Reader: For the past seven years, I have worked as an independent contractor for a small Web-based business. My contract loosely defines my work as “consulting services.”
I charge on an hourly basis and I’m certain I’m underpaid. I’ve checked salary ranges for my position, and I earn about 75 percent of the average salary for this position. This isn’t a big issue for me. I’m more concerned with the additional assignments. I’m not interested in increasing my workload. I declined several requests over the past year, but I know the company’s manager wasn’t pleased.
How do I diplomatically say “No” without jeopardizing my standing with the company?
Karla: As workers are rethinking the limits of what they will accept in exchange for their labor, and employers are scrambling for workers to fill jobs at minimal cost, independent contracting and gig work are increasingly common solutions. In an ideal world, these arrangements benefit parties on both sides of the contract: Employers get to have someone fill a specific task without having to deal with the overhead costs and rules of full-time employment. Independent workers get a measure of control over what jobs they accept, what rates are worth their effort, and when and how they get the work done.
You, however, seem to be facing the worst of both worlds: lower pay plus obligations you can’t refuse. You’re ceding so much control to the client, you might as well be a full-time employee.
The blame for this lies in your vaguely worded contract. Without an itemized breakout and defined scope of services, your client can shoehorn a lot of demands into the “consulting services” category and then claim you’re not honoring your contract when you push against specific requests. And with each new manager who comes along, demands are only going to increase.
In rethinking your contract, figure out what your core offerings are — coding? sales? bookkeeping? — and what a fair price is for each service, with a markup to cover your costs for health care and taxes. Be specific about what each service includes, what constitutes a finished product, and timelines for making changes. Any requests outside the original scope of work or after the deadline for changes will incur an added cost.
For tasks that aren’t the best use of your skills, figure out how much you would have to be paid to make it worth your time and effort and charge that. For services you don’t want to or can’t provide for any amount of money, start building a network of specialists you can bring in under a subcontract.
The goal is to replace every “Yes” or “No” with a “Yes, but”/“No, but”: “I can take that on, but it will be billed at an additional rate.” “I don’t do that kind of work, but I can bring in someone who does.” You can decide how flexible to be on a case-by-case basis, but the contract will set a baseline that keeps you from giving away too much. You’re still solving problems for your client but without creating more for yourself.
Of course, I can’t predict how your client will react to having their all-you-can-eat deal replaced with a limited a la carte menu that includes upcharges for add-ons. It shouldn’t come as a surprise, though; costs of goods and services are going up everywhere thanks to supply chain delays and inflation. Even my local pizzeria has announced it’s having to raise menu prices. Your best bet is to be transparent and give notice of the changes before your contract is up for renewal, leaving some room for negotiation.
Saying “no” to an important client is always tricky, but taking on more work free of charge is bad business and may also be undercutting other contractors in your field. A detailed contract makes clear the value of all the services you provide and gives you a consistent rule book to refer to, no matter how many changes your client’s management goes through. It also protects your client by making sure you’re giving them their money’s worth and performing tasks to their specifications.
And remember another important benefit of being an independent contractor: If all else fails, you can fire bad clients.
Pro tip: A consultation with a lawyer may help you come up with standard contract language. Freelancers Union (requires free sign-up) is also a good source of advice and insights for contractors and gig workers looking to manage clients’ expectations.