Chronobank LaborX: getting paid on time, every time
As any freelancer already knows, making sure you are paid on time is both critically important and relatively unusual. Here’s how ChronoBank will make late payments a
thing of the past, whilst protecting both parties to a job.
When you work for yourself as a contractor or freelancer, you’re responsible for your own admin as well as sourcing work and getting the job done. In addition to putting extra pressure on you to perform to a high standard, because you don’t have the standard protections afforded to salaried employees, you also have to take care of collecting payment after a piece of work is complete.
Unfortunately, once the work is done, many employers will be slow to settle up. It’s not often down to overt dishonesty. It’s simply that the job is over and they have moved on to other things — they don’t need you any more, so you fall down their list of priorities. It may be several weeks, even months, before they finally transfer payment.
ChronoBank recognises that this is unacceptable for freelance employees, and has built a system into LaborX that ensures trustless, on-time payments — every time.
Prior to starting a job, the worker’s estimate for the time it will take and the amount of pay required are encoded in a smart contract. For every hour worked, pay is automatically removed from the client’s account and transferred to the worker. The default token will be one of ChronoBank’s Labour Hour (LH) tokens, initially the LHAU. However, pay can take the form of any ERC20 token, subject only to whether the worker is prepared to accept it. (You can find out more about this change, which brings greater rewards for investors, in ‘Time token reward model 2.0’.)
A withdrawal limit is also approved by the client, so that if the job takes longer than expected, the worker will still be paid for overtime. However, if the time taken extends past the pre-set limit, payments will stop and the client will be asked whether they wish to increase it.
If they are not willing to do so, the job is marked as complete, with any final balances owed being paid to the worker. Similarly, the worker may decline to continue working on the job, in which case the same conditions apply.
Checks and balances
This system of regular, automatic payment up to a pre-agreed limit operates during the course of a normal job, until the job is finished or paused, or unless the client runs out of money. This ensures the same basic protections for freelance workers that most employees enjoy as a matter of course.
However, protections are also built in for the client in the case of poor performance on the part of the worker. Clients can cancel work at any time, though they will always have to pay for time so far worked. If it turns out that a worker has not spent the time well and has been bad value for money, the employer can end the contract and leave negative feedback for the worker. They will need to pay for a minimum of one hour of the worker’s time before doing this, to prevent malicious individuals from trying to ruin a worker’s reputation at no cost to themselves.
This is designed to be a robust, intelligent system that not only protects both parties, but aligns their interests to ensure the possible synergies and efficiencies.