oDesk - Dispute Resolution and Arbitration
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Limited Dispute Resolution for Hourly Projects
The complete absence of any dispute resolution or arbitration process also applies to payments related to hourly projects that are not automatically logged via the Team application. If you agree to do hours of work at a specific rate of pay on an hourly job without using the oDesk software to log your work and take screenshots, the client can simply refuse to pay and you are out of luck.
The only place where any semblance of a dispute resolution process exists is when the Team application is used as part of an hourly project. Or in simpler terms: dispute resolution only comes into play in situations where the oDesk payment guarantee would apply. Even here, dispute resolution is limited: it only applies to a determination of whether or not hours billed by a contractor should be paid.
Clients use the four day review period (from Monday through Thursday of the week following any week in which hours are billed) to look over all of the hours worked and information related to them in the work diary. If any discrepancies or issues are found—such as screenshots showing that the client wasn’t working on the project for which hours were billed—the client can dispute those hours.
The contractor is given three days to reply to a dispute filed by a client. In some cases, the contractor may not contest the dispute: for example, a contractor might realize that he or she accidentally logged time to the wrong project. If so, the disputed hours will be removed from the week’s billings. If the client and contractor cannot agree on the disputed hours, then an oDesk employee will review the work diary and make a determination as to whether the hours should be paid or not. The company does not make any specific information available about how this is done. The determination is final and cannot be appealed.
This mechanism sounds like it gives the client the upper hand in the process, and in some ways that is true. But oDesk also provides some surprising protection to contractors in how it implements its payment guarantee and dispute resolution process. Most notably, oDesk’s promise to clients is limited to ensuring that they pay only for hours actually worked: there are no guarantees about the quality of the work performed. Clients are expected to monitor the work that contractors do, and take corrective action if it doesn’t meet expected quality levels. However, they still must pay for all hours worked on a project, even if there are issues with the resulting work product.
oDesk’s justification for this policy is that with a “non-virtual” worker in a real office, even if you found the person’s performance unacceptable, your recourse would be limited to firing them—you couldn’t fire them and also refuse to pay them for the time they put in. This makes sense, and represents a unique way that oDesk protects contractors, but it is just one more way that oDesk is really very different than other freelancing sites in how it treats freelancers. (vWorker appears to have copied this model as well; Elance is different in that there you can dispute payment based on the quality of work done.)
This is one aspect of client-contractor conflict management where I can honestly give oDesk a full-throated endorsement.
While chargebacks are not discussed in detail in the company’s help files, nor its terms of service, I engaged in a discussion with oDesk customer service about this issue. The answer I received was that oDesk will stand by contractors in the event of a credit card chargeback. This applies even for payments made on non-guaranteed work (such as fixed rate projects) that are subsequently challenged with a client’s credit card company. The only exception is cases where a contractor has behaved in a fraudulent manner, which makes sense.
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Last Site Update: December 13, 2011
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