As the freelance economy grows ever larger, so to, do the cracks in our social support systems. Written at a time when everybody worked for a single company their entire lives, our employment, taxation and welfare laws are woefully unable to handle a future where over 15% of the EU workforce are self-employed. Oddly (and perhaps worryingly) it’s a possibility that has yet to dawn on today’s policy and law makers, even in the face of rocketing freelancer numbers.
Going freelance has always meant accepting a few universal truths, no statuary sick pay and the risk of none payment. The act of going freelance is the act of moving away from traditional employment based safety nets no risk, no reward as they say. But what if some of the risk factor was mitigated if not removed altogether?
In a rather strange turn of events, fundamentally independent freelancers have started politically coordinating with the aims of actually improving their conditions. Instead of simply waiting on policy writers to take action, The European Freelancers Movement are being proactive by building their own solutions to the problems often plaguing freelancers via good old fashioned mutual support.
Freelancer, heal thy self
The act of becoming Ill is such a problem for the average freelancer, most simply will it not to happen: A number of studies show that self-employed people take around three times fewer days off work for illness than those in traditional employment. For freelancers, being sick can potentially mean the loss of clients, income and ultimately falling behind on cost of living expenses such as housing, ISP and health insurance charges.
In an effort to combat this potential pitfall, freelancers in the Netherlands have created “Broodfonds” (website requires translation) or bread funds in English, is a financial system that allows freelancers to support each other in times illness by allowing participants to form small groups, whose members in turn pay into a mutual sickness fund. It’s actually not a “new” idea, with the first Broodfund being set up in 2006, which now has 4200 members split into 123 group. Each Broodfond group can have from 20 to 50 members after which a new group must be formed, the idea of smaller members numbers ensure the community will stay close which in turn reduces any incentive to cheat the system.
Unfortunately, there is nothing like Broodfonds here in the UK, however self-employed people can purchase private income protection insurance or join the Association of Independent Professionals (Ipse) whose £239 premium members package includes an insurance policy that pays out up to £2000 for a member whose finds themselves sick for more than three weeks.
Hey I just invoiced, and this is crazy! But you owe me money, so pay please maybe?? –The argument for SMart
Ask a thousand freelancers and you’ll get a thousand different stories of clients who, delayed or flat out refused to pay an invoice. Added to the issues of not receiving money in the first place, is the fact chasing down non-paying clients is more than time consuming. Time is often a luxury freelancers can ill afford, as non-payments can and will disrupt a freelancer’s entire livelihood.
That said, some progress has been made in terms of policy. Automatic penalties for recalcitrant debtors was introduced by the European commission’s “Late Payments Directive of 2011” this allowed creditors (IE: A freelancer who issued an invoice) to add an additional €40 and interest to any invoice overdue by more than 60 days. However to the freelancer, 60 days is a very long time.
In an effort to combat what is (arguably) the single biggest problem facing them, freelancers from a number of European nations have created a mutual invoicing systems which can allow them to prosecute non-paying clients with the collective force of the of the whole of the respective system. Societe Mutuelle pour Artistes (SMart), a Belgium-based non-profit organisation started in 1998 which now sits at 58,000 members attended by 155 staff from 10 different office across Belgium.
SMart is the modern take on the guilds of old. With SMart acting as a hub for the issuing and payment collection of invoices, while also taking on the responsibility of chasing down non-paying clients via in house debt collection staff on behalf of its members.
Sadly SMart services are currently not available in the UK, however SMart claims to be considering an expiation into the UK in the future, an act that would make considerable difference to the viability of long term self-employment here. There is some help at hand however with the Ipse premium membership, with members being covered by an insurance policy up to £10,000 if a client goes bankrupt.
By Freelancers, for Freelancers: because Freelancers.
Broodfonds and Smart represent a new take on the old idea of the “mutual society” The idea being too but members first, via gathering all their contributions into a single collective fund, which is then administered via the co-operative or not for profit model, as opposed to banks and insurance companies who benefit their respective shareholders rather than members.
Mutual/friendly societies gained massive prevalence during the 1700 – 1800 period. People worked with that they had, with few (is any) social benefits. The concept of mutual support once again gaining popularity with freelances is no coincidence as the obvious parallels with the modern freelance economy are somewhat striking. But just as the freelancers of the past, we’re creating and developing our own ways in order support, and thrive as a whole.