3210 PR.02 Employee vs. Independent Contractor

Revision Date: 
July 1, 2017

* This procedure has been updated to accommodate Workday Financials business processes and terminology.  Please note the effective revision date.

Contents

1.      Purpose

2.      Accountable Official

3.      Employee vs. Independent Contractor Test

All individuals must be classified as either a University employee or as an independent contractor prior to providing services to the University, regardless of the amount of compensation to be paid. 

It is the responsibility of the lead administrator to make this determination regardless of the amount of compensation.  All determinations as to whether an individual is an independent contractor or an employee must be made in accordance with the University Employee vs. Independent Contractor Test.

The Chief Procurement Officer has responsibility for the systems, processes, effectiveness and efficiency of engaging external service providers at the University.

A.  If a business entity (i.e., corporation, partnership, Limited Liability Company, etc.) is engaged by the   University, go directly to Procedure 3210 PR.01 Professional Services and Consulting Process.

B.  The individual is generally an employee if the response to any of the following questions is yes: 

  • Is there a continuing relationship between the individual and the University?
  • Is the individual substantially full time to the University (i.e. 25 hours or more weekly)?
  • Does the individual perform the engaged services exclusively for the University (i.e., no similar services to other 3rd parties or clients)?
  • Does the University maintain control over the individual as to how the work is to be performed and/or what equipment to use and/or where to purchase supplies, including what workers to hire and which assignments must be performed by a specific individual?
  • Does the University provide training and detailed instructions as to how the work is to be performed and/or require it to be performed in a certain way/sequence?
  • Does the individual receive employee benefits, insurance, vacation or sick pay from the University?
  • Does the individual have the right to end the relationship without incurring any liability?
  • Will the individual receive predetermined earnings and have little chance to realize significant profit or loss through their services?  For example, the individual is not subject to a real risk of economic loss due to significant investments or a bona fide liability for an expense, such as salary payments to unrelated employees. 

If you have any questions related to Employees vs. Independent Contractors classification, please contact the University Tax Office at 203-432-5530.