A screenwriter is hired for a negotiated fee to write or rewrite a script within a certain timeframe. The writer is guaranteed of payment if he/she fulfills the terms of the contract (and the employer honors the contract).
A work-for-hire generally consists of steps in which the writer receives a payment for each portion of the script that is delivered on schedule. Steps might include the beat sheet, treatment, first draft, producer’s draft, polish draft, etc.
Unfortunately, it is becoming more commonplace for studios to use “one step deals” in which the writer gets only one payment for one pass then is often asked to do extra drafts for free (usually to incorporate notes from the studio, the producer or talent). (also see Packaging a script) The WGA is trying to crack down on these abuses.
Work-for-Hire is generally only for experienced writers. A newcomer must be known for at least one quality spec script before being considered for work-for-hire jobs (see Spec Script).
A Work-for-Hire is also known as a writing assignment. The screenwriter is writing “on assignment” (with employer) as opposed to “on spec” (on their own).