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You’re Not an Employee Anymore (So Stop Acting Like One)

2 animals playing boss vs employee

You might have a dozen or more reasons for becoming a freelance, or contract, writer. You’re a laid-off journalist who decided to go out on your own. You’re a business writer who wants more control over what you write and for whom. You’re a retired engineer who discovered writing as a second-career. The reasons aren’t important. But how you handle your freelance role with clients is.

The boss-employee relationship that sustained you in the workplace (or drove you out) isn’t part of the freelance “landscape.” You and your clients are business collaborators. You’re not looking to get on your clients’ payroll, health care plan or employee-picnic roster. And if your clients are savvy about workplace laws, they’ll see that you don’t (more on the law later). “Collaborator” means you two are equals. Clients need your services and you want their business.

 Self-employment Tax

You might not think of yourself as your clients’ equal in business, but the Internal Revenue Service does. The agency assesses a self-employment (SE) tax on people who work for themselves. The tax pays for Medicare and Social Security payouts in retirement. The rule applies to all independent contractors and sole proprietors who earn more than $400 in a tax year. Remember those FICA (Federal Insurance Contribution Act) deductions from your pay when you were someone’s employee? Now you’re responsible for figuring out and paying the tax.

Your freelance status has an advantage, though. You get to deduct businesses expenses if you meet certain guidelines. Deductions lower you taxable income. A percentage of the utilities used for your home office might be deductible. The replacement cost of your aging computer or printer might be, too. The IRS calls these deductions the “employer-equivalent portion” of the SE tax. If you’re taxed like a business, it pays to act like one.

 “Employee vs. Contractor” Law

Federal labor law is another reason you should act like a business and not your client’s employee. The National Labor Standards Act is clear about who’s an employee and who’s an independent contractor. You’re a contractor if you…

  • Work under a business name
  • Have a business banking account
  • Use your own tools and set your own work hours
  • Work with more than one client (or hope to)
  • Maintain business records
  • Bill clients for work you complete
  • Market your services

An employee…

  • Has an employer
  • Does work controlled or directed by someone else, usually a manager or supervisor
  • Receives job training

Which description fits you? The FLSA penalizes employers who treat contractors like employees. Violators often owe contractors back pay, including overtime and minimum wages, and must pay back taxes and penalties on FICA and income taxes. Courts have found companies liable for contractors’ health care coverage, workers’ compensation, unemployment insurance and retirement benefits. Treating contractors like employees is not only against the law, it also diminishes your role as a business operator.

 Freelance Job Posts

Most job ads want résumés from applicants. Asking freelance writers for résumés is a head-scratcher. Résumés often mask the skills clients really want by including irrelevant job information. Plus, reviewing résumés is time-consuming, even when they’re scannable. You can target relevant skills and work experience in cover letters, writing samples and endorsements. Résumés are better suited to the work-history-focused employment process than to project agreements between businesses.

Clients have the right to know if service providers can do the job, and whether they’re ethical and reliable. You wouldn’t hire a contractor to renovate your kitchen without asking for references or knowing how other clients’ kitchens turned out. But you wouldn’t provide your own tools for the job or dictate how to do the work beyond your own technical expertise. You’d negotiate the scope of the work, cost and start-and-completion dates. In short, you’d treat contractors like the businesses they are. You should expect the same treatment as a freelance writer.

Caveat: Don’t let résumé requests stop you from applying for work with businesses you want as clients. A résumé could be a small sacrifice for a long and lucrative freelance opportunity.

 The “Business” Attitude

Still stuck in employee mode and not sure how to break free? Run your freelance-writing operation like a business. Start with these first steps…

  • Name your writing service and register it as a DBA, or Doing Business As, with your local municipality. Fees might apply.
  • Order business cards and stationery.
  • Open a separate financial account for your service.
  • Set your fees and design a fee schedule for clients.
  • Draft a form for invoices.
  • Use a financial software program to track payments and expenses.
  • Write a contract protecting your services (e.g., how you handle nonpayment, text revisions, project delays, etc. Get legal help, if necessary).
  • Track tax-deductible business expenses (i.e., mileage, supplies, conferences, memberships, etc.)

One more thing: Business protocol and decorum still matter. Show clients the same courtesy and consideration you gave customers, coworkers and bosses you dealt with in the workplace.

©Val Bolden-Barrett




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