Paying freelancers late has become the norm. Can policy updates and smarter payments reverse this?

For contractors and freelancers, not being paid on time has become surprisingly common, and it can leave those on the receiving end feeling as if they're not a priority. Payments not arriving on time make it difficult to financially plan ahead too.

While there can be multiple blockers to paying freelancers on time — like breakdowns in communication across internal teams that process payments, or teams that handle and sign off budgets — the lack of urgency that seemingly underpins them all is a blanket theme.

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Late payment culture: lack of urgency meets “not my problem”

Non-payment and missed payments are like a collective, ongoing shared story for the freelance community. Remote's Contractor Management Report 2025 points out that 85% of freelancers have their invoices paid late at least some of the time. 

Worse still, the same data reveals that just over 21% of freelancers are paid late (or not at all) over half the time — so, more often than they’re paid on time.

Outside of late payments, addressing a complete lack of payment can be daunting for freelancers. Options when it gets to this stage cost them more money, on top of the deficit lack of payment has left in their available funds already. Plus, in some cases, it can result in clients refusing to work with them again, now perceived as “difficult”.

As to why late payments have become so prevalent, it’s a mixture of a lack of repercussions, inefficient internal management processes for freelancer payments, and departments shying away from taking responsibility (in short). 

The “I don’t know anything about this” scenario is something many contractors and freelancers know all too well. This is how it often plays out: 

• An invoice is sent to a freelancer’s direct company contact.

• Standard net 30 terms are usually outlined on the invoice.

• Payment is not received promptly by or on the due date.

• When enquiring about the missed payment, the freelancer is either met with radio silence, told that it’s a matter for the finance department, or that they had not followed a complicated invoice submitting process that involved multiple forms (that they were never told about at the time of work being agreed, or the invoice being submitted).

Outdated payment software makes it worse

Remote’s most recent Contractor Management Report data also reveals that 49% of companies rely on in-house tools and systems, like manual spreadsheets, to manage contracts and billing for freelancers.

This archaic approach is about as efficient as using a carrier pigeon to send an email. The end result is administrative chaos, delayed payments, and a risk of clients being on the receiving end of legal action. Reputationally, this doesn’t look great either.

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The disconnect: payroll vs off-payroll payments

Full-time employees typically enjoy predictable paychecks and direct deposits. But freelancers often find themselves chasing payments like contestants on a never-ending gameshow.

Freelancing or contracting by nature have less predictability and stability around frequent, regular, ongoing payments — because they're defined by singular projects and shorter term stints, working for different companies. 

Plus, there’s no guarantee or promise of ongoing work, even if freelancers deliver brilliant results. But this shouldn’t feed into being paid for work that has been agreed and completed, with clear time period terms for swift payment.

Employees are seen as long-term investments, while freelancers are often treated as temporary help — despite often bringing in special skill sets that are vital to bringing projects to the finish line with stellar results. Skill sets that a company’s workforce does not have, and are not always easy to come by. This subconscious mindset can fuel lax attitudes towards timely payments for contractors.

Legal policy: 'Freelance Isn't Free'

In response to this culture of pervasive late payments, legislative measures emerged and continue to do so (albeit, slowly). New York City's ‘Freelance Isn't Free’ Act (FIFA), launched in 2017, was a pioneering law mandating written contracts and timely payments for freelancers. 

Fast forward to August 28, 2024, and New York State expanded these protections statewide, reinforcing the commitment to fair treatment for independent workers.

How does the New York ‘Freelance Isn’t Free’ Act work?

New York’s FIFA provides freelancers with key protections against non-payment, delayed payment, and contract breaches. Under the law, protections are outlined like this:

• Freelancers who are hired for work worth $800 or more (either in a single contract, or accumulated across multiple contracts within 120 days) must have a written contract specifying the scope of work, payment amount, and payment deadline.

• Clients must pay freelancers within 30 days of completing the work, unless a different timeline is specified in the contract. If a client fails to pay, freelancers have the right to file a complaint with (if New York City based) NYC’s Office of Labor Policy & Standards (OLPS). If a freelancer wins a case, they can recover double damages, attorney’s fees, and additional penalties for retaliation.

• Retaliation against freelancers who assert their rights — such as blacklisting or refusal to work with them again — is explicitly prohibited under the law. Companies found in violation can face civil penalties, creating a more robust deterrent for non-compliant employers.

Beyond New York, other states have begun implementing similar protections. ‘Freelance Isn’t Free’ type acts have been proposed or enacted in states like Illinois, New Jersey, and California. They aim to extend legal safeguards and standardize payment practices across the U.S. long term.

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Los Angeles’ Freelance Worker Protections Ordinance

Effective July 1, 2023, Los Angeles implemented the Freelance Worker Protections Ordinance, requiring any contract between a hiring entity and a freelance worker — valued at $600 or more within a calendar year — to be in writing. Plus:

• Contracts must detail the services provided, payment amount, and due date.

• If no due date is specified, payment must be made within 30 days.

• Freelancers are entitled to 2x the unpaid amount in damages if payment is late.

• Retaliation by hiring entities is strictly prohibited.

California Freelance Worker Protection Act

Building upon local efforts, California enacted the Freelance Worker Protection Act (FWPA) on September 28, 2024, taking effect on January 1, 2025.

This law mandates written contracts for services valued at $250 or more, detailing the services provided, compensation, payment terms, and both parties' contact information. The FWPA also includes requirements for:

• Payment within 30 days unless otherwise specified in the contract. 

• Freelancers can file complaints with the California Labor Commissioner’s Office, with rights to recover unpaid compensation, damages, and legal fees. 

• Protections against retaliation for freelancers asserting their rights.

Similar policies have been rolled out globally

Beyond the U.S., other regions have taken action within the last five years too — to a lesser extent.

• In the UK, the Small Business Commissioner has enforced stricter late payment penalties under the Prompt Payment Code since January 2021, mandating that large businesses pay invoices within 30 days to smaller suppliers, including freelancers. 

• In Spain, the Late Payment Law of 2021 introduced automatic interest on overdue payments and established a 90-day maximum payment term to protect independent contractors within the road transport sector.

• In the Philippines, the Freelancer Protection Act of 2023 grants freelancers the right to formal contracts, timely payments, and legal recourse against non-paying clients, echoing the core tenets of similar U.S. acts.

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While these legal frameworks are a step in the right direction, there's still a long way to go. Laws are only as effective as their implementation, and many freelancers lack the resources to benefit from these policies in full.

Automate paying on time with better pipelines

Bringing payment systems in line with the most recent possibilities is the easiest part to fix here.  Relying on outdated, manual processes is a stressful, unnecessary barrier to timely payments, because automated billing and contract management tools have arrived.

This means swift freelancer payments, automatically, on time, consistently, from anywhere in the world, to anywhere in the world — with reminders, integrated financial tracking, and multi-currency support built in.

Smart contract-based payments are also on the rise. These blockchain-powered agreements are structured for payments to be released immediately upon project completion — with less need for freelancers to depend on a client's internal payment process running smoothly.

Call to action: Get the right tools to pay on time

The freelance economy represents a fundamental shift in how we work. As this sector grows, so does the imperative to address the systemic issues plaguing it. By upgrading policy, and taking on smarter payment practices — an environment where freelancers are valued and compensated fairly is doable.

Freelancers bring their expertise to the table, the least clients can do is bring the check, on time.

Whatever administrative and budgetary reshuffling needs to be done to meet this basic obligation, the time is now. If clunky invoice processing and payment software is holding you back, the time to switch to a faster, precise payment system was yesterday.