Upwork's Role in Payments to Freelancers

[wlyonsatl]

There seems to be a lot of misunderstanding and misinformation on this board about Upwork’s role in seeing that timely and full payment is made between the freelancer who has performed work as agreed that has been delivered to the client.

It is a major violation of Upwork’s rules for a freelancer to receive payment directly from a client. As a result, the freelancer is entirely reliant upon Upwork ensuring client payments due. Upwork specifically ensures full and timely payment to the freelancer under both hourly and fixed-price contracts, which is a big part of the reason at least some freelancers use Upwork in the first place.

In order for this arrangement to work, Upwork – not the freelancer - takes full responsibility for collecting payments from clients and Upwork alone accepts the risk that a client won’t pay for work completed by a freelancer as agreed. This is one of the reasons Upwork takes its large fee (usually 20%) from each payment to any freelancer, which is income that offsets Upwork’s losses on non-payment by some clients.

Freelancers pay this handsome fee as a form of insurance that they’ll get paid for work performed, so there is no reason a freelancer who has competed work as agreed should not always and without exception be paid within the timeframes defined by Upwork in its hourly and fixed-price contract payment rules. Regardless whether the client pays Upwork, if the freelancer performs and delivers the work product agreed with the client then Upwork has contractually agreed it will pay the freelancer.

Since the client isn’t even allowed by Upwork to pay the freelancer directly, Upwork has set itself up as solely responsible for both sides of such payments. Collecting full and timely payment from clients to Upwork is entirely Upwork’s, not the freelancer’s, role and problem. These are the rules Upwork has set up and are the rules Upwork, clients and freelancers have all agreed to abide by.

If Upwork doesn’t receive full or timely payment from a client, that is entirely Upwork’s problem to solve. Any such problem does not entitle Upwork to deny full payment to the freelancer according to Upwork’s own payment timelines.

Have I gotten any of this wrong?

[tlsanders]

Will, it seems as if you very much need to read what the TOS actually says about escrow, payment guarantee, chargebacks, fraud, and more.

[wlyonsatl]

Well, Tiffany, please enlighten us all.

Where did I get it wrong?

[wlyonsatl]

For example, here on the Upwork Web site we are told (notice the use of the words "ensure" and "ensures":

Working safely

Fixed-price protection

Projects funded with escrow ensure that your work is funded before you even begin working on your client’s milestones.

Hourly payment protection

Make sure an hour worked is an hour paid. As outlined in Upwork’s hourly escrow instructions, our Work Diary ensures that freelancers logging hourly time using the Upwork Team App are paid for hours worked.

[wlyonsatl]

One limited exception for Upwork being responsible for payment to freelancers can be found in the Terms of Service, Hourly, Bonus, and Expense Payment Agreement with Escrow Instructions, Section 6, which says,

"Client must have an Account in good standing, a valid and authenticated default Payment Method, and Client must agree to automatically pay for hours billed by Freelancer through Work Diaries."

If a client's profile confirms that his/her payment mechanism has been verified by Upwork and Upwork has not notified the freelancer that work should temporarily cease on the client's project for any reason, the freelancer should be able to rely on the fact that Upwork will meet its commitment that "an hour worked is an hour paid".

I stop working on a project when Upwork provides such notice to me, which has happened a couple of times.

[tlsanders]

Will, I'm confused as to why you think it's my responsibility to read and interpret the TOS for you, but here are just a few things that occur off the top of my head:

Hourly jobs offer no protection at all unless the freelancer uses the time tracker, has high activity during the tracked period and makes "meaningful" memos regarding work. In other words, freelancers who enter hours manually, run the time tracker but are engaged in activities that don't involve a lot of clicking, scrolling or keyboard activity, or simply fail to supplement the screenshots and click-tracking with a memo receive NO protection.

Even when hourly protection applies, there are limits based on the amount of money and the freelancer's usual rates.

Similarly, freelancers in fixed price contracts are protected only if they are willing and able to pay for arbitration. If money is escrowed and the client requests a refund, the freelancer can refund the money or open a dispute. If the parties don't come to an agreement during the dispute, the freelancer has two choices: pay $291 for arbitration, or have the money returned to the client. While Upwork occasionally opts to pay the freelancer out of its own pocket to resolve the dispute, this is purely an internal decision that the job is too low-dollar to warrant the investment in taking the dispute further, and is in no way guaranteed to a freelancer whose client opts not to pay.

All of that aside, when a client issues a chargeback through his or her bank, Upwork retrieves that money from the freelancer.

Upwork takes its "hefty" fee to build and maintain its infrastructure, pay escrow agents, pay the large number of employees it takes to keep the company running, market to prospective clients so that freelancers can obtain work here, etc.

ETA: It's super-disturbing that someone in your field has so little understanding of this, and is so quick to deem statements "misinformation" without having taken the trouble to actually learn how the system works. 

[tlsanders]

Also, Will, since you were apparently unaware of the basics that are fairly visible, you may not be aware that it's recently come to light that despite the frequent postings here in the forums about how only the amount in escrow is at risk, a client can actually dispute the entire contract for up to 30 days after payment of the last milestone. So, if you work on one long job...say, one milestone per month for two years...and earn a total of $20,000, you are potentially on the hook for that whole $20k until 30 days after the last payment is made.

[wlyonsatl]

I am not surprised, Tiffany, but thank you for letting us all know.

[wlyonsatl]

Why are you confused, Tiffany?

Of course there are certain rules and protocols defined by Upwork (in the online documents Vladimir refers to) for both clients and freelancers for both fixed price and hourly projects.

I have never said otherwise.

Upwork wants clients to know they will receive the work they contract for and freelancers they will be paid for work performed.

Upwork has not set itself up as just a casual observer of the relevant agreements between freelancers and clients, nothing more than a place for clients and freelancers to meet and greet.

Upwork tells clients they won't have to pay a freelancer if the work agreed is not delivered. Upwork also tells freelancers they will be paid for work delivered. No one should be confused about the role Upwork has defined for itself and which both clients and freelancer must agree to in order to use Upwork's services.

[tlsanders]

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@Will L wrote:

Why are you confused, Tiffany?

As I clearly stated, I am confused as to why you think it is my responsibility to review and interpret the rules for you, when they are just as accessible to you as they are to me. All the more so because your field suggests that you should be well equipped to understand them yourself.

Of course there are certain rules and protocols defined by Upwork (in the online documents Vladimir refers to) for both clients and freelancers for both fixed price and hourly projects.

I have never said otherwise.

No, you didn't say they didn't exist. You just dramatically misrepresented what they say.

Upwork wants clients to know they will receive the work they contract for and freelancers they will be paid for work performed.

Upwork has not set itself up as just a casual observer of the relevant agreements between freelancers and clients, nothing more than a place for clients and freelancers to meet and greet.

Upwork tells clients they won't have to pay a freelancer if the work agreed is not delivered. Upwork also tells freelancers they will be paid for work delivered. No one should be confused about the role Upwork has defined for itself and which both clients and freelancer must agree to in order to use Upwork's services.

Correct. No one who has read the legal documents associated with this process should be confused. Of course, legal terminology is difficult for some people, particularly if they are not native English speakers, so some users may require assistance in understanding those terms.

It is very dangerous and destructive for those people when someone like you, whose profile suggest business knowledge and expertise, makes a patently false statement about what those terms say and misleads those users into a false sense of security.

 (False statement example: "In order for this arrangement to work, Upwork – not the freelancer - takes full responsibility for collecting payments from clients and Upwork alone accepts the risk that a client won’t pay for work completed by a freelancer as agreed. This is one of the reasons Upwork takes its large fee (usually 20%) from each payment to any freelancer, which is income that offsets Upwork’s losses on non-payment by some clients.")

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[wlyonsatl]

Thank you for the complement, Tiffany, but nothing I have said here is misleading.

Upwork clearly states it's goal is that a freelancer can be sure "an hour worked is an hour paid."

Nothing I have said here conflicts with Upwork's goal in that regard.

[tlsanders]

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@Will L wrote:

Thank you for the complement, Tiffany, but nothing I have said here is misleading.

Upwork clearly states it's goal is that a freelancer can be sure "an hour worked is an hour paid."

Nothing I have said here conflicts with Upwork's goal in that regard.

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 It is literally not possible for you to be that naive and do the job you do, so I will have to assume you are being disingenuous.

Are you actually stating that you believe that Upwork's catchy tagline quoted here overrides the actual legal documents?

You said Upwork alone assumes the risk. That is false. Inarguably, demonstrably, 100% false.

Either you are lying to other freelancers for reasons I don't understand, you have opted not to actually read the TOS before posting, or you are incapable of understanding their terms. 

[craiggabriel]

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@Tiffany S wrote:

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 It is literally not possible for you to be that naive and do the job you do, so I will have to assume you are being disingenuous.

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Yes, I take it Will is being disingenuous for rhetorical purposes.

When he talks about how Upwork will step in and pay freelancers if clients stiff them, etc., I think what he's really asserting is that Upwork ought to do so (given some of the marketing statements the company makes, the "hefty fees" it collects, certain of its goals it has articulated, etc), and that therefore there is cause to object when it does not.

I don't think he's somehow describing Upwork's practices to educate readers of the forum; I think he's complaining about them. He has just chosen a kind of indirect or ironic way to make his point.

[tlsanders]

Craig, I hope that you are right. That's much better than any of the three possibilities I could think of (though no less dangerous for less savvy freelancers reading and relying on his statements).

I'm not sure, though, because I'm pretty sure that his comments about "misinformation" refer to my statement in another thread he was writing in at the same time. 

Still, I'm gonna cling to the possibility that you're right for the moment.

[vladag]

Hi Will,

I understand your concern and confusion, but would like to invite you to review the three legal documents found here and follow up with any questions you might have about Upwork ToS.

[firescue17]

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@Will L wrote:

Have I gotten any of this wrong?

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 All of it.

@Will L wrote:

Why are you confused, Tiffany? 

 One of the two people in this discourse is confused. And it ain't Tiffany.

Sweet jezus. This thread should be locked, deleted, and scrubbed from the intarweb.

This is an imminent disaster waiting for the next new freelancer to decapitate themselves with it.

[m_terrazas]

Steven, I think you're absolutely right.

It should be erased, and not just because it can be read by any new freelancer, but anyone who, like me, has trouble understanding the TOS due to the language (apart from its intrinsic complexity).

Especially because, due to Will's profile, you would think that he can perfectly understand the TOS.

Yes, better eliminate it.

[wlyonsatl]

I am very surprised at so many negative reactions to my post.

Fulfilling its stated goal of assuring payment for work performed (according to Upwork’s TOS, etc., of course) is one of the things Upwork does extremely well. After being on Upwork for a few years and completing well over 100 projects, I have been paid in full for my work on time every time. Upwork has never told me they wouldn’t pay me because my client did not pay Upwork. (Whether this has ever happened with one of my clients I have no way of knowing.)

If others here have had any problem getting paid on time and in full when they have completed work according to Upwork’s TOS, etc., then they should tell us what their contrary experience has been that makes them disagree with my praise for Upwork in this regard, not criticize me saying my payment experience here on Upwork has been excellent.

[mobilyzz-sanjay]

Will, you are correct.

You expect Upwork to take responsibilities especially when they take so many security measure, security holds and charge comparitively higher fee per project. 

[wendy_writes]

No, Aniruddd, Will is NOT correct.  He is posting incorrect information.  An individual  can certainly disagree with policies and has one of two choices as a result of that disagreement.

Stay 

~or~

Leave.

The person in disagreement with existing policies does not, however, have the right  to post intentionally misleading information.  Will is not hampered by attempting to decipher the Terms of Service in a 2nd language.  According to his profile, he certainly has the educational credentials to grasp the nuances in the same.

As Steve noted, this thread is full of misleading information and, as a result, should be removed to save others from following it.

[tlsanders]

Will, many freelancers have shared those stories in the forums.

They are, of course, completely irrelevant to the issue under discussion here. 

No one is disagreeing with you because of a bad personal experience. We are disagreeing with you because you are either lying about or horribly misinformed about what the Upwork user agreement actually says.

Even the moderator has confirmed that you are confused and offered you resources to correct that.

[petra_r]

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@Will L wrote:

I am very surprised at so many negative reactions to my post.

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 SERIOUSLY? Are you really? Even considering the source it does take "what the beep" to a whole new level...

[wlyonsatl]

What's all the wailing and gnashing of teeth about here over the past three days?

Do any of you think Upwork allows a freelancer to arrange direct payment from a client?

Is Upwork not reliable in always making timely payment on work delivered by the freelancer and not disputed by the client?

Is Upwork's 20% fee not in place in part to offset Upwork's losses on fraudulent activity, as well as to pay the electric bill, payroll, etc.?

At any rate, if you're going to complain about my post, be specific. I don't need to read through Upwork's Terms of Service, User Agreement, etc. again, but if you can highlight something I have said that conflicts with these documents, please do provide a quote that anyone can easily look up.

[tlsanders]

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@Will L wrote:

What's all the wailing and gnashing of teeth about here over the past three days?

The lies you have chosen to tell and re-tell, that are harmful to a freelancer who makes the mistake of relying on your alleged expertise.

Do any of you think Upwork allows a freelancer to arrange direct payment from a client?

Of course not. WE read the TOS. And, of course, this is intentional obfuscation--no one has suggested any such thing.

Is Upwork not reliable in always making timely payment on work delivered by the freelancer and not disputed by the client?

This, also, is irrelevant to your false claim that Upwork and Upwork alone assumes the risk of a non-paying client.

At any rate, if you're going to complain about my post, be specific. I don't need to read through Upwork's Terms of Service, User Agreement, etc. again, but if you can highlight something I have said that conflicts with these documents, please do provide a quote that anyone can easily look up.

Many of us have been specific. We have done so not to save you the trouble of finding out what you've agreed to, but to help ensure that other freelancers are not misled by your lies. 

If you are unable to look up the terms we've cited without a direct quote or link to a specific paragraph, then you are unfit to be engaging in business for yourself in any capacity, let alone the one in which you pretend expertise.

I initially agreed with other freelancers who suggested that this thread should be removed before you harmed new freelancers, but I have changed my mind. I think it is very important that clients you might defraud into paying for business advice understand that you deem the actual contractual terms not worth reading and spout incorrect information with no concern whatsoever for the impact it has on the people reading it.

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[wlyonsatl]

Well, Tiff, I've never had an Upwork client who refused to pay for the work I delivered to them.

If you have had to deal with this problem, why don't you explain what you did to help Upwork ensure a non-paying client did pay Upwork?

In my initial post I clearly referred to Upwork's "hourly and fixed-price contract payment rules" - no one who can read English could interpret my post as saying a freelancer has nothing more to worry about than submitting work. 

[tlsanders]

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@Will L wrote:

Well, Tiff, I've never had an Upwork client who refused to pay for the work I delivered to them.

Me neither. How is that relevant?

Imagine that someone you are advising in business is considering entering into a joint venture with another company you have done business with. Would your advice be "Don't trouble yourself about reading the contract...I have had no problems working with that company"?

If you have had to deal with this problem, why don't you explain what you did to help Upwork ensure a non-paying client did pay Upwork?

As I said, I have not had such a problem. It's unlikely that I would have such a problem, since I work with niche clients who are unlikely to be dishonest. If such a problem did arise, I would proceed to arbitration and pursue any necessary collection action...because I have the resources and the knowledge base to do that. My concern is for the freelancers who don't.

In my initial post I clearly referred to Upwork's "hourly and fixed-price contract payment rules" - no one who can read English could interpret my post as saying a freelancer has nothing more to worry about than submitting work. 

Your exact words were that Upwork alone assumed the risk of non-payment. It was false then, and it's false now. The only difference is that then I believed it was a mistake and now it has become clear that it is a malicious lie.

Why? What do you gain by tricking more vulnerable freelancers?

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[wlyonsatl]

I know you just like to argue, Tiff,  but a mature and experienced business person would have simply noted there are complexities if they thought my original post was too simplistic and they wanted to be instructive to other freelancers in their own experiences with Upwork's payment system and rules.

This is just a blog, not a seminar on Upwork's many rules, protocols, etc. My point was clearly that Upwork's payment mechanism has been very reliable in my experience with over 100 different clients.

Now, I'm done with you. Rail on if you must.

[tlsanders]

I didn't think your original post was too simplistic.

I thought (correctly) that it was false.

Not too simple. Not nuanced.

FALSE.

I'm reiterating that again and again not because I like to argue--in fact, one of the reasons that I write rather than practicing law today is that I do not enjoy argument for its own sake--but because your lies are dangerous to vulnerable freelancers.

If I have to reiterate that you're lying 10,000 times to try to keep you from achieving the harm you're for some reason hell-bent on causing, I will. 

[petra_r]

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@Will L wrote:

Well, Tiff, I've never had an Upwork client who refused to pay for the work I delivered to them.

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 Outright lie, as proved by your posting history.

[tlsanders]

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@Petra R wrote:

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@Will L wrote:

Well, Tiff, I've never had an Upwork client who refused to pay for the work I delivered to them.

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 Outright lie, as proved by your posting history.

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 At least now it makes a little more sense that a past client threatened him with bodily harm. That seemed far-fetched at the time, but not so much now.

[petra_r]

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@Tiffany S wrote:

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@Petra R wrote:

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@Will L wrote:

Well, Tiff, I've never had an Upwork client who refused to pay for the work I delivered to them.

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 Outright lie, as proved by your posting history.

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 At least now it makes a little more sense that a past client threatened him with bodily harm. That seemed far-fetched at the time, but not so much now.

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 Usually having a near photographic memory is a curse rather than a blessing, but at times it comes in handy 😄

Now if only it could extend to numbers as as well...

[tlsanders]

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@Petra R wrote:

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 Usually having a near photographic memory is a curse rather than a blessing, but at times it comes in handy 😄

Now if only it could extend to numbers as as well...

 We could team up. I'm 51 and I still know all of my middle school friends' phone numbers.

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[wlyonsatl]

For anyone who has had the patience (and misfortune) to read through all the useless chatter on this thread, I will repeat my original statement – it has been my experience that Upwork has paid me on time every time for every one of the nearly 150 Upwork projects I have worked on, which is one of the primary reasons I use Upwork.

Of course, AFTER Upwork makes a payment to a freelancer on a project, any client can request a refund, but even a moderately intelligent person knows payment has to have first been made before a refund would be possible. (And requesting a refund is very different than actually receiving a refund. Whether such requests are successful is highly unlikely, in my own experience.)

If you are new to Upwork don’t be put off by all the vitriol, sarcasm and condescension you’ve seen here. Even after you read all of the Upwork documents related to rules and protocols (Terms of Use, etc.), you will find that no document covers all the possible situations you might find yourself in. Everybody here on Upwork had to start where you have started; most will try to answer any reasonable questions or concerns you have. The people here who actually work for Upwork are always very helpful, too.

‘Nuff said.

[wendy_writes]

And we, both moderators and FLers, repeat -

Will, you continue to misconstrue and misrepresent what is in Upwork's Terms of Service.  

[tlsanders]

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@Will L wrote:

For anyone who has had the patience (and misfortune) to read through all the useless chatter on this thread, I will repeat my original statement – it has been my experience that Upwork has paid me on time every time for every one of the nearly 150 Upwork projects I have worked on, which is one of the primary reasons I use Upwork.

Lying about what your original statement was is fruitless. We have all read it.

Of course, AFTER Upwork makes a payment to a freelancer on a project, any client can request a refund, but even a moderately intelligent person knows payment has to have first been made before a refund would be possible. (And requesting a refund is very different than actually receiving a refund. Whether such requests are successful is highly unlikely, in my own experience.)

Incorrect. "Moderately intelligent" people (and probably even those of extreme low intelligence are capable of understanding that clients enter credit card information for hourly jobs and then have those credit cards turn out to be invalid or stolen when Upwork attempts to process payment, and that clients sometimes don't create milestones, and that even when they have, depositing funds in escrow is not the same as "making payment." Just to name a few of the many possible variations.

It's good to see that you have backed off of your original lie, but this type of obfuscation fools no one.

If you are new to Upwork don’t be put off by all the vitriol, sarcasm and condescension you’ve seen here. Even after you read all of the Upwork documents related to rules and protocols (Terms of Use, etc.), you will find that no document covers all the possible situations you might find yourself in.

Obviously, no one here is attempting to discourage newcomers. All of us but you are concerned with equipping them to protect themselves to the greatest extent possible, and to be prepared for issues that sometimes blindside inexperienced freelancers.

Your "Even after you read..." sentence seems to suggest that you caved in and decided to finally read the TOS, after days of aggressively debating what they said while announcing that there was no reason to actually read them, but I wouldn't want to assume. Did you read them? 

Everybody here on Upwork had to start where you have started; most will try to answer any reasonable questions or concerns you have. The people here who actually work for Upwork are always very helpful, too.

‘Nuff said.

Well, thank God for that. Is it just this thread, or are you completely abandoning your efforts to trick and undermine new freelancers?

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