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Hiring Freelancers: the Legal Nitty-Gritty

Unless you are amazingly talented or have a collection of generous and gifted friends, you will find yourself hiring freelancers to transform your manuscript into a book, including editors, designers, and formatters. With all the downsizing in the publishing industry, plenty of top-notch talent is available for hire. (You’ll find many of them right here on… [Read More]

hiring freelancers: the legal nitty-gritty by Helen Sedwick for BookWorks.com

Unless you are amazingly talented or have a collection of generous and gifted friends, you will find yourself hiring freelancers to transform your manuscript into a book, including editors, designers, and formatters.

With all the downsizing in the publishing industry, plenty of top-notch talent is available for hire. (You'll find many of them right here on BookWorks.) Your goal is to find freelance professionals with real-world publishing experience within your genre. Don’t hire a self-help editor to revise a historical novel or a racy romance artist to design the cover for a book about grief.

How to Find the Right Freelancer

Here are some great resources for building your team:

hiring freelancers: the legal nitty-gritty by Helen Sedwick for BookWorks.com Joel Friedlander and Betty Kelly Sargent have put together an amazing resource book The Self-Publisher’s Ultimate Resource Guide. The book lists selected editors, designers, book shepherds, printers, publicists and other pros and includes useful articles on everything from formatting to press releases.

The Alliance of Independent Authors is building a database of vetted service providers for independent authors.

Reedsy.com is developing a curated database of professional editors, designers, and marketers.

Check with local writers’ groups and organizations, particularly any organization of independent publishers. Post questions on writers’ forums and communities, like BookWorks' Publishing Your Book Discussion Group

• If you get in touch with one freelancer who isn’t a good fit, ask for a referral. There’s a network of good people out there.

hiring freelancers: the legal nitty-gritty by Helen Sedwick for BookWorks.com• Online sites such as 99Designs, Upwork, Freelancer, Fiverr, and TheVoiceRealm put hiring freelancers at your fingertips by matching freelancers and projects, often by a bidding system. You’ll get offers from freelancers worldwide, ranging from rank beginners to seasoned professionals. These sites also act as go-betweens for handling payments and approvals.

Prices will vary widely. The most expensive editor, designer, or publicist may not be the best person for you or your book, but the cheapest may be a greater waste of money. Look for relevant professional experience, good references, and an aesthetic style that fits your own.

Contract Basics

Now that you have chosen a freelancer, how do you spell out your mutual expectations or, to put it in legal language, the terms of engagement?

hiring freelancers: the legal nitty-gritty by Helen Sedwick for BookWorks.comThe freelancer may have a form agreement that is no more than a description on a website or an email. These are acceptable forms of contracts even if they are 100% electronic. However, make sure the agreement covers the following items:

What services are expected. Spell out what you expect. The more detail, the better. For example,

line-by-line editorial review for a 80,000-word historical novel; or

internal layout for a specific trim size and/or for an ebook in a list of electronic formats; or

a specified number of rough cover designs, number of revisions, final design in print-ready PDF format and/or Adobe InDesign files; and

timing of deliveries;

number of revisions included in price; cost of additional revisions; and

format of final product.

hiring freelancers: the legal nitty-gritty by Helen Sedwick for BookWorks.comPayment. Is the payment refundable in whole or in part if you are not satisfied? Are there any ongoing payments such as royalties or renewal fees? Any expense reimbursements?

Attribution. Are you required to give attribution such as “Cover designed by XYZ” or “Photographs by ABC”?

Credits. May the freelancer post your cover, illustration, or photo on his or her website? Should the freelancer hold off posting until your book is launched?

Termination. Either party should have the right to terminate the agreement at any time. If the engagement is not working out, it’s better to lose some time and money than to stick with a relationship that is not working.

hiring freelancers: the legal nitty-gritty by Helen Sedwick for BookWorks.comMany freelancers include a “kill fee” in their agreements: if you change your mind and terminate the contract before the work begins, you agree to pay a fixed amount, typically 5 to 10% of the total contract price. This compensates the freelancer for booking you into his or her schedule. A reasonable kill fee is fair.

Communication. Is the freelancer available for phone calls? Is there a limit on the number of calls?

Rights. Your agreements with designers should say the following:

The freelancer represents and warrants that he or she has the authority to transfer the final product to you free and clear of any claims of any third party.

If the freelancer has used anyone else’s intellectual property, such as stock music or images, the freelancer has obtained all permissions and licenses necessary to permit you to use them.

The freelancer’s final product is exclusively yours and may be used for any purpose including translations, audiobooks, and advertising. (However, if the design incorporates stock images from a site such as Shutterstock or a free image available to anyone through a Creative Commons license, then you will not have exclusive rights to those stock and free images.)

I recommend against using the phrase work-for-hire. It is a shorthand expression for a complicated set of legal rules that may not apply.

Tax Reporting

hiring freelancers: the legal nitty-gritty by Helen Sedwick for BookWorks.comIf in any calendar year you pay a U.S. freelancer (other than a corporation) $600 or more for services or $10 or more in royalties, then tax law requires you report those payments on a 1099-MISC and the equivalent state form. This does not apply to CreateSpace, BookBaby or other corporations.

If you will cross that payment threshold, ask the freelancer for a W-9. It is a simple form you can download from the IRS website.

If the freelancer is a not a U.S. resident, then the law requires you to withhold 30% of your payment to a foreign independent contractor (freelancer) and pay it to the IRS. You can get around this rule by having the freelancer send you IRS Form 8233. If the freelancer provides that form and lives in Canada, South Africa, the European Union, Switzerland, Russia, or a Scandinavian country, then you don’t have to withhold any amount. You do not file the Form 8233 with the IRS. You keep it in your files in case the IRS ever asks for verification.

hiring freelancers: the legal nitty-gritty by Helen Sedwick for BookWorks.com1099's.  No later than January 31 of the next calendar year, complete a 1099-MISC for each freelancer (other than corporations), file it with the IRS, and deliver a copy to the freelancer.

If you report the freelancer’s payments on a 1099-MISC, then you are in a better position to deduct the expense from your income. In fact, many CPAs recommend that you send a 1099-MISC to all independent contractors, even if you pay them less than $600 in a calendar year. This provides more support for your business expense deductions.

When Hiring Freelancers, Remember to...

Be clear about your expectations and standards up-front. If you don’t know what you want, then don’t hire someone until you do. You are more likely to get frustrated with your freelancer (and vice versa) if you can’t articulate the style, tone, design, etc., you want. Take the time to consider your options. Look at samples and write out your goals, likes, and dislikes before you hire someone.hiring freelancers: the legal nitty-gritty by Helen Sedwick for BookWorks.com

Admit your mistakes. Hiring freelancers is not an exact science. If you signed on with the wrong freelancer, admit it and find a way out, even if it costs money. Everyone makes mistakes. I’ve paid for cover designs I never used and wasted money on worthless promotions. Sometimes you just have to pay the piper and move on.

Disclaimer: Helen Sedwick is an attorney licensed to practice in California only. This information is general in nature and should not be used as a substitute for the advice of an attorney authorized to practice in your jurisdiction.


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2 thoughts on “Hiring Freelancers: the Legal Nitty-Gritty”

  1. Nikki says:

    Interesting article and you’ve made some great points for authors seeking freelancers. However, regarding issuing 1099s, the IRS clearly states that when payments are made through third-party gateways (PayPal, Stripe, and so on) the client should not issue a 1099-MISC. It is up to the third-party payer to issue a 1099-K. Whether the freelancer meets the threshold for a third-party payer to issue a 1099-K is immaterial; authors who pay freelancers via third-party payers such as PayPal and Stripe should not issue a 1099-MISC. Doing so can lead to double reporting and raise red flags.

    Another source for finding freelancers who work specifically with indie authors self-publishing fiction and creative nonfiction is the Association of Independent Publishing Professionals (AIPP), which has a searchable directory of service providers.

  2. Erika says:

    Hello!
    If you are looking for a freelance lawyer, you can easily find a good one here: https://www.xplace.com/legal/freelancers. This great outsourcing platform has a lot of advantages: there are a lot of competent and experienced legal freelancers ready for any job and it doesn’t charge any commission from you.

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