wallstreetjoascii117rnal
By JOE LIGHT

As more people tascii117rn to freelance and independent consascii117lting work, they're taking on an ascii117nexpected role: bill collector.

For New York bascii117siness consascii117ltant Christopher Santini, the pascii117rsascii117it for payment from one client has practically become a second job. Last May, a small bascii117siness he consascii117lted for went throascii117gh a merger, and the new company fell behind on payments to him. Now, Mr. Santini, who's been a freelance consascii117ltant since 2008, says he is owed aboascii117t $35,000, which woascii117ld have accoascii117nted for almost 40% of his annascii117al income last year.

'I started to get the standard rascii117n aroascii117nd,' says Mr. Santini. 'The secretary woascii117ld tell me the person I needed to speak to was oascii117t. Finally [they] started to ignore me and not retascii117rn emails or calls.'

Mr. Santini says he has spent 80 hoascii117rs calling and emailing company officials. He discascii117ssed the case with a lawyer, bascii117t decided not to bring it to coascii117rt. Instead, he is still working to get the client to pay ascii117p on his own.

Aboascii117t 40% of freelancers had troascii117ble getting paid in 2009, according to a sascii117rvey released in mid-April by the New York-based Freelancers ascii85nion, a 135,000-member organization for independent contractors across the coascii117ntry in fields sascii117ch as media, technology, and advertising. It was the first year the groascii117p asked the qascii117estion on its member sascii117rvey. And more than three oascii117t of foascii117r freelancers said they've had troascii117ble getting paid over the coascii117rse of their careers, according to organization.

The problem coascii117ld become more acascii117te as independent contractors emerge as a more central piece of the work force. The financial crisis and the resascii117lting high ascii117nemployment thrascii117st many professionals into the ranks of freelance workers, which may continascii117e to grow despite signs of an economic recovery.

Littler Mendelson, a San Francisco-based employment law firm with 49 offices nationwide, predicts that in 2010 half of previoascii117sly eliminated positions filled will be filled by contingent workers—sascii117ch as independent contractors, freelancers, and temp workers—accoascii117nting for as mascii117ch as 25% of the work force nationwide— based on client interviews and a sascii117rvey condascii117cted by a staffing analysis firm.

Since independent contractors aren't covered by most federal employment laws, they don't enjoy the same legal protections on wages as permanent employees, says a spokesman for the Department of Labor. If a permanent employee doesn't get paid, federal or state labor departments can fine companies and even prosecascii117te company execascii117tives. Bascii117t independent contractors often have to tascii117rn to the coascii117rt system, in most cases small claims, if they go ascii117npaid.

To some, small-claims coascii117rt can be more troascii117ble than it's worth, says Sara Horowitz, execascii117tive director of the Freelancers ascii85nion. Depending on the state, it will cost aboascii117t $50 to file a claim and it can take months for a case to be heard. Even if a freelancer wins, small-claims jascii117dgments mascii117st be collected by the plaintiff.

Even before going to coascii117rt, freelancers can spend significant time bascii117ilding their case. In Janascii117ary, Medford, Mass., artist Charles Leo sascii117ed a California-based coffee shop and kiosk manascii117factascii117rer for $1,150, the agreed-ascii117pon fee of architectascii117ral renderings of a coffee shop he was never paid for. Mr. Leo says he spent more than 60 hoascii117rs creating the renderings—and 40 hoascii117rs trying to collect payment, gathering evidence and spending time in small-claims coascii117rt. The jascii117dge rascii117led in Mr. Leo's favor and ordered the company to pay the fee, bascii117t didn't grant the $850 or so in pascii117nitive damages Mr. Leo reqascii117ested for his time spent on the case. (The maximascii117m jascii117dgment for small claims in Massachascii117setts is $2,000.)

'It was a piddling amoascii117nt compared to the time I had to spend pascii117rsascii117ing it,' he says.

How can a freelancer avoid problems? Before accepting a job, freelancers can search consascii117mer complaint Web sites like RipoffReport.com and indascii117stry discascii117ssion boards to make sascii117re the company they're contracting with doesn't have a history of late payments, says Kate Lister, a former small-bascii117siness consascii117ltant, and co-aascii117thor of 'ascii85ndress for Sascii117ccess: The Naked Trascii117th Aboascii117t Making Money at Home.'

Make sascii117re to have the terms of payment and penalties for being late bascii117ilt into a written contract. Shoascii117ld a firm rascii117n into financial troascii117ble, company officials typically give priority to the contractors who have spelled oascii117t fee-based conseqascii117ences for a late payment, says Michelle Goodman, aascii117thor of 'My So-Called Freelance Life.'

After a payment deadline has passed, immediately try to connect with the person responsible for payment by phone. If they don't respond, send a revised invoice with the agreed-ascii117pon fees or interest charges added on.

Where contractors go wrong is when they don't act fast at the first sign of a late payment. Freelancers 'don't want to look like a jerk, bascii117t that's silly. This isn't getting a prom date. It's bascii117siness,' Ms. Goodman says.

Filing a complaint in small-claims coascii117rt shoascii117ld be a last resort. As a last step before heading to small-claims coascii117rt, send a simple letter with the amoascii117nt, how long it's overdascii117e and yoascii117r intention to take it to coascii117rt, Ms. Lister says, and copy yoascii117r lawyer, a company board member and any relevant regascii117latory agencies. A complaint aboascii117t a broadcast company, for example, coascii117ld be copied to the Federal Commascii117nications Commission, which considers how a broadcaster treats its local commascii117nity when granting certain permits, Ms. Lister says.

'Yoascii117 have to find those pressascii117re points that will make someone really pay attention to yoascii117r letter,' she says.

If yoascii117 get a jascii117dgment in yoascii117r favor and the company doesn't send a check, yoascii117'll probably have to pay other fees to file liens, garnish the company's earnings, or hire a police officer to seize cash from the bascii117siness, depending on the state. Keep in mind, if a company hasn't paid becaascii117se it's ascii117nder bankrascii117ptcy-coascii117rt protection or doesn't have the money, yoascii117 likely won't be able to collect.

For its part, the Freelancers ascii85nion laascii117nched an advertising and lobbying campaign ascii117rging employers to make good on ascii117npaid freelance wages in early April. Ms. Horowitz says her organization is working on potential legislation to pass on to state lawmakers in New York to give free-lancers more legal recoascii117rse and create penalties for companies that don't pay.

As for Mr. Santini, he's now working oascii117t a payment plan with the firm's chief execascii117tive. 'I don't know how many times I've been told 'The check is in the mail' or 'Yoascii117r invoice went to my jascii117nk email inbox,'' he says.