Gig Economy

Sluggish Payments Hold Back Gig Economy

Freelance work isn’t free — no matter what some clients may wish. When multiple bills come in or cash falls short, clients can be quick to put freelancers’ bills on the bottom of the pile — a major problem for those who earn a living off the gig economy.

Many gig workers finish their projects only to spend months chasing clients for their agreed-upon compensation, according to the Associated Press. For publicity and event-planning freelancer Sandy Sloane, although her contract stated she was due to be paid within 30 days, in actuality it took 11 months — and only then after continual follow-up and threat of legal action.

Freelancers also can find themselves in a financial fix when clients want new changes — without a clear prior agreement of what that extra time investment will cost. Customers unhappy with the final project or looking to pull one over may try to skip out on the bill entirely.

The payment headache is putting a damper on a fast-growing economic sector.

According to the forthcoming PYMNTS Gig Economy Index™, which is set to release next week, 84 percent of surveyed freelancers said they do more work if they were paid faster.

For those who crave the flexible lifestyle and want to crown themselves boss of their own domain, there are minefields to navigate. After getting burned, freelancers tend to rework their contract stipulations and require a portion of payment upfront, according to the AP.

Gig workers also told PYMNTS that their payment mechanism can take a big bite out of earnings — in some cases, snapping up 10 to 20 percent of their income. Several legislators are taking note of freelancers’ financial vulnerability and are fighting for protections that can let them focus less on pay and more on doing their best work.

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