Pay What You Owe

I’ve recently heard from several colleagues who have been having trouble getting paid from the colleagues who engaged them. I hear from folks like this all throughout the year, but even more so recently for some reason.

Seems to be an epidemic going on. They’re frustrated, not sure what to do and wondered what I think about it. So here are my thoughts on the whole topic…

It’s bad enough when to get stiffed by clients. It’s adding insult to injury that they have to worry about this from their own colleagues.

I think it’s reprehensible and unethical to withhold payment from subcontractors because you are waiting for payment from YOUR client.

YOU engaged your subcontractors, not your client, so PAY THEM fair and square.

And if you don’t have the money, then maybe you shouldn’t be engaging them in the first place.

But subcontractors, you aren’t off the hook either…

Have colleagues who want to engage you sign YOUR contract, and YOU decide what rate you will accept. Just because you subcontract doesn’t mean you have no say-so about how and when and what you get paid—but these things need to be established upfront.

That said, you don’t have any business talking about money or accepting work directly from clients that belong to the colleague you are engaged with.

If you’re going to be ethical about this, then you need to inform any clients who approach you in this manner that they need to go through the proper channels and talk directly with the person whose client they are—and that’s not you. Those clients are not your clients; they belong to the person you are subcontracting for.

This is yet another reason why that whole “team VA’ term is so ridiculously idiotic. Unless you are an actual employee, you are not part of anyone else’s “team.” So stupid.

Never include in your contracts, or sign any contract that has this, any clause that says you don’t get paid until the client pays the colleague you are subbing for. If you do, then you’re stuck waiting or not getting paid if their client doesn’t pay on time or at all.

And if you do sign a contract like that, don’t complain when you don’t get paid. You’re the one who signed it.

From a business standpoint, this is yet another example of why YOU have to be smart in your OWN business.

I get that some folks think this is the experience they need to gain confidence to go out on their own, and sometimes you gotta do what you gotta do to help keep some money flowing in. But never lose sight of the fact that when you are working for others (i.e., subcontracting), you’re building their business, not your own.

You’re paid less, you lose a great degree of control over your circumstances, and you waste time and energy that could be spent growing your own client base and long-term success.

My advice (if you’re still nervous about engaging directly with clients):

Stop with the subcontracting and instead look for colleagues who want to engage you as their own support partner in the same way that any other client would retain your ongoing support. You would charge them your full monthly fee just like any other client and you’re going to learn a lot more about the business, managing it, and what it is to provide ongoing administrative support than you ever will doing piecemeal, nickel and dime subcontracting projects.

5 Responses

  1. Hi Danielle,

    There are quite a few awesome/clear points in your article. The underlying thought and point seems to be the fact that no matter what industry you are in, you must respect yourself and your intellectual property. Feeling like a ‘newbie’ or being treated like a ‘newbie’ is tantamount to bullying. You must decide early on if you are in business. Obviously a different mindset is required; in my opinion there is no difference between outsourcing to anyone, anywhere in the world if the chief objective of the person hiring is to rip someone off.

    I agree with you, Danielle. If you are going to provide subcontracting work, make sure it is worth doing and legitimate work. I really despise being advised that work is from a client when in fact it is subbed out sub work that no one in their right mind would do. Of course, this type of work always arrives with a free insult because the quality of instructions and so on is below standard. Clearly following integrity and ethical rules this is rather an illegal practice and what do you think? Is it bullying? So true, Danielle why stiff your colleagues? It is rather disgusting in my view.

    Mindset is important thanks for bringing up this topic.

  2. I have to completely agree with you.

    I used to be a Virtual Assistant, (I say used to because I am transitioning away from that toward writing and blog support, but I do have one client left) and now I outsource any work that is other support work that is not writing unique content or WordPress based anyway…. I fully and loudly agree with you.

    I think it is appalling to hire someone and not pay them until you get paid that is ridiculous.

    I don’t hire anyone if I don’t have the cash on hand RIGHT THEN to pay them, and I wish others would do the same. I run into clients all the time who don’t want to pay, the last people I would expect not to pay are other VAs, and contractors, but it does happen.

    Another issue is that I have a form that writers and also VAs fill out if they’re interested in subcontracting, on it I state to get an EIN, but you’d be shocked at how many put in their social security numbers for the W9 form. Of course I keep their info safe, but it scares me who can get that info because not everyone is honest.

    Thank you for telling it like it is!

  3. Arlene says:

    I’m too afraid to even comment as I’m going through the exact same thing. Funny thing tho’, I had to initiate an agreement in writing on email and Skype tho’ not my official agreement. They agreed to all my payment terms and even stated in writing that they would be paying me, to date have still not paid me as they apparently waiting for client to pay them. It sickens me to think that I may have to go the legal route as we are a new industry and should not be suing each other however they stated they don’t care, I’d CARE especially if my reputation is at stake. I doubt I will do business with this South African group again or any other VA’s! Just shows, there is no such thing as waivers and favors or friendship in this industry!

  4. Oh, that’s a tough situation for sure. I know it can leave a bad taste in your mouth. But there ARE good people out there you can trust who will treat you honestly and ethically. Don’t let one bad group sour you on all the rest out there.

    Plus, moving forward, this might strengthen your resolve to focus on building your own business and not waste time dinking around with subcontracting that only build someone else’s business.

    Or, if you did ever decide to take on any subcontracting, you know some of the pitfalls to avoid in the future and get those understandings and expectations worked out upfront… perhaps even require payment upfront. I did that on those occasions back in the day when I did a few subcontracting gigs.

  5. Thanks honey. Ironically, they agreed to my upfront deposit payment of 50%, sent me proof that the client was depositing (what they forgot to say is the client was paying into their bank account)and then renaged when I was already at the venue. I sent them professional quotes and invoices all of which they accepted as they never disputed it. I am the only one who has all the agreements in place as opposed to them who have none so am in a good position to hand them over which they even had the audacity to welcome (tells alot about the calibre of organisation). Fridays are my day off to do whatever I wish 🙂 so I just thought, what the hell, let me take the assignment. Has that bit me in the arse. I’m not into subcontracting as I don’t believe in it really as I then may just as well become a temp/contract worker for a major corporation lol 🙂 (no offence). I am however blogging on this and have re-published your article as I would love to share this experience for VA’s who do sub-contract and perhaps share the legalities out there for recourse. South Africa is a country wrought with mistrust so to have a VA organisation out there exploiting other VA’s will not sit well with the readers who subscribe to my blog! We are trying everyday to rebuild our country as it is beautiful! Have an awesome weekend further, Arlene

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