Late fees on invoices: What are freelancers' rights??
Thread poster: Jillian Pandor

Jillian Pandor
United States
Local time: 03:12
Spanish to English
+ ...
Oct 24, 2013

Hi Everyone,

As some of you have seen, I am in quite the debacle as far as late payments with an agency. In fact, the payment of about 150€ is over 40 days later (that is, after a 60 day pay period that the agency itself set). I have explained this entire problem in the following link (http://www.proz.com/forum/money_matters/258368-problems_with_agencies_that_dont_pay:_what_can_a_freelancer_do.html#2217022), however, I wanted to open a new forum since I have kind of changed topics.

Is it legally within my rights to charge the agency all costs that are involved in pursuing this payment (ie. certified mail costs, or possibly lawyer fees)? Can these things legally be added in as line items in the invoice? I personally think it's only fair that they pay for the extraordinary measures that I need to take to get them to pay me.

My next question is...how can I calculate late fees in Spain (does anyone have any websites that they know of)? Is it within my rights to charge late fees? Do agencies normally end up paying them?

A colleague in the last forum mentioned "You can even claim a lump-sum of 40 Euro as collecting fees, unless higher expenses are involved." Does anyone have any experience with this?

What I was thinking is that from now on I need to start including a late fee policy in the terms and conditions listed on my invoices. However, according to the posts in the last forum (included above) it's not necessary that it's included, as it is the law. If I do include them, legally, if they accept the invoice does that mean they are automatically accepting to the terms and conditions set forth on it and they will be bound to them? Or...is it necessary to have each client sign the invoice stating that they agree to the late fee terms and conditions (which would be difficult). Do any of you have experience with such policies? Or advice??

Does anyone have any source where I can read this information about the late fee law in Spain (or in the EU) to know exactly what to charge or how it is calculated etc??

I will definitely be leaving feedback about this company on ProZ.com as well as some other pages...it's so important that other people don't fall into this trap!

Thanks SO much for all of your help!!

Jillian


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Dr. Andrew Frankland  Identity Verified
Spain
Local time: 09:12
Member (2007)
English
+ ...
BOE Oct 24, 2013

Dear Jillian,

The relevant legislation can be found on page 15249 of the BOE of 23 February 2013 (RD 4/2013, of 22 February "de medidas de apoyo al emprendedor y de estímulo del crecimiento y de la creación de empleo).

Please send me the name of the agency concerned by private message as I'm also having payment problems with a Spanish agency.

All the best,

Andy


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Samuel Murray  Identity Verified
Netherlands
Local time: 09:12
Member (2006)
English to Afrikaans
+ ...
@Jillian Oct 24, 2013

Jillian Prevost wrote:
Is it legally within my rights to charge the agency all costs that are involved in pursuing this payment (ie. certified mail costs, or possibly lawyer fees)? Can these things legally be added in as line items in the invoice?


I think, legally, you can put anything you want on your invoice, but, legally, the client can refuse to pay anything that wasn't agreed to.

I suspect your question is whether clients are legally obliged to pay those fees, right? The answer is: no. Clients are obliged to pay whatever was agreed. If they are late in payment, and if they did not agree to any late-payment policy of yours (and if you did not agree to consider whatever contract you signed with them to supercede all other arrangements), then what they owe is what was originally agreed, and nothing more.

However, if both you and the client are in the EU, then you can legally charge them certain late payment fees which they are obligated to pay... but those fees aren't very high:

http://www.proz.com/forum/money_matters/257219-any_ideas_to_get_translators_paid_on_time_more_often-page2.html#2210948

A colleague in the last forum mentioned "You can even claim a lump-sum of 40 Euro as collecting fees, unless higher expenses are involved." Does anyone have any experience with this?


Yes, this applies if both you and your client are in the EU. See the post that I link to above.

What I was thinking is that from now on I need to start including a late fee policy in the terms and conditions listed on my invoices.


Well, you would have to include those terms in the negotiations before you start the job, if you want them to apply. You can't just tack something onto your invoice and expect that that extra requirement will just be accepted by the client as if it was part of the original deal.

However, according to the posts in the last forum (included above) it's not necessary that it's included, as it is the law.


Laws are specific to specific countries. If both you and your client are in a country where "it is the law", then it is the law, but otherwise it isn't.

In fact, in some countries it is a legal requirement for you to state it. In my country of residence, I'm required by law to state payment term (not the terms but the term) on the invoice. Without that statement, the invoice is not a legally acceptable document, in my country of residence.

If I do include them, legally, if they accept the invoice does that mean they are automatically accepting to the terms and conditions set forth on it and they will be bound to them?


What do you mean by "accept the invoice"? Confirmation that they received the invoice is not "acceptance" of the invoice in the sense that you seem to mean it.

Or...is it necessary to have each client sign the invoice stating that they agree to the late fee terms and conditions (which would be difficult).


You should get clients to agree to your terms and conditions before you start the job... not at the time when you send the invoice.


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Bernhard Sulzer  Identity Verified
United States
Local time: 03:12
English to German
+ ...
a few suggestions Oct 24, 2013

Jillian Prevost wrote:

...

My next question is...how can I calculate late fees in Spain (does anyone have any websites that they know of)? Is it within my rights to charge late fees? Do agencies normally end up paying them?

A colleague in the last forum mentioned "You can even claim a lump-sum of 40 Euro as collecting fees, unless higher expenses are involved." Does anyone have any experience with this?

What I was thinking is that from now on I need to start including a late fee policy in the terms and conditions listed on my invoices. However, according to the posts in the last forum (included above) it's not necessary that it's included, as it is the law. ...

Jillian


Hi Jillian,

for now I strongly suggest you contact Proz.com through a support ticket and ask them if they can intervene on your behalf. Just explain your case.
As far as the "law" is concerned, it's always a last resort. I only had to do this once. Not easy and very inconvenient.
Hit them where it hurts, so to speak, is much better. There are additional websites where you can blacklist unreliable companies anonymously.
If it can't be resolved by Proz.com, make your blueboard entry if you haven't yet. Even after you get paid, be sure to make a blueboard entry. It can lead to the company being banned from posting any more jobs on Proz.com. But the company is aware of it in any case and should be.

For the future: Sam's suggestions and answers are very good.

Plus:
Agreement:
Always have an agreement form for your clients that includes your late payment policy, the rights you reserve for yourself, early payment discounts, estimated delivery date for the translation etc., sign it and have them co-sign it and ask them to send it back (Microsoft Word format will do). Then make a PDF copy and send it to them as an acknowledgment of their order. Ask the client to confirm receipt and terms of that file.
I only work according to that agreement form.

Invoice:
Include the late payment and additional rights reserved as stated on the agreement form.

For big projects: always ask for down payments. Exceptions if you can find them as "5" and as early payers on blueboard. But my advice is "better safe than sorry." I tell everyone that an agreement form serves as security for them and myself and is simply part of my policy.
For any project: don't have a 45, 60 or even longer grace periods for payments. You'll get people who can't or won't pay.

Let us know how it goes.

HTH

B

[Edited at 2013-10-24 15:24 GMT]

NB: Late payers and those who stipulate 60 day payment policies on job posts are usually very low payers.
Example seen before:
€0.01 EUR to €0.03 EUR per word
Payment 60 days after date of invoice.

[Edited at 2013-10-24 15:27 GMT]

[Edited at 2013-10-24 16:25 GMT]


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Jillian Pandor
United States
Local time: 03:12
Spanish to English
+ ...
TOPIC STARTER
@Bernhard and updates Oct 25, 2013

First of all, thank you SO much for such great advice (thanks so much to everyone else as well!!).

To keep you updated, I did send a support ticket through ProZ.com and was basically told that since they are the venue, there is not much they can do on the matter. They rely on the comments on the blue board and if they fall below X amount, then the company will receive a warning, and if the behavior continues, the company will no longer have rights on the website (at the discretion of ProZ.com).

Although they can't get involved in such matters, I do think it is important that they know what's going on.

I left the blue board comment as of last night. Surprisingly, I haven't heard anything from the company asking me to change it (which I won't). When I left my comment I also filed a complaint though ProZ.com in a form that popped up (after having left the lowest score possible) about non-payments. Last night I also sent a burofax which should get to them by Monday.

I am trying to be as active as possible with respect to all of this, as you can see.

Bernhard, the agreements and the advice that you have provided about invoices and big projects is MUCH appreciated!

I am just wondering...and if you prefer to answer this through PM (or not at all), I understand. Do you find a lot of companies that post jobs through ProZ that are willing to go through such lengths (agreeing to your policy, signing the agreement, providing down payments for large jobs when you haven't previously worked together)? Or are these clients that you have had for years?

I think it's great, and I obviously agree, but like I mentioned earlier (either in this forum or in the other one) lately I seem to be finding a lot of companies that want to pay the LOWEST rate possible and they want the job done as FAST as possible (leaving little room for quality...both in the translator that accepts such a non-professional rate and in the lack of turnaround time).

Therefore, when I finally find companies that accept my rates (which in my opinion are not at all high, but at the same time they aren't ridiculously low) I find it incredibly difficult to even get the billing information out of them because they are in such a "rush" most of the time and really just can't be bothered with questions (although I obviously never consider starting a project until I have such information). The impression that I get a lot of times from the agencies is that as a translator you are completely replaceable because there are plenty of people that would do the job for less money (putting aside quality), so if you make things the slightest bit complicated for the agency, like having to sign papers etc., they want nothing to do with you.

Maybe I'm wrong (I hope so!)...these are just my impressions. I was just wondering if you have any thoughts on that and if you have any ways of getting the agencies to collaborating in agreeing to your terms. It could very well be just a matter of finding the right agency for you.

Thanks again and kind regards!


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