Experts offer practical solutions for freelancers facing payment disputes.
Steps to Take When Your Client Refuses to Pay
Freelancers often find themselves in a difficult situation when clients refuse to pay for services rendered. A recent case with creative agency GetCraft highlighted how even established companies may delay or avoid payment, citing cash flow issues. Freelancers facing such problems can take various steps to recover their earnings and avoid future complications.
1. File a Claim at the Small Claims Tribunal
If your client is based in Singapore, you can file a claim at the Small Claims Tribunal. This process is simpler, faster, and more affordable than initiating a lawsuit. The filing fees start at just $10 for claims up to $5,000, with higher fees for larger amounts or business-related claims. The Tribunal allows claims of up to $20,000, and the limit can be raised to $30,000 if both parties agree. It’s important to file within two years from when the payment was due.
2. Seek Legal Advice If the Client is Overseas or Bankrupt
If your client is overseas or in bankruptcy, you cannot file a small claim. In these situations, you will need to seek legal advice for further action, and possibly pursue the case through the High Court if applicable.
3. Band Together With Other Freelancers
If you are not the only one owed money by the same client, banding together with others can help reduce legal costs. Hiring a common legal counsel will save on individual legal expenses. You can also reach out to the Law Society or Community Justice Centre for pro bono or low-cost legal services.
4. Join a Freelancers’ Association for Support
Freelancers can become members of organizations like the Visual, Audio, Creative Content Professionals Association (Vicpa), which offers access to legal consultations for work or contract-related issues. Membership fees are $117 per year, and the association provides services such as NTUC legal clinics for freelancers facing disputes.
5. Consider Legal Action with Caution
Legal action, while an option, may not always be worth the expense. Legal costs can quickly accumulate, and even if the court rules in your favor, your client may still refuse to pay. This makes it essential for freelancers to assess whether pursuing a lawsuit is worthwhile.
6. Conduct Due Diligence on Prospective Clients
To protect themselves from problematic clients, freelancers should always perform due diligence. Check the client’s business profile through the Accounting and Corporate Regulatory Authority (Acra) website, and ask others who have worked with the same client about their experiences.
7. Written Terms of Service
A major red flag is a client’s reluctance to provide written terms of service. Always insist on having clear agreements in writing to protect your rights and avoid misunderstandings.
8. Be Aware of Limited Help from Authorities
Finally, freelancers should be aware that the authorities are unlikely to help recover unpaid wages unless there is clear evidence of fraud or criminal wrongdoing.
