Good news for UK freelancers chasing unpaid invoices
Key Points
- Freelancers could get a legal right to written payment terms
- Right would apply to work for businesses, not householders
- Minimum contract length or value thresholds are under consideration
- Late payments cost the UK economy £11 billion a year
Freelancers could get a legal right to written terms setting out what they will be paid and when. The Department for Business, Innovation, Science and Trade proposed a right to a written statement in a consultation published on Wednesday (14 October).
No law currently requires anything about a self-employed engagement to be in writing, which leaves some freelancers working for long periods without knowing their pay or payment terms.
The proposed statement would include:
- The engager’s name
- The self-employed individual’s name
- The scope of the work
- The expected period of the work
- Payment terms, including how much and when
- Terms for termination
- Any other details both parties agree to include
A written contract containing the same information would meet the requirement, so engagers would not need a separate document.
The government said the statement would make it harder for engagers to dodge the payment terms they committed to.
The right would cover freelancers providing services to businesses, not private individuals hiring someone for work at home.
The department gave examples of make-up specialists working on TV productions, dancers touring with artists and IT contractors upgrading business systems. A householder hiring a window cleaner or landscaper would not have to provide a statement.
The government is weighing qualifying criteria such as a minimum contract length of one week, four weeks or three months.
A minimum contract value is another option, which would exempt short or low-value jobs from the requirement.
The proposals sit alongside separate legislation on late payments, which the government said cost the UK economy £11 billion a year and close 38 businesses every day.
“We are legislating to end the scourge of late payments, giving the UK the toughest laws on late payments in the G7 and ensuring that small businesses and the self-employed are paid on time,” said Kate Dearden, Minister for the Future of Work.
The UK now has 4.4 million self-employed people, 15% of the workforce, up from 4.2 million at the start of 2021.
The consultation also asks whether self-employed people should gain protection from blacklisting over trade union membership and from detriment when they leave dangerous workplaces.
