My wife was contacted by a friend who wants to hire her for online work. For payment, he's requesting that she set up an Upwork account.

She's not wanting to do other freelance work, this is just to be paid by one person.

The friend has recently started his own business and is saying that he wants to set up his own payroll but doesn't have the infrastructure to do so yet.

Is this legit? Neither of us had ever heard of Upwork before. If this goes kaput, is there any downside to this?

  • 1
    Reason for -1? So I know what to fix? – John Doe Sep 26 at 15:36
  • it is legit, but you will end up paying more fees to upwork, e.g. upwork charges 20% of your profits – Nitin Sawant Oct 19 at 9:02

Payment on Upworks is fairly standard as the money is held by a trusted agent. The most obvious downside is the commissions you'll have to pay Upworks.

Perfectly legal, nothing wrong with that. Upwork is a very successful business, your friend's business is more likely to go bankrupt than Upwork.

  • 4
    Be warned that the fee is 20% on the first $500, then 10%. – Harry Cover Sep 26 at 12:34

I would ask why. There should be no reason "your friend" can't completely and thoroughly explain the reasoning for this. I may be a valid request. Or it may be a harbinger of poor business management and practices.

It makes little sense to introduce a middleman if there's no need. There's nothing "wrong" with it, but it seems like poor planning or at the very least poor business management on "the friend"'s part.

If "the friend" is wanting to use upwork so he/she can track expenditures and other accounting details, then your wife would need additional compensation to overcome the commissions she'll be charged for payments through upwork.

If the only reason is due to the escrow payment structure, that can be done without some middleman crowdsourcing web site taking commissions.

If "the friend' merely wants to be abel to pay online electronically, there's PayPal, Venmo, and most banks have their own "cash sending" app as well. You don't need a crowdsourcing site to send payments.

If "the friend" has some ulterior motive, such as building his reputation at upwork, well, that's kind of squirrely if you ask me. Like asking your brother-in-law to give your business a good rating because you know he wouldn't say anything negative. I guess there's no harm in that, even if it is ethically questionable.... except upwork takes commissions from teh worker not the client.

I, personally, wouldn't do it. Not due to anything about upwork and their structure/reliability, but because I've worked for more than 15 years WITHOUT any crowdsourcing site such as upwork. They aren't mandatory by any means. Why give some third-party commissions???

I note this probably does not apply in your case, and possibly not to others living around the world.

However for others looking at this question from a British Isles perspective

In the UK anyone who employs another even if contract with the business uses terms like ‘casual’, ‘freelance’, ‘zero hours’, ‘as required’ or something similar the employer has to

Collect Tax and national insurance from payments (say 25%) Add to the national insurance (say 12.5%) Provide a pension (say 7.5%) Ensure the wage is above the Adult minimum wage Register all the above with associated overheads to verify said paperwork

Even though all those can be set against profits, many will find the combined total above what they wish to pay, its a profiteering business isn't it?

By now you can see why no employer wants to legally employ a single worker unless there is a continuing need.

Many employers will try to get around this by paying an agency a simple fixed £##/hr

But agencies are having to demand more to cover those same costs.

What if the agency is "off-shore" and thus charges a lower fee

Who pays the taxes and National Insurance for "Contracting out" Who needs to save for a pension ?

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