I have never freelanced or worked with freelancers, but if they turn in tasks after the deadline / not on par with your criteria, then you wouldn't have to pay them, right?

Also, overworking is a thing. I don't think your wife is being punished by lazy higher ups, I think your wife is exerting unnecessary energy into something she doesn't have to do, when the higher ups sees that she's fine with overworking / or doing a scheduled weeks work in a single day, instead of balancing it out - higher ups will most likely give you more work since they see that you're fine with it.

I rarely hear about people going down with stress related issues at their jobs, and have to take breaks from doing any work - but it's usually because they are too entangled in their jobs, it almost becomes their life at some point, so if they exceed their mental limit they might break down.