The information provided below is for general informational purposes only and does not constitute legal advice. You should consult a qualified legal professional for advice specific to your situation.
We know that you became a freelancer because you wanted to be your own boss, master your own time and choose the projects and people you work with. Leading the market in freelancing, we know how important it is for you to enjoy the long-term benefits of working independently. We're here to be your trusted partner and support you in your freelance journey. We've got your back when it comes to the hurdles you may encounter from time to time, and today we're going to dive into the topic of legal compliance for freelancers.
In this article, we'll explore the following:
- What is freelancer legal compliance?
- What are your legal responsibilities as a freelancer?
- How to reassure clients that your contract remains compliant
Legal considerations in freelancing
So what exactly is freelance legal compliance? As a freelancer, there are certain practices you're expected to abide by in order for your work to be truly considered independent. If you are working for a client on a freelance contract, but operating like a permanent employee, your freelance contract could be reclassified into a permanent contract. Let's make sure you can stay truly independent!
Ensuring compliance as a freelancer
You may already be an expert on how to remain compliant, or perhaps this is the first time you're hearing about it. In reality, it's quite simple! If you look like an employee, if you behave like an employee towards your client, then you may be reclassified as an employee, and your fees would be taxed as salary. The delineations are often blurry in a professional environment and one single indicator will not be enough but what really matters is the overall impression you give. By adhering to a few best practices, both freelancers and their clients can greatly reduce the risks of misclassification and continue their collaboration with ease and peace of mind.
As a freelancer, you should be sure to:
1. Make your own schedule
As a freelancer, choice is key. You should be free to choose when and where you work, no matter what. Most of the freelancers on Malt actually do hybrid work: occasionally working from their clients’ offices when it’s relevant, mixed with remote work. You're in control of your own time - just remember that you should agree on project deadlines with your client and flag any delays early.
2. Choose your own equipment
Freelancers typically have the luxury and responsibility of purchasing and maintaining whatever equipment they use in order to get their work done. This of course comes at a cost - one that you should take into consideration when you set your daily rate. No need to work with a Mac if you prefer a PC, or a QWERTY keyboard if you're more of an AZERTY person! Keep in mind, however, that certain clients may require you to use company-owned equipment in order to adhere to data security guidelines, which is also permissible in terms of compliance.
3. Take on as many clients as time permits
We know that time is your most precious resource as a freelancer, however, you're always free to take on more clients. Your clients do not have the right to forbid you from taking on other clients, however they may subject their contract with you to signing NDAs or limited non-compete agreements.
4. Get insurance
Along with the freedom of freelancing comes the responsibility to insure yourself as an independent worker. Through Malt, freelancers can rest assured - all projects through our marketplace are insured up to 20M€.
5. Declare your taxes
Whether it is income tax or VAT, follow your local regulations by declaring your taxes on time, either on your own or with a specialized accountant. In many countries, independent workers may benefit from simplified business status reserved for small businesses. Freelancers are also typically advised to keep business and personal expenses separate.
6. Stick to the terms of your contract
The contract you sign with a client helps create the framework for the relationship you'll have together. When you're hired through Malt, the contract framework is taken care of automatically, and is part of the project you accept. Be sure to examine any new offer carefully, and to be mindful of deadlines for delivery outlined by the client. Doing this systematically from the get go can help reduce the risk of disputes further along the line!
Malt is your trusted partner
We're happy to report that, since Malt was founded in 2013, our clients have always adhered to the correct guidelines and hiring practices necessary for freelancers. Our platform fosters a trusted environment where freelancers can confidently pursue their professional goals, knowing that clients prioritise ethical and compliant hiring practices. We are proud to have a proven track record of facilitating legitimate and compliant freelance work, with zero cases of client penalties due to misclassification.
Freelancing offers incredible benefits and freedom, but it also comes with a certain level of responsibility—especially when it comes to legal compliance. By following best practices, such as maintaining your independence, setting your own schedule, and managing your own clients and finances, you can safeguard yourself against the risks of misclassification and enjoy a sustainable career. At Malt, we’re fully committed to supporting freelancers in their journey. We'll continue to pave the way forward and support the freelancing revolution, so you can keep thriving as an independent professional.
Frequently Asked Questions
What are the legal obligations of a freelancer?
As a freelancer, your legal obligations vary depending on your country of residence and the nature of your work. However, you typically need to:
- Register as self-employed with your local authority.
- Obtain necessary licenses or permits required for your profession.
- Set up a business bank account for financial transactions, depending on requirements in your country.
- Secure insurance coverage for health, liability, or professional risks (Malt will cover certain risks when your project is contracted through Malt).
- Ensure tax compliance, including VAT registration if applicable.
- Work independently in relationship to your clients (see above).
Are freelance contracts legally binding?
Yes, freelance contracts are legally binding commercial agreements. A well-drafted contract should outline the scope of work, payment terms, deadlines, intellectual property rights, and confidentiality clauses. Contracts help protect both parties and reduce the risk of disputes. Using a platform like Malt ensures that contracts are in place and follow best legal practices.
How do freelancers manage their financial and tax responsibilities?
Freelancers must handle their own financial management, including:
- Keeping track of income and expenses for tax reporting.
- Filing tax returns as required by local laws.
- Paying income tax and social security contributions (where applicable).
- Setting aside money for taxes, as these are not automatically deducted.
- Using accounting software or hiring an accountant for financial organization.
- Ensuring compliance with VAT regulations, if required.
Malt helps freelancers navigate these responsibilities by offering resources, partnerships, and best practices to ensure compliance while maintaining their independence.
