The Milestone Payment System cultivates confidence between the employer and the freelancer. The employer knows that the money is in safe hands and that he should only release it if the freelancer completes the project. The freelancer will feel secure knowing that there’s a guaranteed payment once the job gets done.
Our constant advice to employers is to NEVER release any Milestone Payment until fully satisfied with the outcome of the project. If there are still some aspects for improvement, it is best to work it out with the freelancer to get the desired results.
The Milestone Payment System has an important security measure called the Dispute Resolution Service (DRS). In the unfortunate event that a project fails (e.g. the employer stops communicating or the freelancer submits substandard work), any of the users can dispute the project's pending Milestone(s). The idea is that the two parties can put their own claim on the money by providing evidence and presenting arguments.
How to File
Either of the parties has the option to file a dispute by hovering over Help and selecting Disputes. On the Disputes page, click CREATE NEW DISPUTE.
Alternatively, a dispute can be filed by going to the project's page. From there, click the down arrow button next to the Milestone Payment and select Dispute.
At this point, the party who creates the dispute will specify the relevant details of their case and the amount that they are willing to pay (as the employer) or accept (as the freelancer).
Employers should specify the amount that they are willing to release to their freelancer. If you are the employer and you want to get the full amount back, specify 0 as the amount you are willing to pay.
Freelancers, on the other hand, specify the amount that they want to receive. If you are the freelancer and you wish to be paid the whole amount, specify the full amount of the Milestone Payment.
Freelancers are given 4 days to respond to their employer's dispute. Employers, on the other hand, are given 14 days to respond to their freelancer's dispute. If the other party fails to respond, their claim on the payment will be forfeited and the party who filed the dispute (disputing party) will win.
Note: Be careful when typing the amount you want to settle on as you can no longer increase it in the future.
The dispute will be in stage 2 once the other party responds. If the other party responds within the given timeframe and makes an offer, both parties will then have to provide evidence and present their arguments.
The dispute will remain in this stage unless the disputing party cancels the dispute, the other party accepts the offer of the disputing party, or one or both parties escalate the dispute to Arbitration.
Any of the two parties may escalate the dispute by paying the arbitration fee, which is $5 USD or 5% of the disputed amount, whichever is higher.
The option to pay the arbitration fee will only be available to either party after a certain interval based on who filed the dispute. If the dispute is employer-initiated, both parties will have the option to pay the arbitration fee 4 days after the dispute goes on stage 2. If the dispute is freelancer-initiated, the option will be available after 14 days.
Note: The arbitration fee will be refunded to the winner of the dispute.
Once the arbitration fee is paid (regardless who did it first), the other party is given only 4 days to do the same. Otherwise, the payer wins the full disputed amount and gets back the arbitration fee.
At this stage, both parties are given their last chance to submit evidence and claims. If the other party also pays the arbitration fee, the dispute will continue on to Arbitration.
At this point, the Arbitration Stage is in effect. Further evidence is no longer accepted from here on out. Freelancer.com will investigate submitted evidence to determine which party should receive the Milestone.
Before entering Arbitration, both users are informed that all dispute verdicts are final, binding, and irreversible. There are no provisions for reconsideration once a verdict is made.
We encourage users to resolve disputes between themselves. But if both parties are unable to reach an agreement, this service is a good alternative to straightening out the conflict.
For more information about disputes, please read: Milestone Dispute Resolution Policy.