Company stock for pay

[jeremiah-brown]

I haven't been here as long as some of you, but I have noticed quite a few posts from people who say "I can only afford to pay you with company stock"...or some variation thereof.

As far as I am aware, this is against Upwork's terms of service and is not allowed - please correct me if I am wrong.

Here's the problem with "stock" as compensation.  As a designer/design engineer, I design products for clients such that they can have these items manufactured and sold on the U.S. or global economy.  To do this, there needs to be an exchange of real money at some point.  Therefore, if I am designing the product to be sold and the person/company cannot afford to pay real money at this point, how are they going to pay to have the items manufactured and marketed for sale?  

I am so incredibly sick of "startups" and "child CEOs" who offer worthless stock as payment for real hours of work! 

[JoanneP]

Hi Jeremiah,

Before engaging a freelancer, we always encourage clients to set up their preferred billing method. Freelancers will be paid accordingly depending on their contract- Hourly or Fixed-priced. If you would like to report a job that is violating the Upwork ToS, please let us know by flagging the job, or sharing the link with us by sending a PM so that we can review and take appropriate actions. 

[dsmgdesign]

Ignore those job descriptions. By offering stock, Clients clearly don't know how the platform works, or they want you to take the job off Upwork.

Offering stock is simply not an option on Upwork..period. The client must pay you with real money, as set by the freelancer...not the client. Either you bid on fixed rates and propose your own milestone payment amounts, or you propose your hourly rate. Once the contract starts, that's what's on the table. Not stock. 

[jeremiah-brown]

This client is asking freelancers to perform 120 hours of work before they are even eligible for "stock as payment".  He has his listing showing $40.00-$100.00 hourly as a budget but when you read through the description it becomes clear that he has no intention of using actual money. 

In exchanging messages with client, I also asked if he was "willing to pay any money at all" to which he had responded "no, I would issue a percentage of my company" - aka, issue of stock.

I don't expect Upwork to catch these immediately, but I have reported it (several times) and it remains posted.  Just tired of seeing these startups posting jobs then horse trading worthless paper to unsuspecting freelancers.

[dsmgdesign]

It doesn't matter what he says in the job description or through the messenger. Once the contract starts with the client, he has no choice but to pay for work with real money, whether he is willing to or not. If he is expecting work without ever starting a contract on Upwork and expecting that work for free, that is a different matter. That is against the rules and should be reported. 

[jeremiah-brown]

I agree with you, with one exception - he should not be allowed to hire once he has stated in his description that he does not intend to pay with money.  I just settled a debt with a client who hired me then had no money to pay - took me 2 weeks to collect and was only able to collect when I threatened to send an invoice to their address.  Upwork promptly suspended my account for "billing outside of Upwork" - even though they told me there was nothing they could do to help me get paid, leaving me to collect on my own.

So when it comes to clients being able to knowingly hire without any way to pay, it does make me upset.

[a_lipsey]

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Jeremiah B wrote:

I agree with you, with one exception - he should not be allowed to hire once he has stated in his description that he does not intend to pay with money.  I just settled a debt with a client who hired me then had no money to pay - took me 2 weeks to collect and was only able to collect when I threatened to send an invoice to their address.  Upwork promptly suspended my account for "billing outside of Upwork" - even though they told me there was nothing they could do to help me get paid, leaving me to collect on my own.

So when it comes to clients being able to knowingly hire without any way to pay, it does make me upset.

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If the client is asking for free work (which they are in this case), then you should report the job. 

[jeremiah-brown]

I have, but the post remains up.  Here are a few snips:

**Edited for Community Guidelines**

[a_lipsey]

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Jeremiah B wrote:

I have, but the post remains up.  Here are a few snips:

**Edited for Community Guidelines**

---

Sigh...did they at least change any of the text? So annoying. 

[jeremiah-brown]

To make it short and concise, licensing involves making a deal with a manufacturer that they can use your product as a form of payment rather than paying them with liquid assets or even credit.

This job poster is trying to hire people to perform work for a promise of company stock that may or may not have any value, paid upon completion of 3 weeks worth of work...  Work which is the design of the product that he is going to take up to a manufacturer and try to secure licensure (manufacturer can use his item as the form of payment) so that he can once again skirt paying with actual currency or legal tender.

[wlyonsatl]

Even disregarding the fact that getting paid via company stock would be a violation of Upwork's Terms of Service by both the client and the freelancer, getting a mere piece of paper (if that) from a barely existing "company" you know nothing about has no measurable value to you now or in the future.

This wannabe corporate titan is playing at being player. Block him after you've reported him to Upwork.

[jeremiah-brown]

Evidently Upwork has censored my post which contained direct quotes from the job posting.

I mean, it's not like the job posting wasn't out there in the wide open public for all to see...  *sarcasms loudly*

[AleksandarD]

Hi Jeremiah,

Your post was edited as it was in violation of the Community Guidelines. 

I shared all the information with the rest of the team and appropriate actions will be taken according to our internal processes.

Thank you.

[jeremiah-brown]

I'm blown away that you're "editing" (CENSORING) my comment where I have quoted the job posting that is trying to pass off company stock (most likely worthless) as a form of payment.  I would think that Upwork would leave this stuff posted so that other members could read and learn to spot potential scams like this.  I didn't call out the user's name, nor did I quote or post any private messages from the "client".

I swear, Upwork is literally **bleep** for tat.  I try to collect from a dead beat client, there's Upwork slapping me with a "off-site payment violation" - even though I called your staff to ask if it would violate policy - I was told it would - so I did not invoice the client...  and you hit me with sanctions any way just for uttering the word "invoice"!

Now, you've censored me for quoting a publicly posted job.

[jeremiah-brown]

CENSORED AGAIN! 

T-I-T FOR TAT: is an English saying meaning "equivalent retaliation". It developed from "tip for tap", first used in 1558. It is also a highly effective strategy in game theory.

A T I T is also a bird - gasp!

Censor censor censor, violation violation violation....  

Don't worry, I won't be posting in here anymore.  

[wlyonsatl]

Every freelancer should run, not walk, away from any potential client who admits they have a limited budget for their project, not because any client should be expected to have unlimited funds but because the upfront admission is telegraphing the likelihood the client will at some point expand the scope of the project without expanding the total payment to the freelancer. The rationale will inevitably be something along the lines of, "I told you I had a limited budget, so please help me out and ...."

Some clients can rationalize whatever suits their needs. I just had a dispute with a client who ran out of money 3/4 of the way through the top end of the range of the number of hours I initially told her I estimated her project would require. She paused the contract while at the same time she also demanded a refund for 2/3 of the hours I properly booked using TimeTracker because - I kid you not - she said I didn't finish the project.

I hope a standup comedian eventually has a set that covers the stupid stuff a small fraction of Upwork clients do and say. There is a rich vein of material here and someone needs to put it to good use.

[prestonhunter]

Let's be realistic about this topic:

The original poster expressed concern about clients who are offering stock instead of payment.

Everybody agrees that it is not permissible to do that.

The truth of the matter is that this is very rare.

Clients rarely do that. Freelancers who are following the rules and using common sense know that it's not okay.

The original poster HAS NEVER actually participated in such a scheme. The original poster has not lost any time working for a client who offered this arrangement.

This isn't something that Upwork allows. Nobody here wants that to change.

Is there anything else left to discuss?

[wlyonsatl]

Preston,

In my experience, being offered very-likely-worthless company stock by a startup company to "pay" me for my work is not "very rare." I primarily work for startups and see or receive this sort of offer a few times a year.

I always tell the client that sort of payment arrangement is not possible under Upwork's rules. I can't remember ever hearing from such clients again.

[jeremiah-brown]

I have seen this type of compensation scheme offered at least 6-8 times (if not more) since I have been actively submitting proposals.  It may just be that it is more common in the new product development and product design arena - since this is ground zero for everyone's "game-changing" new business venture.

In either case, the hidden pitfalls of this type of "payment" didn't become obvious to me until I was trying to collect from a client who pulled a "design n' dash" on me.  After I reviewed the non-paying clients' business records through the secretary of state, I found that they had filed paperwork establishing a large number of corporations for themselves, complete with 10,000+ shares of stock (each).  After reviewing the person's LinkedIn profile and seeing that he was claiming to be a CEO, CTO, and a C-suite executive before graduating high school, it dawned on me that someone could actually hire me for services with a promise to pay, then instead offer payment via company stock when they suddenly came up short in liquid assets by feigning as "a new startup paying their dues".  In other words, some of these "startups" file the paperwork for the sole purpose of gaining access to and paying with monopoly money.

I don't disagree that it may be rare, but it seems to be pretty common at least in the line of work that I offer services for.

[wlyonsatl]

My 100 trillion dollar banknote from the Reserve Bank of Zimbabwe is worth more than any start-up's stock offered anonymously via the Internet, and I'm pretty sure the Zimbabweans lowered the value of the paper when they printed on it.

[jeremiah-brown]

Can I get that in 1's?

[jeremiah-brown]

Looks like he's back again, same job posting offering worthless stock for 120 hours of work.

[petra_r]

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Jeremiah B wrote:

Looks like he's back again, same job posting offering worthless stock for 120 hours of work.

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Flag it as inappropriate and move on.

[wlyonsatl]

In 1's?

Sure. Just have the local train company send three or four freight cars to our loading docks.

[florydev]

I see this a lot as a software developer but I am not sure what the issue is.  I go into the job and flag it as asking for payment outside of Upwork (which is what it is).  It is a violation of TOS.

Most of the time, it goes away.

At my most casual cruelishness I would say if people are dumb enough to work without pay then I say let them.