Forums/Working with Freelancers/Rates & Terms

FAQs for clients who hired for less than $3/hr before 11/19/14

Jacqueline Pittenger
posted this on February 10, 2013, 3:41 PM

On November 19, 2014, we introduced a minimum pay rate of $3.00 per hour (including the Upwork Service fee deducted from freelancer earnings) for all new hourly contracts. Please read our community forum announcement for more background.


Details of the minimum rate policy:

New Relationships

Any hourly contract offer extended on/after November 19, 2014 between a client/client company* and a freelancer who has not been previously hired by the client/client company must adhere to the new minimum rate.

* Note: “Client company” is a client account on Upwork that has one or more teams. Any hiring manager on any team within a client account is considered part of the client company.

For example:

  • Marcel (client) and Jodie (freelancer) have never worked together. No one at Marcel’s company has ever worked with Jodie. On November 16, 2014, Marcel tries to make an offer to Jodie for less than $3/hr. He is not permitted to do so because he and his company have no prior relationship with Jodie and the offer was extended after the minimum rate policy went into effect.
     
  • Omar (client) and Christopher (freelancer) have never worked together. On August 27, 2014, Omar offers Christopher an hourly contract of $2.90/hour. Because the offer was made prior to November 19, 2014, Christopher can accept the terms and is permitted to continue working at less than $3/hour if he so agrees.

Pre-Existing Relationships

We will continue to honor the hourly rates of contracts formed prior to this date, and clients and freelancers who have previously worked together at less than $3.00 per hour can form new contracts with no minimum requirement. Specifically:

All current contracts for less than $3/hour will be allowed to continue. For example:

  • Stefan hired Ibrahim to a contract that began on July 6, 2013. This contract is not subject to the minimum rate requirement. Ibrahim can continue working at less than $3/hour, and any future changes to the contract’s hourly rate are not subject to the minimum rate requirement.

A client/client company that has ever hired a freelancer at less than $3/hour may re-hire that same freelancer at less than $3/hour. For example:

  • David previously hired Jennifer at $2.50/hour before November 19, 2014. That contract has now ended, but David can seek to re-hire Jennifer at any time without being subject to the minimum rate requirement.
     
  • Olga is a client with several teams set up in her Upwork account. Prior to November 19, 2014, she hired Andrey to an hourly contract within her “translation” team. Any hiring manager in any of Olga’s teams (not just in her “translation” team) can re-hire Andrey without the minimum rate requirement.

Pre-existing relationships must be with a specific freelancer. Pre-existing relationships between a client/client company and an agency are not considered. For example:

  • Mark, who is a member of an agency on Upwork, was hired at $2.75 by a client company before November 19, 2014. After November 19, that client company can continue working with Mark at that rate, on both the existing contract and any new contracts. However, any new contract the company makes with another member of Mark’s agency is subject to the minimum rate requirement (unless the client has previously worked with that freelancer at less than $3/hour).

Frequently Asked Questions:

Who does this impact?

All new client-freelancer relationships. Please see the detailed terms above.

Are there any exceptions?

Pre-existing client-freelancer relationships formed at less than $3/hour will be allowed to continue outside of the minimum rate requirement as long as both parties so agree. No other exceptions will be made.

When will this policy go into effect?

The policy is effective as of November 19, 2014.

Does a minimum apply to fixed-price jobs?

Fixed-price contracts are not subject to a minimum.

What about trial projects used to vet candidates?

All hourly contracts, including trial contracts, are subject to the minimum rate requirement. You may try fixed-price trial projects if you do not want to be subject to a minimum.

What should I do if I am impacted by this policy?

We do not take lightly the impact this policy may have on all the clients and freelancers who rely on us for their businesses and careers. In particular, we’re sensitive to the relationships our clients and freelancers have already formed with one another. Thus, this policy will apply only to new client-freelancer relationships formed on or after November 19, 2014. We will continue to honor the hourly rates of contracts formed prior to this date.

If you are concerned about the impact this policy may have on your new contracts, you can try fixed-price contracts, which are not subject to a minimum.

How did you decide on $3/hour as the minimum?

After considering the large differences in rates earned around the world -- as well as the diversity of work done on our platform -- we believe $3/hour strikes the right balance between discouraging low-quality work and minimizing disruption to client-freelancer relationships.

Are all freelancers and clients subject to the same minimum?

Yes. As of November 19, 2014, all clients and freelancers will now adhere to a $3 minimum hourly rate charge. Any on-platform rate testing has now concluded.

Why aren’t you enforcing minimums by geography and/or skill area?

We recognize that $3/hour means different things depending on geography, and that different skills in our marketplace are valued at different rates. We are constantly testing levers to improve quality and rates within work categories. However, we are not introducing different minimums for different geographies or skill areas at this time.

Isn’t Upwork a free marketplace for work?

We believe in a competitive market that rewards quality and skill and allows clients and freelancers to easily connect with one another. As with other economies, we have policies to uphold a healthy, high-quality marketplace.

I currently have contracts at less than $3/hour. Can they continue?

Yes. The minimum rate requirement does not apply to contracts that are currently open.

Can I re-hire a freelancer for less than $3/hour if I previously worked with them at less than $3/hour?

As long as you hired that freelancer for under $3/hour before November 19, 2014, you can continue to work with or re-hire that freelancer at less than $3/hour.

If I hired a freelancer for more than $3/hour prior to November 19, 2014, can I re-hire them or change their rate to less than $3/hour after this date?

No. Only contracts that were set at less than $3/hour prior to November 19, 2014 are exempt from the minimum rate requirement.

What if the terms of the contract were agreed to before November 19, 2014, but the work does not begin until after this date?

If the offer was made in Upwork (meaning you accepted the Upwork terms and clicked the “Make Offer” button) prior to November 19, 2014, the contract is not subject to the minimum rate requirement -- even if the offer is accepted and/or work begins after November 19.

If the offer was extended verbally but not made in Upwork until after November 19, it will be subject to the minimum rate requirement unless you have previously worked with that freelancer for less than $3/hour.

How does this change how I work with agencies?

All freelancers, including members of agencies, are subject to this minimum. If you previously hired an agency freelancer for less than $3/hour, your relationship will be exempt from the minimum rate requirement. However, any new relationships you form with other members of the same agency must adhere to the minimum.

Won't this increase costs for clients? Aren't you driving away clients who want to hire at lower rates?

We understand this policy may impact different clients in different ways. Our intention is not to penalize certain clients, but rather to elevate the bidding and hiring practices of our entire marketplace. We believe that setting a minimum will encourage freelancers and clients to expect higher pay for higher quality work.

Is Upwork going to increase this minimum rate in the future?

As with any of our policies, we may re-visit this in the future if we believe it warrants an update. However, we do not have any immediate plans to raise the minimum rate.

 
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