More about Sub-contracting

[qarunqb]

Hey all! 

This is my first post on the Upwork Community Forums. Recently, I've been getting more invitations to jobs on Upwork and I wanted to sub-contract the work out to others. I understand that sub-contracting is allowed on Upwork given that it's a fixed-price contract and the client is made aware of the sub-contractor. Here's a couple questions that I have:

• Do I need a Client account to sub-contract work?
• Do the sub-contractors have to be on Upwork?
• If the sub-contractor is not on Upwork, does this mean that the communication between myself and the sub-contractor happens outside of Upwork?
• If the sub-contracter is not on Upwork, does this mean that I have to find my own way of paying the sub-contractor outside of Upwork?

Additionally, if my intention is to outsource 50%-100% of the contract work to a sub-contractor, is an Agency a better fit for my current position? I'm not sure if I'm currently ready to be in an agency position.

Thanks in advance!

[PradeepH · Accepted solution]

Hello Qarun,

Thank you for your message.

I would like to note that Section 2.1 of our User Agreement speaks to subcontracting on fixed price contracts - "You further acknowledge, agree, and understand that...unless otherwise agreed with their Client, Freelancers may use subcontractors or employees to perform Freelancer Services by delegating work on fixed-price contracts or by agreeing with their Clients to have hourly contracts for Freelancer’s subcontractor(s) or employee(s)."

It's best practice for the client and the freelancer to discuss any terms and arrangements before the contract starts, including whether the freelancer is planning to subcontract and whether the client disallows subcontracting on the contract. Subcontracting can be done through Upwork or outside as long as the payment for the actual work is received from the Client through Upwork. You do not need to have a Client account if you are subcontracting outside of Upwork. You can communicate and pay your team for subcontracted work outside of Upwork. Please note that subcontracting is not allowed on Hourly contracts.

Alternatively, You may also try using our referral program where you can refer another Upwork Freelancer in case you are not available to take more work on your Upwork profile. You can refer to our announcement in the Community forum for more information.

Thank you.

Pradeep.

[oodannyboyoo]

My reading of Upwork's TOS says subcontracting is okay. Unless the client says no, you are entitled to sub contract without notice. You might have issues with client's that want a US based freelancer and are sub contracting outside the US. Even if you do not have any other agreement like an NDA, I would say that is poor business practice at best if you know a client does not want IP or confidential info being shared outside the US, it would be grounds for a lawsuit at worst if you have an IP/NDA agreement. Otherwise, Upwork allows subcontracting.

TOS 2.1 (viii) unless otherwise agreed with their Client, Freelancers may use subcontractors or employees to perform Freelancer Services by delegating work on fixed-price contracts or by agreeing with their Clients to have hourly contracts for Freelancer’s subcontractor(s) or employee(s);

https://www.lawinsider.com/dictionary/unless-otherwise-agreed

https://www.upwork.com/legal#purposeof

As far as payment, as long as you get paid through Upwork by your client you are okay, however, how you pay your subcontract depends largely with how you came to know that contractor. You are now the client and your sub contractor is the freelancer essentially. I do not see anything in Upwork's TOS that prohibits you subcontracting outside Upwork for work inside Upwork. Upwork just wants their cut from the pie from the first client. If you find a sub contractor through Upwork then they get the cut from the client-you as well as whatever you pay the subcontractor, as it will need to be paid through Upwork. Upwork has an opt out fee, but I doubt you would want to do that with either your client or subcontractor. Anything else is circumventing and is a violatation of TOS section 7.1