oDesk - Payment Methods and Mechanisms
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For hourly work, oDesk employs a special weekly payment schedule that is designed to facilitate its hourly work tracking and management features. Payments are based on a work week that starts at midnight UTC on Monday and goes until 11:59 pm UTC on Sunday. All payments made for work accumulate during the course of the week. The contractor gets the first 12 hours of the following Monday to review the time log and make changes as appropriate, and the employer then has 3.5 days (noon Monday to 11:59 pm Thursday) to review and approve charges. This is also the time period in which clients can dispute hourly charges. oDesk then imposes a five day “security period”, and contractors actually have their accounts credited on Wednesday of the second following week.
All of that equates to a delay ranging from 9 to 16 days from the time work is done, until you actually get the money into your contractor account. This isn’t too terrible in the context of, say, the weekly or monthly payment schedules that are normal for regular employment. But it’s quite a bit slower than payment takes on most other sites.
For fixed rate work there is no weekly schedule, but the five day “security period” still applies. oDesk says that this “allows the payment to be processed and have enough time to settle before becoming available to the recipient”. I guess this policy probably enables clients to pay using services such as e-checks with less of a chance of a problem such as the payment bouncing. However, again, this delay of close to a full work week before you get your money is longer than normal.
oDesk not only allows advance payments, not only encourages advance payments, it pretty much forces them to be used more than any other site does. Why? Because the company makes no other means available for contractors to reduce the risk associated with flat rate work.
I’ve discussed the Internet trust problem before: a contractor who agrees to do the work first and be paid later risks getting ripped off, but so does a client who agrees to make the payment before the work is done. There are no perfect solutions to this problem, but the best of the imperfect ones is the use of escrow. However, oDesk has no escrow system, which leaves only advance payments as an alternative. Advance payments really don’t solve the trust problem, they just spread the risk. But many contractors use them on oDesk because of the lack of an escrow service.
I consider this one of the very worst flaws of oDesk as a freelancing work marketplace. I discuss the matter in detail in the topic on escrow and payment guarantees.
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