Freelance Files: Using Late Fees To Get Media Clients To Pay on Time
By Karen Schaefer
Last May, freelance journalist Wudan Yan returned from four weeks of travel to discover that contracted payments of $5,000 were overdue for work she had already published with three different media clients.
|Freelancer Wudan Yan fought payment delays with late fees. Photo: Ramon Dompor. Click to enlarge.|
Yan, a member of the Society of Environmental Journalists living in Seattle, Wash., has had her stories appear in California Sunday, Discover, Harper's, High Country News, The New Yorker, The New York Times, among others.
But now, her bank account was nearly dry.
“I was away from my desk and not working for most of the month, so it was not only that this $5,000 was late, but I’m now short two months of buffers,” explained Yan, who has always been careful to budget her income to meet her expenses.
She knew that even if she immediately contracted for more work, her next checks wouldn’t come until July. In the meantime, she had rent, healthcare and credit card payments to make.
Yan acknowledged that she had suffered from smaller late payments before, as many freelancers have faced. But this was momentous. “[It] sent me into a panic and it inspired me to take action,” Yan said. “Having been $5,000 short was a wake-up call.”
Late fees as a form of interest
So after the initial shock, Yan decided she needed to solve a dilemma that faces many freelancers.
She immediately wrote emails to all three of her media clients to remind them of their promises to pay within 30 days. And to those requests for payment, she added 20% late fees.
“I know that professionalism and sticking with the facts goes a very long way,” said Yan. “And I couldn't see why this philosophy couldn’t also extend to getting the money that I was owed, but also late fees.”
Yan saw late fees not so much
as a penalty, but as a form of
interest that paid for her effort in
following up on overdue payments.
Yan said she saw late fees not so much as a penalty, but as a form of interest that paid for her effort in following up on overdue payments and floating that hourly rate to her clients.
But she says her media clients didn’t immediately see it that way. One wrote back:
I completely understand that it's frustrating to not get paid within 30 days and our apologies for the delay in payment. Since our accounting team is processing a high volume of invoices sometimes there is a slight delay. We do not pay late fees, but we are operating in good faith here and [REDACTED] is doing her best to have accounting pay it out ASAP.”
Yan said she couldn’t understand why clients who had breached their own legally-binding contracts would object to paying a late fee. She’d seen that other freelance colleagues had used late fees to good effect when clients didn’t cough up on time.
Standing her ground
But Yan admitted the idea worried her a bit.
“A lot of people are like, ‘Wow, I don’t want to send [a request for] a late fee, because maybe I’ll sever relationships with this client or editor. I can’t allow the possible number of my outlets to dwindle’,” she said.
“But I don’t see it like that,” Yan added. “I see it as my work is journalism, but as a freelancer, this is also a business. And late fees are a part of that business, especially when contracts, especially net-30s [agreements to pay in full on or before the 30th calendar day after services were provided], don’t pay on time.”
So she gritted her teeth and tried again — and got results. One contractor paid her overdue fee of $1,000 in early June. A few days later, it also paid her stipulated late fee.
Yan’s largest client, who owed her about $2,800, took a little more convincing. In an email, the client wrote to her that since late fees hadn’t been part of her original contract, it couldn’t pay them.
But Yan stood her ground. Her reasoning was this: That her client, by being late in paying her, had essentially required her to take out a loan to pay her own bills, a loan that accumulated interest. And she didn’t see why a freelancer should pay for the interest that would never have accrued had her client paid her on time.
Yan pointed out that late fees are standard in other industries, including credit card companies, landlords and healthcare providers.
She got a lawyer friend to write a demand letter pro bono — and the magazine settled.
Encourage editors to track payments
Late last year, Wudan Yan wrote an essay on social media about her experience in holding media clients accountable. She said she got virtually no feedback from media outlets, but quite a lot from private citizens, who felt she was asking too much for late fees.
After swallowing her anger, Yan decided to respond in a professional, fact-based way.
‘I really don’t think that sometimes
billing a client for a late fee means
that you’re being unprofessional.’
— Wudan Yan,
“I estimated how much I would have to pay in penalties, and then how much time I would have to spend in following up on these late payments, based on my hourly rate,” she recounted. “And what I found was that that 20% that I was charging in late fees actually wasn’t enough.”
Yan said mostly she got positive feedback from people who appreciated her sharing her story. And she advises other freelance journalists this way: “I really don’t think that sometimes billing a client for a late fee means that you’re being unprofessional.”
She suggested that, for starters, freelancers should always get a contract before agreeing to a job. And encourage editors to make sure that accounts payable staff pay freelancers in a timely fashion.
“It’s not like these things are completely out of our control,” Yan said. “I think we should all have a stake in this somehow.”
Karen Schaefer is a freelance journalist and independent radio producer based in Oberlin, Ohio, who focuses her environmental reporting on Lake Erie issues. She is editor of SEJournal's Freelance Files column. Contact her with story ideas at email@example.com.
* From the weekly news magazine SEJournal Online, Vol. 5, No. 17. Content from each new issue of SEJournal Online is available to the public via the SEJournal Online main page. Subscribe to the e-newsletter here. And see past issues of the SEJournal archived here.