Laws that Every Freelancer Should Know

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If you have made the decision to enter into freelance or contract work, you are probably aware of the
many advantages that come with moving away from the nine-to-five lifestyle. For one thing, you have
the flexibility to set your own schedule so that you can do as much work as you like whenever you like.
Further, you have the ability to take a vacation any time, even on a whim. And of course, the pay is
much better than your average salary. But there are also drawbacks to entering the world of freelance
work. Your paychecks aren’t regular, you receive no benefits, and you have to hustle for work if you
want to survive. Like any job, there are pluses and minuses, to be sure. But there are also laws in place
that could affect freelance workers (both positively and negatively) and it pays to know what they are if
you want to make a go of your independent operating status.

It would be impossible to list all the laws that could potentially affect freelancers, but there are a few
basic legal tenets you need to understand. The first and most important concerns contracts. You are
a contract worker. This means that without a contract, you have no recourse should an employer
decide not to pay you for work. Luckily, you don’t need to see a lawyer to draft these important
documents; most companies will issue you a simple purchase order, which serves as proof that they are
contractually obligated to pay you for your services. However, if you want a contract that is skewed in
favor of your interests, you can certainly have a standard form drawn up (although some companies
may not accept it). From there, the onus is on you to keep immaculate records in case you should find
yourself in court suing for payment.

Next you need to understand tax laws. You’re probably not too pleased with the fact that you will have
to pay your taxes in full (no parent company to pay a portion for you), but the upside is that you have a
whole new world of write-offs to explore. The trick here is to consult with a reliable accountant to make
sure that you’re getting all of the deductibles you deserve without raising any red flags that will bring
down an IRS audit. Again, a meticulous filing system will help you here (along with a separate bank
account or credit card devoted solely to your business expenses).

Finally, you should consider the possibility of incorporation and business insurance. As a freelancer you
might not think that these steps are necessary, but when it comes to legal protection, you’ll probably
agree that you don’t want your personal assets on the table during a business dispute. In short, you
don’t want to risk losing everything should you be sued or should you face damages due to your type of
work or the subcontractors you employ to help you.

As a freelancer, it’s unlikely that you’ll need a California divorce lawyer or a NJ DUI attorney to help you
deal with the legal concerns of your business (although you may need them for other legal woes in your
life). For the most part, all you really need is some common sense to see you through. But just in case,
it pays to have at least a basic knowledge of the types of legal troubles you could face and to have the
name of a reputable attorney that has a good track record of helping freelance workers like yourself.
Remember, you can write off the cost of any legal fees associated with your business, including legal
advice.