Why 2021 is the year I start charging late fees
At the start of 2021, instead of making resolutions and planning what I wanted to accomplish this year, I spent several hours chasing down unpaid invoices from 2020 — payment I was entitled to after completing the required work for each publication. Some outstanding invoices were from as far back as July, six months after I sent the invoice.
The extra, unpaid work of collecting late payments is a familiar task for many freelancers.
Freelance journalists in all mediums serve an important role. As many newsrooms around the world have shrunk in recent years as a result of layoffs and buyouts, more and more journalists are now working story to story, contract to contract.
They fill critical gaps core newsroom staff can’t cover, for reasons ranging from capacity to location and access. Freelancers also provide a much-needed outside perspective with lesser-known stories that newsrooms may otherwise miss.
There are many skills — from admin to marketing and IT to negotiating — needed to sustain a freelance career. One of those skills, crucially, is managing cash flow and keeping track of finances.
In a now-viral post for Medium, Seattle-based freelance journalist Wudan Yan wrote about growing fed up from not being paid on time and how she successfully billed late payment fees for two out of three publications that owed her a combined US$5,000.
“Many people have asked me if I ever worked with those three publishers from last year again. I haven’t, and I don’t have plans to,” she said in a May 2020 edition of a newsletter which accompanied The Writer’s Co-op, a podcast she created for freelancers.
Yan charges a 20 per cent late fee if a client doesn’t pay after 30 days. Good editors, she said, will want their freelancers to be paid on time for their work.
To date, there are only a handful of efforts at legislation that explicitly support freelancers. In 2017, New York City instated the Freelance Isn’t Free Act. Under this legislation, New York City businesses must pay freelance workers within 30 days of completion of work or face penalties of up to double the amount of the originally contracted fee.
Other emerging changes in recent years include an ordinance implemented in Minneapolis in January 2020 that requires freelancers be paid upon 30 days after completion of a work.
Nowhere in Canada is there a comparable law covering freelancers.
For employees in Canada, the Canada Labour Code states that employers must pay within 30 days. Some contractors do have field-specific protections, such as the Ontario Construction Act, which came into effect in 2019 to improve competitiveness and efficiency for construction businesses and requires property owners to pay contractors within 28 days of receiving an invoice.
Marie-Eve Sigouin-Campeau, a spokesperson for Economic and Social Development Canada, said that “the workplace has changed significantly” since federal labour standards were formed in the 1960s, and that the government knows updates are needed to cover a growing number of self-employed workers.
“The government of Canada is examining how to develop greater labour protections for gig workers, including people who work through digital platforms, whose status is not clearly covered by provincial or federal laws,” said Sigouin-Campeau in an email. “We will continue to consult over the coming months to determine what these changes might look like and their potential impact on both workers and employers.”
There was no timeline given on when new legislation would be proposed or when new protections may come online.
Katie Jensen, an audio producer based in Toronto, said that in August, various media companies owed her about $10,000 to $20,000.
She knows she’s far from alone.
“I do know that a lot of my peers who are freelance journalists have had many different experiences with pretty much every media company in this country,” said Jensen. “There’s no one angel perfect organization who pays their invoices really expediently.”
To encourage faster payment in the industry as a norm, Jensen said she tries to pay the contractors she hires for her own production company the same day they send an invoice.
In Canada, where the journalism market is much smaller than in the United States and there are fewer clients, late fees are not commonly used. For Canadian freelancers, introducing a late fee and demanding prompt payment could potentially burn bridges with the few publications and editors that exist in Canada.
Not getting paid on time is one thing, but some freelancers have trouble getting paid at all.
In November and December 2019, freelance photojournalist and writer Kieran Delamont was writing several articles per week for Toronto weekly Now Magazine. The publication was bought by media startup Media Central Corp in December 2019 and soon after, he said, payments stopped. “I had been kind of like admittedly loose with invoicing … and they would often get like two or three [invoices] at a time,” he said. By February 2020, he said he was owed almost $10,000.
After repeatedly contacting his editor and the accounting department for months to no avail, in the summer, Delamont called out the magazine on Twitter. After, he was finally paid around 80 per cent of the money he claims he was owed.
Other freelancers who wrote for Now were also caught in limbo. In June 2020, Samantha Lui, who was freelancing for Now, tweeted out her exchange with the accounting department while she was following up on a $100 payment. According to the tweets, her check couldn’t be issued because it originated with the former company.
After eight months and various correspondence, she eventually received payment because an editor said it was “silly” for the pay department to argue over $100.
Delamont said he sees his situation as a “learning experience.” He never signed a contract with Now outlining payment terms, which he said he regrets. In the future, he won’t hesitate to stop working if his arrears reach a certain amount: Between the time of the invoice and the payment, “whole operations will shut down.”
“I think the system is still designed essentially so that if a publication wants to not pay you … there’s nothing really compelling [the publication] other than the reputational hit they would take to pay,” said Delamont. “And that sounds kind of drastic but I think when you see people kind of calling out publications online, or sort of airing the dirty laundry that way … that really is the only kind of power I think that most freelancers have.”
The few legal avenues freelancers may have to enforce late fees aren’t necessarily realistic.
It costs $102 to file a claim in Ontario’s small claims court, for example, and around $80 to serve papers. For unpaid arrears under $400, said Delamont, it’s just not worth the time or money.
He does however intend to take the publisher of Now to small claims court over what he said are outstanding payments, totalling around $2,000.
He wants to see a better legal system freelancers can access to chase payments owed to them. He notes that with collection agencies, which take a portion of the fee, freelancers would lose a cut of their earnings.
Jensen said freelancers in Canada should get used to talking about money if they want to succeed in their careers.
“Canadians have a really strange relationship with money where we feel uncomfortable talking about it. It makes us embarrassed to even mention it,” she said. “We keep people in their place, and we don’t allow people to get knowledge that would help them to have upward mobility, when we don’t talk about money.”
“Late fees are a part of running a business,” writes Yan in her newsletter. “If someone undermines me for filing a late fee, they are gaslighting me. They are invalidating a business practice that is commonplace in every other industry. If someone does this to you, they are not respecting you as a freelancer or a freelance business.”
She has a few tips for freelancers seeking on-time payment from publications: Send an invoice as early as possible, ask editors to make amendments to the contract to be paid within 30/45/60 days and to be paid after completion of the work, not when the work is published. She has also asked publications to pay kill fees in advance, as a way to get partial payment after completing the first draft for an assignment.
When filing a late fee, she said to stick to the facts. Remind editors of the date that the assignment was accepted, the date the invoice was submitted, the terms of the contract and how many days have passed since then.
Even if it’s not a norm yet in Canada, says Yan, late fees should still be a tool freelancers consider when they aren’t paid on time.
“Things can’t change if people don’t tell them what direction they need to change in,” she said.
