Ask FreelanceSwitch: Dealing with Problematic Clients and Low Pay

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Credit: by Yuri Arcurs on Photodune

In this issue of Ask FreelanceSwitch, we look at several questions from the same freelancer who is working with a tough employer. Ask FreelanceSwitch is a regular column here that allows us to help beginners get a grip on freelancing. If you have a question about freelancing that you want answered, send an email to askfreelanceswitch@gmail.com.

I am a web developer (who sometimes gets lumped in as a web designer, as I can kind of fly front-ends) and I have been working for a very small (me + the owner) graphic design company. I have been having a number of issues with him, due probably to a combination of me being new to freelance contracting on a mid-to-long term basis (I have contracted on ad-hoc work before). I would also suggest the problem is due to his inexperience at moving away from design and becoming a project/business manager and having had little experience working with freelancers.

So, I have a few qualms, issues, and queries to share here, feel free to publish any you want, answer those of interest, and ignore the rest.

My employer thinks that he should be able to pay a freelancer the same rates as he would pay a full-time employee (albeit an underpaid full-time employee). I have discussed this with him on a number of occasions, pointing out that, as a freelancer, I have to cover additional taxes (above the standard income tax), my operating costs (equipment, internet, communications bills), my own leave pay (as I am not granted any paid leave under the contract), my own insurance, etc. But, he refuses to revise his rate to allow for these expenses. Are there any online resources I can direct him to which explain the differences in contractor versus employee pay?

My employer is a web design company, and he is constantly distracting me by asking me to switch between projects at the drop of a hat. He does not understand (as much as I try and tell him) that doing so means that I am losing productivity as it may take an hour or longer for me to delve back into the original project to the same depth as before the distraction and to get my mind back into the correct gear. Even worse, he insists on talking to me about feature requests and bug reports over the phone (whilst I am doing other work) or having me come into the office (I work remotely) rather than writing the details down so I can refer to them at a later stage. Have you any suggestions on how I can manage him better?

My employer never provides me with a written specification for any project. Yet, he demands that I provide him with a solid and definitive quote before we commence the work. He keeps telling me that quotes (as opposed to estimates) are the standard within the design business, and does not agree with my replies that I can only provide estimates based on the provided information, and that those estimates will need to be adjusted as more information comes to hand, or, in the case of remedial work, the extent of the damage/work required becomes apparent. Are fixed quotes standard within the web design industry? Is it normal for remedial work (recovering and/or rebuilding an existing website) to also be done under a fixed quote? What is the current industry stance on fixed quotes versus estimates?

My employer has, on occasion, advised me that he has no work for me on a specific day. The terms of my contract state that I have a guaranteed per day minimum pay, so would it be wrong of me to still charge him for a day which I did not work, but I had been prepared to work (especially as I had 1 hour’s notice that I was not needed)? On these days, it is also not uncommon for him to still send me a number of emails, or SMSes, expecting a reply that day. Should I charge him (at the minimum) for the time it took to reply to these requests, or should I have pushed back and told him that I would handle those inquiries on my next paid day? I worry that I am giving up too much of my own time (outside of hours, or on these down-days) for no extra pay, on a job where the pay rate is so low that I would almost be better working at McDonald’s.

As you can see, a pretty grim picture. I have struggled, and strained, and tried to reinforce to my employer that he is running a losing business, and is only doing so because he is not charging enough for the work we do, and, as such, is not paying either of us enough. He has been through a number of people working in my role in the past (I am not sure of their reasons for leaving, but I can guess), and I am one good offer and half-a-heartbeat away from following their path out the door (which, for a small company like this one, where he is not web-savvy, would basically mean shutting him down until he employed someone new to repeat the cycle).

Contractor Versus Employee Pay

You are absolutely correct in requesting a higher pay rate as a freelancer: remind him that he is not paying payroll taxes and at the very least, you should be getting that amount. To be perfectly honest, I would walk away from a client who can’t grasp that there are differences between an employee and an independent contractor. There’s not a specific resource that I would say is guaranteed to change this type of client’s mind, unfortunately. You might consider looking at this article on what to consider when setting your rates in order to make sure that you’re covering everything, though.

However, based on your description of your work situation, it sounds like you are effectively an employee, rather than a contractor — at least in terms of what the IRS will think. You may want to sit down with this guy and tell him that by making sure that you’re actually more of a freelancer — including paying you appropriately — will insure that he’s not hit with the penalties that go along with misclassifying an employee as a contractor.

Managing a Client Better

Having a sit down with your client and telling him about how you can work more effectively — possibly framing it in terms of how your approach can save him money in the long-term — is likely the only way to get him to change his behavior. There’s no guarantee that it will get the job done, either. You might also ask him why he prefers to work in such a manner and see if you can describe your concerns in a way that works with what he needs to get done. He may feel that his time is too valuable to write up full explanations of changes and the phone is faster, for instance.

Quotes and Estimates

Fixed quotes are not necessarily the norm in web design: there are many freelancers who do provide fixed quotes (usually because they work on very similar projects over and over again) as well as many freelancers who provide estimates and then go from there. There isn’t a universal industry standard in this case. Since recovering a website or rebuilding it is often a fairly straightforward task, though, it is more likely to see a standard rate for such a process — although, once again, it can vary.

Guaranteed Minimums

If your contract states that you get a guaranteed minimum, you should absolutely take your guaranteed minimum even if you aren’t working. And if he’s notified you that he doesn’t have work for you that day, answering multiple emails and other messages can likely wait, unless he’s willing to bump up your daily minimum to at least cover the time you’ll spend on those messages. If you were a full employee and you took a day off of work for any reason, few bosses would expect that you would spend an hour or two on the phone with them despite being out of the office.

The Overall Situation

As a freelancer, you can take a hard line and refuse to work on any terms other than your own. It may be worth issuing an ultimatum to this client that you expect to be treated as a full contractor, which means operating on your terms on issues like how to submit revisions. From your description, such an ultimatum may mean that you’re looking for a new client, but it may also get this client to actually listen to you.

You say that you’re making marginally more than you might make at McDonald’s, though, and going looking for a new client or working arrangement may be a very good idea at this point. When a situation is not working out, despite having tried to talk to the client, sometimes the only thing you can do is let that client go.

Photo credit: Some rights reserved by Yuri Arcurs.