law.

 

Many of us are thankful that laws are not so restrictive that they dictate every aspect of how people do business.

 

There are many people around the world who work in different types of economies. Some of the jobs you are seeing are not interesting to you, but they are extremely welcome to other people.

re: "In any case, this is a global platform serving people whose minimum hourly wages for employment range from twenty cents per hour or less to $15/hour or more"

 

Some of the world's most prosperous and successful countries have no legally-dictated minimum wage at all.


@Preston H wrote:

 

Some of the world's most prosperous and successful countries have no legally-dictated minimum wage at all.


Prosperous and successful has to be defined within this context. Those countries may be prosperous and successful for everybody except for the workers. 🙂

 

Other than that, while I generally don't agree with people speaking about minimum wages in the context of freelancing, I have to admit that I'm with the OP on this one. Full time and exclusive work for one company is not freelancing but employment.

 

I'm not for a world of freelancers, especially when the freelancers are employees in disguise as a means to avoid taxes and benefits.

 

I also admit that it is not Upwork's role to be involved with this. But the problem is real.

-----------
"Where darkness shines like dazzling light"   —William Ashbless

Respectfully, Preston, I think you've missed the point of what I'm saying. I understand perfectly well how freelancing works, having been a freelancer myself for over 17 years. What I'm saying is that this particular project does not fit the definition of freelancing. Unfortunately the rules governing this forum prevent me from giving more details than that. 

 

BTW, far from finding employment regulations "restrictive", I'm very grateful to live in a country that has laws to prevent its workers from being exploited.

 

kochubei_valeria
Community Manager
Community Manager

Christine,

 

There is a minimum hourly rate of $3/hour on Upwork. With some exceptions relationships between clients and freelancers on Upwork can't be classified as employer-employee relationship and therefore minimum wage laws don't apply to those relationships. Please, refer to article 8.7 of the User Agreement for more information.

~ Valeria
Upwork

Valeria, based on what Christine has described, the job in question very likely cannot be legally classified as freelancing in the U.S. 

 

Does Upwork  have any policies/procedures relating to that issue?

 

I'm not suggesting that's Upwork's responsibility...just want to know whether there is an internal process for addressing the issue.

Tiffany,

 

If the client determines that their relationship with a US-based freelancer they are planning to hire is better classified as employer-employee relationship, they can use Upwork Payroll Service.

~ Valeria
Upwork


@Valeria K wrote:

Tiffany,

 

If the client determines that their relationship with a US-based freelancer they are planning to hire is better classified as employer-employee relationship, they can use Upwork Payroll Service.


 What I was asking about was whether Upwork had any position/policy on clients illegally classifying relationships as freelancing when those relationships are defined by U.S. law as employment relationships and the misclassification violates the Internal Revenue Code.

 

I realize the answer may be "no," and I think that would be fine, but it would be good to know whether that's an Upwork issue or one the freelancer would need to address directly with the IRS or DOL.

Thanks for your reponse Valeria. This client is offering full-time employment to applicants for $1.50 per hour, so it does seem as though it's against Upwork's TOS? I tried to report the proposal but there was no option in the drop-down list that really applied to the situation.


@Christine A wrote:

Thanks for your reponse Valeria. This client is offering full-time employment to applicants for $1.50 per hour, so it does seem as though it's against Upwork's TOS? I tried to report the proposal but there was no option in the drop-down list that really applied to the situation.


When I see jobs like that that offer what looks like full time employment, or others that require a freelancer to work in the client's office, I usually flag them as "requesting to work outside of Upwork." It's not 100% accurate but it's close...

 

One would hope that cheap clients like that wouldn't get many applicants, but there's nothing preventing them from asking. Though how are they getting around the already ridiculously low $3/hour in their posting?

They're getting around it by posting it as a fixed price project, but then specifying in the description that this is the monthly fee for 40 hours of work per week. It seems to be a bit of a flaw in the system.

Christine,

 

Could you please click on my name next to this post and send me the link to the post in a private message?

 

Thanks!

~ Valeria
Upwork

Thanks very much Valeria - I've just emailed you.

re: "They're getting around it by posting it as a fixed price project, but then specifying in the description that this is the monthly fee for 40 hours of work per week. It seems to be a bit of a flaw in the system."

 

You're right.

 

It is never appropriate to try to mix the fixed-price contract model with the hourly contract model. These are two separate things.

 

As a practical matter, there may be no practical way to completely prevent a client and freelancer from willfully using the Upwork interface to enter into an arrangement that does so, which is essentially an attempt to circumvent the system.

 

But it is right to report jobs such as this as inappropriate.

 

And it is pretty much never a good idea for any freelancer to agree to a job in which a client asks her to do something that combines fixed-price with hourly contract concepts.

tlsanders
Member

Christine, I'm sorry we made it so difficult for you to communicate your issue here. There have been so many threads about why clients aren't required to follow minimum wage laws that I'm afraid the reaction has become a bit programmed. 

Thanks Tiffany. I usually just ignore dodgy clients and low-priced projects and get on with my work, but this particular case seemed so very wrong and deliberately unethical that I couldn't just let it go. It seems like there ought to be SOME standards around here! Here's hoping that Valeria can sort it out.

sabine_s
Member

I found this thread, too, because I saw several posting that ARE illegal for Germany, i.e. -- looking for someone more than 20 hours / week on a permanent basis with a permanent contract; payed hourly, working in Germany, IS illegal below minimum wage, because we have laws against working for one customer only but as a freelancer, one would HAVE TO become an employee. 
But people want to have German people (living there) working for them at Asian rates ... that IS illegal. 

(On the other hand, when I post a small one time freelance job as someone from a Western country, I get offers from people from India for 1/2 work at a rate which would feed their whole family 1 month in their country!!)

I really wonder which legal framework / laws apply to UpWork.

I have had almost bad experiences on this platform only. Also for highly qualified work for people from Western countries, who want to pay lower rates than they would usually get. 
I had offered 1/2 !! of my usual rate to a potential client in Australia, and for an EXTREMELY short turnover time - 2 days instead of 5 days when using a common calculation method. Still was too expensive, he said. 

?! 
So, clients accept not so good work from people without experience instead of from experts with experience who get the job done well and fast .... or think that because of books as the "4 hour work week" + stupid inexperienced non-expert !! "digtial nomads" EVERYTHING is to be had from any freelancer nowadays waaay below normal rates? 

So, yes, for "normal" Western freelancers it is just a complete waste of time. 

There are exceptions, yes. But even then the workflow via Upwork is questionable.

I think that it's illegal to hire someone on a permanent basis for below minimum wage in countries in which such laws apply, regardless of whether it's through a freelance platform or not. BUT, you have to catch them first, and Upwork protects the client's identity so that makes it impossible. But I should think that it would be in Upwork's best interests to ban such projects, because once the person starts working in the client's office, they'll definitely circumvent paying the 20% fee (and won't care if they're banned, since they'll have a full-time job anyway). Did you report these projects?

 

As for the rest of your post, I'm afraid that it's a waste of time to get upset about low pay on Upwork in general. Some people are willing to work for shockingly low amounts of money (even in America), and others are happy to exploit that - there's nothing we can do about it, unfortunately. I just filter out projects that display the "$" or "$$" symbols when I'm doing a job search.