What is Escrow and how is it used?
Escrow is a legal arrangement in which a third party temporarily holds money or property until a particular condition has been met (such as the fulfillment of a purchase agreement).
This is used on PeoplePerHour to protect buyers and freelancers in case issues arise during the completion of a Project. When a Buyer agrees to work with a freelancer, whether by purchasing an Offer or by accepting a custom Project proposal, they are asked to pay some funds into an Escrow account.
The amount paid into Escrow is the full price of the Offer service, if an Offer purchase, or a deposit amount as defined in the accepted Project proposal.
These funds are not paid to the freelancer at this point.
Instead, they are held on the Buyer's behalf by PeoplePerHour so that the freelancer has some security before they start work, and so that the Buyer does not have to pay any money upfront before they have received the agreed deliverables.
These funds are released* from Escrow to the freelancer as payment under one of three circumstances:
- When a Buyer confirms that they are happy to pay the freelancer, on receipt of their invoice. This is the usual process.
- When there is an overdue invoice that the Buyer has either not accepted or rejected despite several reminders. The system will automatically process the invoice on the freelancers' behalf within 7 days for Offers and 15 days for Projects.
- As an outcome of Dispute resolution where PeoplePerHour has determined that the freelancer is entitled to some or full payment for work delivered.
*Please note that funds will only become available for withdrawal after the clearing period, which can take approximately 14 working days to process. Please also be aware that National Bank Holidays may also have an impact on processing times - read more here.
Still Need Help?