Copyright Concerns When Crossing the Client-Employer Line

In the past we’ve explored some of the problems with letting clients cross a line by treating you more like an employee than an independent contractor.

For example, if they cross that line and are held accountable they could end up paying back taxes and benefits. That can be a good reason to pursue issues when clients are really employers trying to scam the system to save a buck.

But Yolander Prinzel’s recent post about the financial differences between employees and freelancers reminded me of something else you need to watch out for — copyright.

How Copyright Comes Into Play

With the way copyright law works in the U.S., as a freelancer you automatically hold the copyright for any work you create. Transferring that copyright to a client requires fairly specific contract terms in writing.

But if you work as an employee, your employer would automatically hold the copyright on your writing unless you had another agreement in writing.

You can learn more about copyright transfers with clients and employers in the U.S. Copyright Office’s Works Made for Hire brochure.

Why This Matters

In general, it’s not a good idea for a freelancer to transfer a copyright to the client. There are exceptions though. For example, you might not care if it's something that can never be used again in any way. Or you might be hired to create a derivative work of something the client already owns the copyright to where it could make more sense to leave all rights with the client. But if you choose to do this, you can (and I'd argue you should) charge significantly more.

Why wouldn't you want to let go of your copyright on every project? You can often find ways to get more out of them. You might directly resell rights, such as selling first rights to a feature to a magazine and selling online rights to a blog later on. But owning the copyright means more than that.

It also means you’re the only one with the right to create or commission derivative works. If you work within a narrow niche, it’s highly likely you’ll write similar content over the years. You might even re-use sources. And by retaining the copyright to the original content, another client can’t come after you for producing something similar that they claim is a derivative work. That would be your right.

It could also lead directly to more freelance work if your clients later want derivative works made from content you created, and you would be the natural choice to do that for them. For example, if a feature you write goes over well and the client wants to expand it into a longer report, unless they've negotiated a license that allows it, they need your permission to create that. Ideally you would be hired to expand the content. Worst case, you charge more up front for the license that allows them to hire someone else to do so (or do it themselves). On the other side of the spectrum you might also decide to create and release a longer report based on a past article. As long as you retained the copyright, you should be able to do that.

Now let’s say a freelance client oversteps and crosses into employer territory. Normally they would be the one concerned about you reporting them and requesting that their classification as an employer be enforced. They could end up paying more because you had to give up certain freedoms and take on certain costs involved in working as a freelancer. But there’s a risk to pursuing it. If you do, and they’re classified as an employer, then they might technically own the full rights to your work.

Would it be worth it? You would have to decide what’s more important — your copyright or your professional rights and freedom as a freelancer. Fortunately this is something most of us won’t ever come across. It's simply an issue you should be aware of. You can avoid having it happen to you by not allowing clients to cross those lines in the first place. Not sure where those lines are? I explored some of them in my look at Elance’s Work View, but you can learn more by reading ”Independent Contractor (Self-Employed) or Employee?” from the IRS.

Have you ever had a client try to cross the line into employer territory? Did you do anything about it or walk away from the project? Or did you put up with it at the time? Were you aware that your professional relationship status could impact your copyright in your own work? Share your stories and experiences in the comments.

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Jennifer Mattern is a professional blogger, freelance business writer, consultant, and indie author. She runs numerous websites & blogs including All Freelance Writing, Freelance Writing Pros, NakedPR, and Kiss My Biz.

Jenn has 25 years' experience as a professional writer and editor and over 20 years' experience in marketing and PR (working heavily in digital PR, online marketing, social media, SEO, new media, and thought leadership publication). She also has 19 years' professional blogging and web publishing experience (including web development) and around 18 years of experience as an indie author / publisher.

Jenn also writes fiction under multiple pen names and is an Active member of the Horror Writers Association.

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8 thoughts on “Copyright Concerns When Crossing the Client-Employer Line”

  1. Interesting. When I first started freelancing in 2008, I was told that the client holds the copyright because you’re providing a service for them and their business. I may have to revise my contracts. Although, as you stated, there are exceptions to the rule.

    • That definitely wasn’t right. As a freelancer (in the U.S.) copyright automatically stays with you. You have to have language in a written contract to stipulate otherwise — such as a “transfer of copyright” clause or it has to state that you’re specifically creating a “work made for hire.” Personally, I very rarely (almost never) accept those contracts. And when I do it’s only if a client is providing everything I need and it’s not something I’d have any use for in the future (such as a profile for one of their company execs based on their job description and an interview with them).

      If copyright automatically went to clients, magazines wouldn’t often buy first North American print rights. And none could buy reprints from freelancers; they’d have to buy them from your former client instead. The sad thing these days is that the people willing to pay the least are often the ones who think they should the full rights to your work. So be careful about contract language.

      My general policy is that if a client wants full copyright, they pay at least ten times more than my usual rates. So, for example, a $250 blog post would cost them $2500. Funny thing is, as soon as they hear that, they’re suddenly comfortable with the rights they get at the base rate. And those are pretty generous. My base rates cover first worldwide rights (not just electronic rights for example). I also have a personal policy where I don’t simply republish anything written for clients, nor do I resell them as-is (though I could). My preference is to reserve the copyright so I can create derivative works — maybe the same article content and sources taken from a different perspective or tailored to a different audience — if I’m going to reuse the material at all.

      If you use a standard contract, it’s a good idea to have a lawyer look it over. The last time we had a contract looked over, it was for my hubby’s business. And I want to say we only paid around $100 for it. That was a contract from a client where our lawyer was checking it over for anything hubs would need to be concerned about. For your own standard one, I’d pay a little more and have it thoroughly reviewed (or let them write it), and then re-use the whole thing when you can, or at least make sure client contracts reflect your language regarding rights to the work.

  2. Hi Jenn. I just finished reading this post and the one you created before,”Another Freelance Marketplace Bites the Dust — Elance Work View”. I’ve just made an account with Elance and Odesk recently. Reading this has me a bit discouraged at the moment. I have the non-paying function setup right now. I’m also a rookie at doing this since I don’t have a lot of experience in writing. Sans, writing essays for school and entering in contests.

    Do you have any advice on how to be careful with these types of situations? I know you’re not trying to say that Elance and Odesk are “scamming” the freelancers and I guess clients as well.

    I just want to make sure that I know what I’m getting myself into. I’m having a hard time finding part-time work and I’m in the cusp of returning to school, hopefully for the Fall semester. I want to put my foot in the right door before moving forward.

    • I generally recommend that writers stay away from sites like Elance these days. There are better options for building a portfolio, and the best gigs are almost never advertised in those kinds of marketplaces (and when an occasional gem turns up, you have more competition ready to jump on it).

      Here’s another post you can check out. It’s also an older one, but it has a few ideas on building portfolio samples when you’re starting out:

      If you do decide to use Elance, one of the best things you can do is check out feedback on any past deals the client made on the site. And pay close attention to the requirements listed in their job ad. If you see the warning signs I mentioned in the Elance post, I’d suggest steering clear.

      • Thank you for the response Jenn. What’s your opinion about Guru? On your old blog post “Another Freelance Marketplace Bites the Dust — Elance Work View” someone in the comments section mentioned Guru. Would I have the same problems on there like Elance and Odesk? I’m thinking about closing both accounts and just use Guru instead. I’ll most definitely look into building portfolio samples.

        • As long as you’re not bidding for gigs, it’s a step up. But I see they still have a “guaranteed” payment thing, where clients only have to pay if they’re completely happy with the end results. That’s not how freelancer-client relationships work, and no third party should be involved in determining whether or not payments are made. Contrary to their claims on their site, this isn’t “win-win” for everyone involved. It strips rights and responsibilities from both parties — ones that help to determine their legal working relationship status. In a true contractor/client relationship, you determine how many edit requests a client gets in a quoted price, it’s both of your responsibility to make sure project terms are clear up front, and if you happen to get a client who is never going to be truly happy with end results (and these situations do happen; some clients don’t know what they really want until they see it), you’re still paid for the work put in. I have a huge problem with these kinds of sites meddling with those relationships between two businesses. That “feature” alone is enough for me to recommend not using them as a freelancer. You’re far better off finding your own clients rather than relying on third party services. If you don’t have an established platform bringing clients directly to you yet, start by sending out queries and / or making cold calls. At least then you’ll land the exact type of client you’re looking for rather than only ones who happen to use a particular marketplace.

          • Good point. Looks like I’ll have to go back to square one then. No sense in giving up. I appreciate the advice! 🙂

          • You have to do whatever you feel is best for you Darryl. You don’t automatically have to take my advice. If you still want to try something to see how it works for you, go for it. 🙂

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