Independent contractors make up a significant portion of the U.S. workforce. In May of 2017, the share of workers who fell into this category was between 1.3% and 3.8%. Many of these employees do business in California, and while working as an independent contractor does have its perks, there is also the downside that a client may not always pay on time or at all.
First and foremost, it is vital for independent contractors to set up contracts with everyone they do business with. This contract should lay out precisely when the employer will pay and how much it will be. Independent contractors should never just take someone’s word that they will receive payment for services rendered. In the event an employer fails to pay, a freelancer can take steps, such as filing a wage and hour claim.
Go to small claims court
In California, a person can take someone else to small claims court to collect as much as $7,500. Limited liability companies and corporations only have a limit of $5,000. In the event the independent contractor is successful in winning the case, there is still the matter of collecting payment. The company may be hesitant to pay right away, and there is the issue of time. The freelancer may need the money right that second, but it can take a while to get a hearing in small claims court.
See if the company filed for bankruptcy
A common excuse a company gives for failure to pay is that the business went bankrupt. While it may seem hopeless, bankruptcy regulations still require the company to pay all employees who need to receive money. This includes independent contractors. All parties should receive these funds within 180 days. Any parties involved can receive up to $10,000. Again, it can take a while for freelancers to receive payment, but it is better to pursue these claims to try to get some money eventually.