Payroll Services Agreement

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1 Payroll Services Agreement Effective Date: May 5, 2015 If a Client and a Freelancer enter into an employment relationship, this Payroll Services Agreement (this Agreement ) applies. Your use of the Site after the effective date will signify your acceptance of and agreement to this Agreement. To the extent permitted by applicable law, we may modify this Agreement without prior notice to you, and any revisions to this Agreement will take effect when posted on the Site, unless otherwise stated in the revised Agreement. Please check the Site often for updates. This Agreement hereby incorporates by reference all terms, conditions, rules, policies, and guidelines on the Site, including the Terms of Service (the Terms of Service ), except that this Agreement and the Member Contract exclude (i) the Independent Contractor Services Agreement and (ii) the Refund and Cancellation Policy and the Dispute Resolution Policies referenced therein. Capitalized terms not defined in this Agreement are defined in the User Agreement or in the other Terms of Service or have the meanings given such terms on the Site. This Agreement is a binding legal agreement between and among Client, Freelancer, Elance, and the Payroll Company that Elance chooses as the employer of record (as described below). This Agreement does not apply to Fixed Price Engagements. Terms and conditions for Fixed Price Engagements may be found in the Fixed Price Escrow Instructions. 1. Employment Relationship and Employer of Record When a Client and Freelancer decide to use Elance Payroll Services, which is described on the Site here ( Elance Payroll Services ), Elance will choose the employer of record (the Payroll Company ). Freelancer (if accepted for employment as described below) will become an employee of the Payroll Company. Elance will instruct the Payroll Company to assign Freelancer to work for Client, and Client will be responsible for supervising Freelancer. The Payroll Company s and your specific responsibilities are described in this Agreement. In general, and without modifying any of the specifics or requirements below, the Payroll Company will be responsible for managing payroll, taxes, government documents, benefits, and insurance. As a Client, you will be responsible for the supervision, direction, and control of the day-to-day activities of each Freelancer assigned to you. As a Freelancer, you will be responsible for performing the work assigned by Client. Your ability to use Elance Payroll Services may depend on certain factors, including, without limitation, the estimated length of the engagement, the wage to be paid, and the nature of the work to be performed. Elance reserves the right to accept or reject a request to use Elance Payroll Services for any reason, or no reason at all, in our sole discretion. 2. International Payroll Services If Freelancer is located outside the United States, Elance offers international Elance Payroll Services for more than 30 countries. International Elance Payroll Services are offered under the same terms as domestic Elance Payroll Services, except that (i) wages, bonuses and the Bill Rate (defined below), will be calculated differently based on the applicable employer requirements in the location where Freelancer resides or is legally organized; (ii) wages are generally paid monthly; and (iii) there may be additional or different employment termination requirements, depending on applicable law. All payments to Elance must be in US dollars, regardless of the location of Freelancer. For more information on international Elance Payroll Services, including availability, estimated Bill Rates, and any additional required terms, please contact 3. The Hiring Process As a Client, you will select a Freelancer to be employed by the Payroll Company and assigned to work for you via Elance Payroll Services as follows: 1) When a Client and a Freelancer decide to enter an employment relationship, Client will inform Elance that Client wants to use Elance Payroll Services. Client must inform Elance if the selected Freelancer will supervise Client s employees or contractors.

2 2) Where legally permitted, the Payroll Company will conduct a background check of all Freelancers prior to employing them. The Payroll Company reserves the right not to hire a Freelancer who does not authorize a legally permitted background check or who does not meet the Payroll Company s standards for employment. 3) If the Payroll Company accepts a Freelancer for employment, Elance Payroll Services will create a job on behalf of Client and submit a proposal for Client s job based on the financial terms already agreed to between Client, Freelancer, and Elance. Client will accept the proposal to hire Freelancer. 4) After Client accepts the proposal, Elance Payroll Services and the Payroll Company will inform Freelancer that Freelancer needs to register with the Payroll Company. 5) Freelancer must complete all employment paperwork required by the Payroll Company, including, in the United States, I-9 proof of employability. 6) When, and only if, a Freelancer has completed all paperwork required by the Payroll Company and been accepted for employment by the Payroll Company, Freelancer becomes a Payroll Employee for purposes of this Agreement, but also remains a Freelancer under the other provisions of the Terms of Service. 7) Once a Freelancer becomes a Payroll Employee, Elance Payroll Services and the Payroll Company will assign Freelancer to work for Client, and work can begin. 4. Hiring Representations, Disclaimers, and Limitations Client acknowledges and agrees that Client has selected a Freelancer to become a Payroll Employee based upon Client s determination that Freelancer possesses the skills, background, and education to satisfy the requirements of the assignment. Neither Elance nor the Payroll Company makes any representations or warranties as to the skills, experience, background, or education of any Freelancer or Payroll Employee. The Payroll Company reserves the right not to hire a Freelancer for any reason or no reason at all, including if the job description is considered, in the Payroll Company s sole discretion, too hazardous or is not permitted by the applicable workers compensation insurance carrier. If Freelancer is an individual that lives in the United States, the Payroll Company will comply with the I-9 requirements of the Immigration and Reform and Control Act of A Client may not switch a Payroll Employee to Freelancer status within 12 months after the Payroll Employee s employment with Client terminates, except as required by law in the event of a significant change in job duties and responsibilities. Freelancer acknowledges that Freelancer has agreed to become a Payroll Employee assigned to Client based on Freelancer s own determination that Client offers work acceptable and appropriate for Freelancer on terms that are acceptable to Freelancer. Freelancer agrees to complete such documents as the Payroll Company may legally and reasonably require to complete the employer / employee relationship, including, without limitation, an authorization for a background check, an employment assignment agreement, applicable tax forms, and the I-9 requirements of the Immigration and Reform and Control Act of 1986 (as applicable and collectively, the Employment Paperwork ). Freelancer also agrees to enter into any separate written agreement (a Client Agreement ) that may be reasonably required by Client, including, without limitation, agreements addressing intellectual property rights, confidentiality, and warranties for the work performed by Freelancer. Freelancer will not become an employee of the Payroll Company entitled to work for Client or receive payment from the Payroll Company until all Employment Paperwork and any Client Agreement have been completed and returned to the Payroll Company or Elance, as applicable, and the Payroll Company has accepted Freelancer as an employee. After Freelancer s employment begins, Client will continue to post projects, assign work, and pay for Freelancer s services through the Site. Elance assumes no responsibility for and will exert no control over the projects and work assigned to Freelancer, nor does Elance have any role in Client s decision to engage Freelancer via Elance Payroll Services. Elance will not direct the work of or supervise (to any degree, directly or indirectly) Freelancer, nor will Elance determine any terms and conditions of Freelancer s employment relationship with the Payroll Company or Client (including, but not limited to, rate of pay, performance evaluation, discipline, and/or termination). Elance merely provides the platform for Client to assign projects and work to Freelancer and separately facilitates the relationship between Client and the Payroll Company that will handle the administration of payroll and other legal obligations of Client with regard to Freelancer. These facts, alone or in combination, do not make Elance an employer of Freelancer or a co-employer/joint employer with Client and/or the Payroll Company. Freelancer acknowledges and agrees that he/she is not an employee, consultant, or independent contractor of Elance and that he/she will not be providing any services to Elance (directly or indirectly) while employed by the Payroll Company.

3 The foregoing paragraph will not apply if Elance is the Client to which Freelancer is assigned. Under such circumstances, Elance will be considered both Elance and a Client for purposes of this Agreement. 5. Freelancer Representations and Responsibilities and the Payroll Company Freelancer, and not Elance or the Payroll Company, will be responsible for timely and professional completion of each project to which it has been assigned and has agreed to, in such manner as to satisfy Client s specified requirements. Freelancer will be solely responsible for the professional performance of Freelancer s work. Freelancer will be solely liable for its acts, omissions and negligence. 6. Disclaimer of Liability by Elance and the Payroll Company FREELANCER IS SOLELY RESPONSIBLE FOR ALL SERVICES PROVIDED TO CLIENT ( FREELANCER SERVICES ) AND FOR ALL WORK PERFORMED AND WORK PRODUCT DEVELOPED BY FREELANCER AS REQUIRED TO PERFORM FREELANCER SERVICES AND DELIVERED TO CLIENT (OR TO ELANCE ON BEHALF OF CLIENT) IN THE PERFORMANCE OF SUCH FREELANCER SERVICES ( WORK PRODUCT ). BOTH ELANCE AND THE PAYROLL COMPANY PROVIDE NO EXPRESS WARRANTY OF, WILL HAVE NO IMPLIED WARRANTY OF, AND WILL HAVE NO RESPONSIBILITY FOR, FREELANCER SERVICES AND/OR WORK PRODUCT, INCLUDING DELIVERABLES. BOTH ELANCE AND THE PAYROLL COMPANY EXPRESSLY DISCLAIM ALL EXPRESS AND IMPLIED WARRANTIES FOR FREELANCER SERVICES AND/OR WORK PRODUCT, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE. AS BETWEEN ELANCE AND CLIENT, FREELANCER SERVICES, WORK PRODUCT, AND DELIVERABLES ARE PROVIDED AS IS. AS BETWEEN THE PAYROLL COMPANY AND CLIENT, FREELANCER SERVICES, WORK PRODUCT, AND DELIVERABLES ARE PROVIDED AS IS. 7. Agreement Conflicts Conflicts between this Agreement and the other agreements defining the relationships between Elance, Client, and Freelancer will be resolved in the following order of precedence: (1) this Agreement; (2) the written agreement between the Payroll Company and Freelancer; (3) the Terms of Service other than this Agreement; (4) the terms awarded and accepted on the Site between Client and Freelancer, to the extent not inconsistent with the Terms of Service; and (5) any other contractual provisions accepted by both Client and Freelancer and uploaded to the Site, to the extent not inconsistent with the Terms of Service. Any written agreement between Client and Freelancer that conflicts with or modifies the Terms of Service or the written agreement between the Payroll Company and Freelancer will be null and void while the other parts of such agreement will remain valid and binding. 8. Elance Payroll Services The following are the services provided by the Payroll Company for Payroll Employees assigned to Client: (i) calculation and payment of wages (including any applicable overtime wages) based upon submitted timesheets; (ii) collection, payment, and reporting of all required taxes on such wages; (iii) administration and management of unemployment claims; (iv) administration and collection of wages associated with wage garnishments in the US ; (v) workers compensation coverage; and (vi) administration of Fair Labor Standards Act and Family Medical Leave Act matters. In addition, the Payroll Company will provide and bear sole responsibility for any health or disability insurance, retirement benefits, or other welfare or pension benefits (if any) to which such personnel may be entitled based on eligibility. 9. Control of Workplace Client acknowledges and agrees that neither Elance nor the Payroll Company will control the workplace in which a Payroll Employee will perform services for Client. Client will be solely responsible for all decisions related to strategic, operational, or other matters concerning Client s business, including, but not limited to, the supervision and scheduling of Payroll Employees. 10. Payroll Employee Supervision and Limitations on Scope of Employment At all times, Client will maintain the exclusive supervision, direction, and control of the day-to-day activities of each Payroll Employee. Client will be solely responsible for the implementation and enforcement of any and all workplace laws, rules, regulations, and for any procedures that exist for the purpose of preventing the misappropriation, theft, or embezzlement of Client s property, including, without limitation, intellectual property.

4 If Client uses Elance Payroll Services to hire Payroll Employees into a supervisory position, Client and Payroll Employee agree that such supervisors scope of employment will be strictly defined and limited. Client and Payroll Employee further agree that any such supervisors actions that are in violation of law will be outside the scope of their responsibility. Client and Payroll Employee further agree that Payroll Employee will not have the authority to sign tax returns, render accounting or legal opinions, issue negotiable instruments, or make final decisions of the nature of those generally made by Client s executives, officers, or directors. Client acknowledges and agrees that Payroll Employees are not employees, consultants, or independent contractors of Elance and that Elance maintains no control over the work assignments, supervision, payroll practices, or other terms and conditions of the working relationship described herein. Client further acknowledges and agrees that Payroll Employees are employees of the Payroll Company for purposes of payroll processing and, in some cases, the provision of certain employee benefits, but that the Payroll Company maintains no control over the work assignments, supervision, or other terms and conditions of the working relationship except as described in this Agreement. 11. Compliance with Laws, Rules, and Regulations Client will comply with all national, state, provincial, federal, and local laws, rules, and regulations that govern or relate to its business, workplace, employees, safety, and government contracting. Client agrees to comply with all such applicable laws, rules, and regulations in its work with and treatment of Payroll Employees, including, without limitation, the applicable laws, rules, and regulations of the location where Freelancer resides or is legally organized. Client will comply with all reasonable directives regarding health and safety from the Payroll Company s workers compensation carrier or any government agency. Client is required to accept and adhere to the Payroll Company s determination regarding each Payroll Employee s exempt or non-exempt status for purposes of any applicable overtime laws. Notwithstanding the fact that the Payroll Company reserves the right to make determinations regarding the overtime exemption status of each Payroll Employee, Client is ultimately and solely responsible for the amount of any wages that are due but unpaid to each of its Payroll Employees, including, without limitation, any wages, back wages, and liquidated damages determined to be due and owing in connection with any action challenging the overtime exemption status of any Payroll Employee. 12. Licensing If a Payroll Employee is required to possess or maintain a special license or be supervised by a supervisor who is required to possess or maintain a special license, Client will be responsible for verifying such licensure and/or providing such required supervision. 13. Equal Employment Opportunity; Workplace Laws; Wage Disputes The Payroll Company selected by Elance to provide Elance Payroll Services is an equal opportunity employer and does not discriminate against any candidate, applicant, employee, Freelancer, or Payroll Employee on the basis of race, color, religion, sex, national origin, age, creed, ancestry, veteran or military status, disability unrelated to the essential functions of a job, or any other basis prohibited by federal, state, or local law. Client and Payroll Employee will comply with all federal, state, and local laws that prohibit unlawful discrimination or harassment. As fully described in the section titled Indemnification below, Client will, to the full extent permitted by law, indemnify and hold Elance and the Payroll Company harmless from any claims, losses, and expenses, including attorneys fees, that result from or relate to claims by or regarding Freelancers or Payroll Employees that Client, Elance, or the Payroll Company failed to comply in any respect with any workplace law or law related to the employment of persons, including, but not limited to, the Fair Labor Standards Act, the Occupational Safety and Health Act, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Family and Medical Leave Act of 1993, or Title VII of the 1964 Civil Rights Act. Furthermore, Client takes full responsibility for any disputed wages, hours, expenses, or other reimbursements owed a Payroll Employee other than disputes arising from a failure of the Payroll Company to provide any services which the Payroll Company has agreed to provide. 14. Policy Against Sexual Harassment and Other Illegal Harassment

5 The Payroll Company prohibits sexual and other illegal workplace harassment. Client will train its Payroll Employees about their rights and responsibilities pursuant to applicable law pertaining to non-harassment or other illegal workplace harassment. Client will be informed if any special training requirements legally pertain to a Payroll Employee by virtue of that person being employed by the Payroll Company. The Payroll Company and Client will provide all Payroll Employees with written information detailing their rights and responsibilities under Client s and the Payroll Company s policies against sexual harassment and other illegal workplace harassment. Client will inform the Payroll Company immediately of any complaint of illegal harassment by or against a Payroll Employee and will undertake and complete a prompt and thorough investigation of any such complaint. Upon notification, the Payroll Company may assist Client with the investigation of sexual harassment complaints made by or against Payroll Employees, but the costs associated with such investigation will be borne by Client. 15. Paying Payroll Employees Your payments for Elance Payroll Services are governed by the terms below, as well as the Hourly and Miscellaneous Payment Agreement with Escrow Instructions. Calculating Wages To use Elance Payroll Services, you must select and use the Site s Hourly option. Escrow Accounts are not available for Elance Payroll Services. When Client decides to use Elance Payroll Services, Client and Elance will agree on an hourly rate that Client will pay to the Payroll Employee (the Bill Rate ). The Bill Rate will include the regular hourly wages for the Payroll Employee plus an amount for employer taxes and Elance s fees and any the Payroll Company s fees (collectively, the Payroll Service Fees ). In addition to the Bill Rate, Client acknowledges and agrees that the laws and regulations regarding when overtime must be paid and in what amount vary from location to location, depending where the Payroll Employee works. Client also agrees that Client ultimately is responsible for paying all wages, employer taxes, and fees associated with the number of hours of work reported by Payroll Employee(s), even if a Payroll Employee reports having worked more than the number of hours authorized in advance. The following formula will determine the minimum amount to be paid by Client for each Payroll Employee each week (the Minimum Payroll ): Minimum Payroll = number of hours reported by Payroll Employee x Bill Rate The Payroll Company pays wages in the United States based on a two-week payroll period (a Pay Period ). On or before the Wednesday following the end of each Pay Period, Elance will inform Client of the number of hours reported by Client s Payroll Employee(s) for the prior week that constitute overtime hours, if any, and the amount of the additional payment that will be required to cover the additional wages, employer taxes, and Payroll Service Fees associated with such overtime hours (the Additional Payroll ). The sum of the Minimum Payroll and the Additional Payroll, if any, constitutes the Final Payroll. For purposes of clarity, if there is no Additional Payroll, then the Final Payroll will equal the Minimum Payroll. Submitting and Approving Expenses and other Reimbursements To be reimbursed for an expense, Payroll Employees should obtain pre-authorization for the expense and must submit scanned receipts and requests for reimbursement to Elance as described in the employment package Payroll Employee receives from the Payroll Company. Elance will provide Client with a Miscellaneous Invoice, including electronic copies of the supporting documentation submitted by the Payroll Employee. Client will have the opportunity to review and approve or deny the Miscellaneous Invoice. If Client previously authorized the expense in the Workroom, Client must approve the Miscellaneous Invoice. Calculating Bonuses Client may, at Client s sole discretion, pay a bonus to a Payroll Employee at any time via Elance Payroll Services. In order to pay a Payroll Employee a bonus, Client must first determine the proper amount to enter into Elance s payment system (the Gross Bonus ).

6 To determine the Gross Bonus, begin by deciding the amount of the bonus to be received by the Payroll Employee (the Net Bonus ). Once the Net Bonus is determined, Client must gross up the Net Bonus to account for the amount reserved by Elance and the Payroll Company for Payroll Service Fees and employer taxes. To do this, divide the Net Bonus by 0.8. The resulting quotient is the Gross Bonus, which is the amount that Client must enter into the Site so that the Payroll Employee will receive the full Net Bonus. Restated as a formula: Gross Bonus = Net Bonus 0.8 The difference between the Gross Bonus and the Net Bonus is the amount reserved by Elance and the Payroll Company for the Payroll Service Fees and employer taxes. The date Payroll Employee will receive the Net Bonus (less applicable tax and other withholdings) may vary depending on the day of the week that Client requests payment of the Gross Bonus. Funding and Making Payments Elance will provide Client with a calendar of Pay Periods for Client s Payroll Employees. By Thursday at 11:59 p.m. Eastern Time, USA, of each week following the end of a Pay Period (the Weekly Payroll Due Date ), the Client Escrow Account must contain an Escrow sufficient to cover the Final Payroll for all of Client s Payroll Employees for the preceding Pay Period. The Client Escrow Account must be funded in U.S. dollars, regardless of the location of the Payroll Employees. In determining whether the Client Escrow Account contains sufficient funds to meet this obligation, Client should consider the effect of potential overtime payments, as well as whether Client has approved the reimbursement of any expenses or the payment of any bonuses during the week. Client s payments of hourly wages, Miscellaneous Invoices, and bonuses are governed by the Hourly and Miscellaneous Payment Agreement with Escrow Instructions. If the Client Escrow Account does not contain sufficient funds to cover the Final Payroll on the Weekly Payroll Due Date or to cover an approved expense reimbursement or bonus, Client automatically and irrevocably authorizes and instructs (i) EEC and its wholly-owned subsidiaries, as agent of Client, to charge Client s Payment Method for the amount of the required payment for credit, plus an additional 10% administrative fee, to the Client Escrow Account; (ii) EEC, as escrow agent, to immediately release the amount necessary to cover the deficiency (the Funding Gap ) from the Client Escrow Account and deposit it in the applicable account; and (iii) EEC, as escrow agent, to immediately release the amount of the 10% administrative fee and pay it to Elance. If Client s Payment Method fails or is insufficient to cover the Funding Gap, Elance will notify Client of the failure via . Within two Business Days from the time the is sent, Client must fund the Client Escrow Account in a sufficient amount to cover the Funding Gap plus the 10% administrative fee or Elance may institute a collection action and in that case Client hereby agrees to repay Elance for such amounts, plus reasonable attorneys fees and costs of collection incurred by Elance to recover such amounts from Client. By funding the Client Escrow Account in response to such a notice, Client automatically and irrevocably authorizes and instructs (i) EEC, as escrow agent, to immediately release the amount necessary to cover the Funding Gap from the Client Escrow Account and deposit it in the applicable account; and (ii) EEC, as escrow agent, to immediately release the amount of the 10% administrative fee and pay it to Elance. The Payroll Company and Elance will deduct 20% of the Final Payroll and any Gross Bonus for each Payroll Employee each week to cover domestic Payroll Service Fees and employer taxes. Fees and deductions for international Payroll Services are determined on a case-by-case basis and must be agreed upon prior to engagement by the Payroll Company. The Payroll Company will also withhold employee taxes as required by applicable law from Payroll Employee s pay. Expense reimbursements are not subject to Payroll Service Fees or taxes, unless required by applicable law. The amount that US-based Payroll Employees will receive for each Pay Period will be 80% of the Final Payroll and any applicable Gross Bonus, less employee taxes, plus any expense reimbursements. Termination of Payroll Services for Failure to Fund Payments Elance reserves the right to immediately terminate Client s ability to use Elance Payroll Services and the employment of Client s Payroll Employees (in accord with any applicable laws regarding notification to the Payroll Employee of such termination) if either (a) the Client Escrow Account repeatedly does not contain sufficient funds to cover the Final Payroll on the Weekly Payroll Due Date or to cover an approved expense reimbursement or bonus, or (b) Client has failed to deposit funds into the Client Escrow Account sufficient to cover a Funding Gap, plus the applicable administrative fee, within two Business Days of receiving notice from Elance that Client s Payment Method has failed or is insufficient to cover the Funding Gap.

7 In lieu of termination, and at Elance s sole discretion, Elance may require Client to maintain a deposit balance in the Client Escrow Account in order to continue using Elance Payroll Services. Elance subsequently may terminate Client s ability to use Elance Payroll Services as described above if Client ever fails to maintain the deposit balance required by Elance. 16. Sales and Use Tax Subject to the terms of this section, Client will be responsible for any applicable sales, use, or other like taxes (hereinafter, special tax or special taxes ) attributable to periods on or after the date on which Client accepts this Agreement that are based upon or measured by either Elance s or the Payroll Company s fees for performing or furnishing Elance Payroll Services, but excluding taxes based on Elance s or the Payroll Company s net income. This section applies to Client s use of Elance Payroll Services for any Payroll Employee who works within a state that collects such special taxes, now or in the future. If Client employs a Payroll Employee who resides or is legally organized in a location that has special taxes, Client s Bill Rate will be increased to incorporate the additional special tax required by that specific state, plus an additional Elance processing fee. Client will also be required to increase the amount of any Gross Bonus to account for such special tax. In no event will Elance have any tax liability for Elance Payroll Services other than taxes based on Elance s net income. Elance reserves the right to invoice Client for any special taxes, plus the Elance processing fee, not initially paid by Client. Client will cooperate with the Payroll Company to accurately determine each party s tax liability and to minimize such liability to the extent legally permissible. In the event that the appropriate tax authority determines that all or a portion of the special taxes collected from a Client is not due, the Payroll Company will either (1) assign its right to refund, credit, or offset to the Client, or (2) promptly remit to the Client an amount equal to the refunds, credits, or offsets received. 17. Intellectual Property Rights Payroll Employee will enter into an agreement with the Payroll Company providing that the rights to all work created by Payroll Employee while providing services to Client is either owned by Client or, if the work cannot be owned by Client, is irrevocably licensed to Client. 18. Confidentiality and Non-Disclosure Payroll Employee will enter into an agreement with the Payroll Company that will provide that Payroll Employee will not disclose confidential information of Client and will only use such information as necessary to perform the services for which Payroll Employee has been engaged. 19. Required Notifications Writing Required Client will send all written notices and payroll communications to Elance in accordance with the requirements of the Terms of Service. Notices Client will provide Elance with written notice within 24 hours of its own receipt of any notice of a work-related accident or injury, and within three days of its receipt of any notice of any garnishment orders, involuntary deduction orders, notices of IRS liens, and other forms of legal process affecting the payment of wages to a Payroll Employee. Client will provide Elance with written notice within three days of any major job description changes or employment decisions regarding a Payroll Employee, including a switch from full to part time status. Client will provide Elance with written notice of the termination of the employment of a Payroll Employee (whether the termination is initiated by Client or the Payroll Employee) by providing electronic delivery of a copy of the Payroll Employee Termination Form to either (a) at least three Business Days before the Payroll Employee s last day of employment; (b) immediately if employee quits without notice; or (c) such longer time

8 as may be required to provide the Payroll Employee with adequate notice of termination under the law where the Payroll Employee resides or is legally organized. Client also will terminate an employment relationship and provide Elance with a Payroll Employee Termination Form, as required above, if a Payroll Employee performs no work for Client for more than 10 consecutive Business Days due to any reason other than planned vacation or legally required leave (which includes, without limitation, legally required medical or family leave). 20. Disclaimers Notwithstanding anything to the contrary, Client and Freelancer acknowledge and agree that: 1) Elance is solely an online platform for buyers and sellers of services and, as such, will not be responsible for any breach or failure to perform of the Payroll Company or any other action or inaction of the Payroll Company or any Client or any Freelancer; and 2) The Payroll Company will not be responsible for any breach or failure to perform of Elance or any other action or inaction of Elance or any Client or any Freelancer. 21. Indemnification In addition to the indemnification obligations set forth in the User Agreement, Client agrees to (a) release, indemnify, hold harmless, protect, and defend Elance, the Payroll Company, and their respective partners, employees, directors, officers, agents, affiliates, and subsidiaries (each an Indemnified Party ) from and against any and all claims by any person or entity, including a Freelancer or Payroll Employee; and (b) reimburse any Indemnified Party for any claims, expenses, costs (including attorneys fees and court costs), obligations, losses, and damages (whether joint or several and including special, consequential, compensatory, or punitive damages), whether arising in contract, tort, or otherwise, related to: (i) actual or alleged acts, errors, or omissions (including, but not limited to, breaches of contract or violations of statutes, laws, rules, or regulations) by Client, its employees (including Payroll Employee(s)), partners, agents, affiliates, members, subsidiaries, representatives, and officers; (ii) any breach of or failure to perform under this Agreement, including, but not limited to, Client s failure to accurately or timely report wages, hours, expenses, and other reimbursements owed a Payroll Employee or payment of taxes for which Client is responsible; (iii) any alleged failure to properly classify one or more Payroll Employees as exempt from overtime; (iv) actual or alleged errors in any timesheet(s) provided to Elance and/or the Payroll Company; (v) Client s failure to pay a timesheet properly submitted for payment by Payroll Employee; (vi) the actual or alleged failure of Client to comply in any respect with any workplace law or law related to the employment of persons, including, but not limited to, any location s laws with respect to the payment of wages or the treatment of employees, and including, without limitation, the Fair Labor Standards Act, the Occupational Safety and Health Act, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Family and Medical Leave Act of 1993, and Title VII of the 1964 Civil Rights Act (collectively, Employment Laws and Regulations ), or (vii) the actual or alleged failure of Elance or the Payroll Company to comply in any respect with the Employment Laws and Regulations based in whole or in part (i) on any instruction(s), act(s), or failure(s) to act of Client; or (ii) on any incorrect, misleading, or false information provided by Client to Elance or the Payroll Company. This indemnification provision will survive the expiration or other termination of this Agreement or Client s relationship with Elance. 22. Change of Payroll Company Elance may designate a new third-party payroll company ( New Company ), at any time in Elance s sole discretion, to perform Elance Payroll Services. Upon such designation, or at any other time as directed by Elance, Client will: (i) cooperate with such New Company in every reasonable manner to ensure uninterrupted performance of Elance Payroll Services; or (ii) if directed by Elance, immediately assume all federal, state, and local obligations of an employer to the Payroll Employees and immediately assume full responsibility for providing payroll services and workers compensation coverage until such time as a New Company takes over such duties from the Payroll Company. If directed by Elance, Client will inform Payroll Employees that they are no longer covered by the Payroll Company for Elance Payroll Services, workers compensation, and/or health care policies. 23. Termination of Elance Payroll Services

9 Without limiting Elance s ability to terminate services provided to Client under other Terms of Service, Elance may terminate Elance Payroll Services at any time after providing Client with notice of such termination at least 30 days in advance of the final day Elance Payroll Services will be offered (the Termination Date ). The Payroll Company will have the obligation for wages and benefits payable to Payroll Employees through and including the Termination Date, at which point such duties will cease. Additionally, all obligations of the Payroll Company to maintain workers compensation insurance coverage and/or health care coverage on behalf of Payroll Employees will cease on the Termination Date. Client, or another third party designated by Client in Client s sole discretion and only if it elects to designate a third party, as the case may be, will immediately assume all federal, state, and local obligations of an employer to the Payroll Employees and will immediately assume full responsibility for providing payroll services and workers compensation coverage. Client will inform Payroll Employees that they are no longer covered by the Payroll Company s workers compensation and/or health care policies. Upon the Termination Date, Elance and the Payroll Company will immediately be released from such obligations as are permitted by law, but Elance and the Payroll Company will not be relieved of any such obligations that accrued or occurred prior to the Termination Date. 24. General Provisions Governing Law. This Agreement and any Claim or action related thereto will be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of law provisions and excluding the United Nations Convention on Contracts for the International Sale of Goods (CISG); provided, however, that any Claims made by any Freelancer located within the United States will be governed by the law of the state in which such Freelancer resides or is legally organized. You agree that any Claim must be resolved as described in the subsections of the User Agreement titled Informal Dispute Resolution and Mandatory Binding Arbitration and Class Action/Jury Trial Waiver. Severability. If any provision of this Agreement is, for any reason, held to be invalid or unenforceable, the other provisions of this Agreement will be unimpaired, and the invalid or unenforceable provision will be deemed modified so that it is valid and enforceable to the maximum extent permitted by applicable law. No Assignment. This Agreement, and the parties rights and obligations herein, may not be assigned, subcontracted, delegated, or otherwise transferred by a party without the other parties prior written consent, and any attempted assignment, subcontract, delegation, or transfer in violation of the foregoing will be null and void. The terms of this Agreement will be binding upon assignees. Notwithstanding the foregoing, Client may, without the consent of Freelancer, assign any rights and obligations under this Agreement to an entity merging with, consolidating with, or purchasing substantially all its assets or stock. Any permitted assignment of this Agreement will be binding upon and enforceable by and against the successors and assigns of Client, Freelancer, Elance, and the Payroll Company, provided that any unauthorized assignment will be null and void and constitute a breach of this Agreement. Injunctive Relief. Freelancer acknowledges that, because its services are personal and unique and because Freelancer will have access to confidential information of Client, any breach of this Agreement by Freelancer would cause irreparable injury to Client for which monetary damages may not be an adequate remedy and, therefore, will entitle Client to injunctive relief (including specific performance). The rights and remedies provided to each party in this Agreement are cumulative and in addition to any other rights and remedies available to such party at law or in equity. Waiver. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion. Export. Freelancer agrees not to export, directly or indirectly, any U.S. technical data acquired from Client or any products utilizing such data, to countries outside the United States because such export could be in violation of the United States export laws or regulations. Execution and Delivery; Binding Effect. The parties will evidence execution and delivery of this Agreement with the intention of becoming legally bound, by accepting the Terms of Service on the Site. 25. Contacting Us

10 If you wish to report a violation of the Terms of Service, have any questions, or need assistance, please contact Customer Support as follows: Web Support: Phone: ELANCE ( ) (Monday 12:01 a.m. through Friday 12:00 a.m. Midnight Pacific Time) Online Help Topics:

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