August 29, 2010; Source: Crain’s New York Business | When times get tight, some organizations try to find a little extra float by delaying payments to or even stiffing their freelancing individual vendors. The problem has become serious enough that the nonprofit Freelancers Union in New York State has taken out subway ads on behalf of their members, to educate the public about the issue, and have set up a website where contractors can “out” deadbeat clients. They are also pursuing legislation that will make it easier to recover lost payments.
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A recent study by a Rutgers University economist, William Rodgers, estimates that 42% of almost 900,000 freelancers in New York State reported problems collecting payments for their work last year. This totals approximately $4.7 billion. Since half of the new jobs added in the recovery are expected to be independent contractors, the protections provided to them in collecting their payments becomes more and more important. This article discusses the difficulty for contractors in confronting payment problems with any particular client. One contractor waiting for more than $50,000, says he worries about making too much of an issue of it “both because of the time involved and the possibility of developing a reputation as difficult to deal with. ‘You’re just a little guy,’ he sighs. ‘You just take the hit.’” This employment trend and what grows up as nonprofit response around it will be very important to watch.—Ruth McCambridge