Can your freelancers be legally bound?
Updated: Jul 12, 2019
With remote working and the gig economy on an exponential rise, let's figure out how to keep the crazy ones in check.
The freelance writer is a man who is paid per piece or per word or perhaps. - Robert Benchley
We get it. Earning a living as a freelancer isn’t easy.
But this is really about the freelancing ecosystem. After all, despite being a fan of the flexibility and ease that freelancing provides, I’d still prefer a bit of ordered chaos.
And the world of freelancing does need some structure, eh?
If you're a business owner, you're more than familiar with the process of hiring employees. It's a tiring one, you'd agree. Multiple rounds of interviews, negotiations about the salary, KRA, timings, etc. And when the candidate is finally on board, there's this whole thing about the differences in working styles, deliverables, timelines etc. It's just a very elaborate (sometimes unnecessary) process just to get your company a resource to carry out a task.
If you're someone who agrees with that parenthetical remark, you've definitely tried out alternative sources of getting work done.
Hiring a freelancer is the best, most suitable alternative to that. Yes, the gig economy is thriving, and if you're getting your news from the right sources, you'd know that it's not-so-slowly becoming the default way of working. So, for those who've been caught up in managing your employees, here's a quick guide on what the gig economy is all about.
A person who is economically dependent on a single employer can be called an employee, roughly. Whereas, a freelancer is a person who works with multiple clients on a contractual basis. These two definitions quickly give rise to a lot of interpretations:
The employees can be imagined as slaves who're at their masters' disposal around the clock, and waits for holidays to be approved.
And the freelancers can be thought of as independent individuals who're in complete control of their social, personal, and financial lives, and are veterans in vacationing!
But, it’s not the black and white. There’s a gray area, and that’s where law thrives.
To wind back to the question, 'can your freelancers be legally bound?', or if there is a proper legal framework that supports this transaction. Well, there may not be an exclusive governing body for freelancers and freelance work, there certainly is a procedure to follow when carrying out such a transaction. Following which, you can legally bind your freelancer.
Working with freelancers is a cheaper, faster, and less liable alternative, especially for startups and small companies. The first and the foremost document to put in place if you wish to legally bind your freelancer is the contract. Many startup/business owners skip this step because the freelancer is a former colleague, was introduced by a good friend, or is a well-known name in the industry. Skipping the agreement part is like never signing on the on-boarding papers when starting a new job. A contract is the best way to get on the same page with the freelancer. It ensures that the scope of work, timelines, payment, payment terms, etc. is agreed upon mutually. It's a great way to avoid 'I said, you said' situation in terms of how much work has to be done and when does it has to be done.
Another important thing to keep in mind while making the contract is the ownership of work. The freelancer you choose to work with, might be an expert in the field, but since you're hiring them to work for you in exchange for money, the ownership of the work they create should remain with you. The contract helps you in case of malpractice, breach of terms etc. for which you have legal solutions at your disposal.
The second in line of documents is the Non Disclosure Agreement, or NDA. Today, the pace at which products, services, and ideas are being brought to life, there's little space left to come up with something that is unique, and unheard of. In this landscape, whatever you have, you want to protect it with all that you've got. For instance a team of employees is more reliable in this context simply because you provide the space and equipment to work. You 'own' the surrounding in which they create. With freelancers, this may not be the case. Which is why, a non-disclosure agreement proves useful as it protects your valuable information from being leaked to the public, potential competitors, other players etc.
So, before you jump at the idea of doing business with freelancers now that you're aware of the processes and legality that surrounds it, take some time to consider carefully what your business requires - a freelancer, or an agency? Freelancers may sound like an economical option for many, but the validity of contracts, agreements etc. differs from country to country. It's best to check with your lawyer first, than just making a set of documents yourself. It's a pity the gigonomy (we're calling it that) didn't exist back when Edison was looking for employees, maybe he could've roped in Nikola Tesla to work on a project or two. That is, if Tesla ever agreed to.
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