Hourly client is asking for refund after closing the contract

[#1]

I manually added time to a contract over a week ago for a client who sent an offer with a 40 hour limit for the week. The work was tedious and time consuming. All in all, it took me 38 hours to complete. A few days later, he responds saying that someone else did twice as much of the same work in only 6 hours and he didn't want to pay me that much and that we should work out a solution. I apologized and expressed my confusion that it took me over 12 times longer to complete the work, that I would show him my workflow, and could he share with me how much work the other person completed so that we could compare and find a reasonable compromise. He said he would, but never did. I asked twice, because we can't determine what "fair" is on my end if he is comparing me to someone else but not sharing the work that they did so we could compare. For all I know, this "other person" doesn't exist or only completed a fraction of the work that I did.

Ultimately, I am asking a moderator what to do since the hours were logged over a week ago, the client already closed a contract, and THEN they asked for a refund. There is no option to refuse the request, so do I just not respond? I can't afford for Upwork to just refund the money without my approval.

Please let me know!

[#2]

Hi Stephen,

Thank you for reaching out. If the hours were logged by the client last week, then this week is their review period where they can dispute the said hours.

Since they were logged manually, they will not qualify for Hourly Payment Protection if the client disputes them as they did not meet the criteria. We can only suggest that you communicate with the client at this point and use the Upwork Desktop App moving forward. You can read more about Hourly Payment Protection here.

[#3]

The hours were logged the week before last. The client didnt request a refund until 8 days after the week ended. So he is outside of the review period, right? 

[#4]

Yes, but according to the stories around here, that is frequently ignored.

[#5]

What I have read if it is manual than that can be disputed by client. So it is a better situation if prior approval is taken from client on logging manual hours. If client approves than this problem will never arise. Also what is harm in using upwork logging hours through desktop app. 

[#6]

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Sajal S wrote:

What I have read if it is manual than that can be disputed by client. So it is a better situation if prior approval is taken from client on logging manual hours. If client approves than this problem will never arise. Also what is harm in using upwork logging hours through desktop app. 

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Whoever told you this is wrong. The only protection you have on hourly is following the payment protection rules. As a matter of fact, hourly is the only contract form where you have any protection at all.

[#7]

I am sorry that you are experiencing this.

What you are describing is a client who is behaving in an unprofessional, unethical, immoral manner.

If the client hired you to work for him, and you logged time, then you should be paid for your time.

Did another freelancer do a similar task for less money?
Maybe yes. Maybe no.

But that is irrelevant.

Of course you should not agree to refund any money at all to this client.

If the client disputes your hours from the previous week, and you logged your time manually, then Upwork will remove those hours from the time that the client must pay for. If that happens, then it is still distasteful for the client to avoid paying you for your time. But the client will not be violating any Upwork rules.

If you don't get paid for some time because you used manual time and the client disputes your time, then that is your fault. You should have used the Upwork desktop time tracker in accordance with Upwork payment protection rules.

[#8]

Stephen,

Sometimes you simply can afford to give a refund if the option is to accept the pay and a lousy review at the same time.

In at least one scenario here, you find yourself in a lose-lose situation. It sounds like you have a choice between accepting a bad outcome or a lousy one. 

I took a client to mediation and then to arbitration once. It took several months and hours and hours of arguing back and forth to get through mediation, which clearly the client had no interest in making work. Arbitration was, thankfully, much quicker, but it cost $200 or so to have arbitration take on the case. 

Yes, I finally got the money I was owed, but it remains very difficult to justify. Looking back I would probably do it again, but that isn't to say it didn't come with a price. Lots of time lost and money sacraficed just to make a point. The money certainly becomes moot after so many hours of arguing with a narcissist who was pathologically unable to admit he'd made a mistake.

[#9]

The dispute, mediation and arbitration that Anthony describes does not apply to Stephen D's situation.

The contract that Anthony had in his example was a fixed-price contract. But the original poster's contract is an hourly contract.

To prevent the client from disputing all of the hours logged last week, the original poster could theoretically try to work out a deal with the client. However, if the client is already OFFICIALLY disputing the hours worked last week, and those hours were logged manually... Then there is nothing the freelancer can do other than to say "no" if asked to issue a refund. But like Jennifer points out, disputed manual time during the five-day review period is an "auto-win" for the client. He will simply need to learn from his mistake and not make the same mistake next time.

[#10]

Thanks, Preston. It was a fixed rate contract. I should stay away from TOS questions. It's not my area of expertise. 

[#11]

tsk tsk manual time. I've had this happen but used Tracker. Not sure what will happen since it's manual time. 

For the record, if you keep using manual time and they dispute within the review period, just know that they auto-win and you lose the time so probs need to be smarter about this.

[#12]

Assuming all time was manually entered, then you lose no matter what, just like Jennifer said. Via Upwork, anyways.

Depending the sum in dispute and depending on the laws of where you live/work and the laws of where your Client lives/works, you may be able to sue in court. If you ask Upwork for the contact information of your Client for the purposes of a lawsuit (and promise to pay Upwork their cut of the earnings), then Upwork says that they will provide it to you. But the ToS also say that they won't cooperate in general with non-Upwork processes without directive from a subpoena.

In my experience with a local client with whom I also had an Upwork contract after they refused to pay me for a previous contract, I successfully convinced them to pay for the previous contract by notifying them (and a couple of their advisors) of my intent to sue. They paid.

[#13]

re: "Depending the sum in dispute and depending on the laws of where you live/work and the laws of where your Client lives/works, you may be able to sue in court."

The math doesn't work out.

Taking someone to court will cost far more than 38 hours worth of work. And there is no guarantee that the freelancer would win.

But I note that your successful outcome was not a result of suing someone, but was a result of threatening to sue.

[#14]

The math doesn't work out.

Taking someone to court will cost far more than 38 hours worth of work.

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That entirely depends on the court and whether or not OP requires/wants a lawyer. States may prohibit, allow, or require lawyers for civil suit at various levels. I studied the process and fees pretty intensely, because I was preparing to file - I had even called a court to verify the exact district in which I needed to file. Filing fees and the fees for serving notice were low for me in North Texas.

And there is no guarantee that the freelancer would win.

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True. But there was also no guarantee they would get paid for this contract in the first place.

But I note that your successful outcome was not a result of suing someone, but was a result of threatening to sue.

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Yeah. But I had everything ready to go to court. And my recent win against the same client in arbitration for the Upwork contract, as well as the conversations that I had with their business advisors, convinced them that I would do it and most likely win.

[#15]

As a rule, threatening to sue isn't a very effective tactic. It's something frustrated people tend to yell when they're feeling powerless, and businesses and attorneys often have a good laugh over it before moving on with their lives. If you've put the demand together adequately (meaning demonstrated that you have a viable claim and know how to pursue it) that often changes.

[#16]

I have to agree with what Tiffany said you should not pull the sue card unless you are really prepared to follow through.  However do not back down.

[#17]

The hours were logged the week before last. The client didnt request a refund until 8 days after the week ended. So he is outside of the review period, right?

[#18]

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Stephen D wrote:

The hours were logged the week before last. The client didnt request a refund until 8 days after the week ended. So he is outside of the review period, right?

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Kinda curious how this works out. I've been through this but used Tracker so I just said "no refunds" even though it was such a pain to answer for a week. I knew I was covered by payment protection. I'm curious how this will work with manual hours. I would just go with "no refunds" and see what happens. At worst they tell you "too bad manual time" but you can't do anything else anyway other than tell them "nope, no refunds."

[#19]

I believe manual time is not covered under hourly protection. If a client disputes any hours you log in to your work diary such as manual time, will be refunded back to your client.

I suggest to use upwork desktop apps to log the effort as this will also give client confidence on the job done by the way of proof of work until the trust is established. I had the scenario where client himself asked me log the hours as trust was established. Please talk to your client and walk through and convince him on the effort that was requried for the quality job. 

[#20]

May be they needed it done in less hours / budget. Clients must convey all their expectations and limitations in the beginning. 

[#21]

A client may feel they have a "need" for less time or less budget.that does not change how hourly contracts work.

Hourly contracts mean you pay for all the time logged by the freelancer.

Your expectations or limitations don't change that.

If you can't afford to hire a freelancer, then don't hire the freelancer. If the hours being logged become too expensive, you need to end the contract.

[#22]

At this point, the funds will be paid to me within a day or two, so now my question is, if I get paid, clears my bank, etc., THEN the client disputes, hiw is Upwork supposed to refund him those funds? They pull my earnings from future contracts? That doesn't seem legal. Once the funds are released and in my account, it seems like Upwork wouldn't have a way to legally refund the client since he waited too long to dispute and I am already paid. 

[#23]

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Stephen D wrote:

At this point, the funds will be paid to me within a day or two, so now my question is, if I get paid, clears my bank, etc., THEN the client disputes, hiw is Upwork supposed to refund him those funds? They pull my earnings from future contracts? That doesn't seem legal. Once the funds are released and in my account, it seems like Upwork wouldn't have a way to legally refund the client since he waited too long to dispute and I am already paid. 

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Yes, they will put your account in the red just like any other chargeback. The money you earn will go towards the negative balance. Because the client did not dispute within the review period, I think you can just say no refunds but without payment protection he can file a chargeback. Since you used manual hours, you will lose if he files a chargeback. But that's getting too far ahead. Nothing like that might happen, so you can worry about it if it happens. 

eta: Just saw your edit. Yes, answer the mediator always until they say that the dispute is closed.

[#24]

I can assure you that this has nothing to do with "legal" or "illegal."

This is Upwork, not a court of law. What you should be concerned about is what Upwork allows, what it actually does, what it is physically capable of doing. Upwork does not operate according to my personal interpretation of some particular set of laws within some particular jurisdiction.

[#25]

But, of course, Upwork DOES operate according to the present court interpretation of various particular sets of laws, or is legally liable for failing to do so. 

It's weird that you persist in telling freelancers that it doesn't matter if things are legal. If your neighbor came to your house and stole all of your work equipment, would you shrug and say it had nothing to do with the law but what the thief chose to do, or would you expect to have your property returned since it had been taken illegally?