Purpose
The purpose of this documents is to outline the policies
and procedures related to independent contractors doing
business as individuals rather than companies.
Standard Services Invoice ($1-$4,999)
If the following criteria are met then you may use
the Standard Services Invoice (SSI) procedure outlined
below:
The services performed were less than $5,000
in total for the entire project.
The time frame to complete the entire project
was less than 6 months.
The services performed were by an individual
(not a partnership, corporation, or other organization).
Payment is to be made in one lump sum after
completion of work.
Independent Contractor Agreement
If the SSI criteria are not met and payment is to an
individual between the amounts of $5,000-$25,000 then
you must follow the Independent Contractor procedure
outlined below.
Independent Contractor over $25,000
If the total dollar amount paid to the independent
contractor will be $25,000 or greater, even though the
payment will be made to an individual, then the purchasing
procedures related to competitive pricing and bidding
must be followed. Contact the Purchasing Office at 351-2288
for further clarification.
Be prepared to give a general
description of the service you require as well as a
more detailed description of the product or result of
the work performed by the independent contractor, information
about the length of time the service must be provided,
and qualification criteria the independent contractor
must meet. Purchasing procedures define reasonable time
for notice and response by qualified respondents; in
the case of a formal bid the minimum solicitation time
is 14 days and for a request for proposal the minimum
solicitation time is 30 days.
Companies
When payments are made to a company, the normal purchasing
procedures related to competitive pricing and bidding
should be followed and payment will be made on a PO
or DPO depending on the dollar limit.
Definitions
A careful evaluation must be made when classifying
an individual as an independent contractor rather than
an employee. An erroneous classification of an individual
as an independent contractor when in fact the person
is an employee could result in legal action being initiated
by the Internal Revenue Service for violation of the
Wage and Hour Laws relative to the withholding of taxes.
In questionable situations, it is best to classify
the individual as an employee.
Independent Contractor - An individual who is
responsible to the University for the results of certain
work but is not subject to the Universitys controls
to the means and methods of accomplishing those results.
Some examples of independent contractors are: entertainment
performers, guest speakers, officials for athletic events
and consultants.
Briefly, an independent contractor generally:
- Has a place of business and a business listing in
a directory when the services are offered to the public.
- Selects the clients and is free to work for one
or more during any given interval.
- Determines the time and place work will be performed.
- Provides the tools and materials needed to perform
the work.
- Does not participate directly or indirectly in
the benefit programs of the University.
- May agree to perform specific services for a fixed
price and generally does not receive regular amounts
at stated intervals or is not reimbursed for business
expenses.
Employee - An individual who is subject to the
will and control of the employer not only as to what
shall be done but how it shall be done. It is not necessary
that the employer actually direct or control the manner
in which the services are performed; it is sufficient
if the employer has the right to do so.
Some of the usual characteristics of an employee are:
- The right to terminate the relationship with the
employer at any time.
- The furnishing of tools and a place to work by
the employer.
Refer to Preparing
a Personal Services Classification Analysis for
a complete list of questions to be answered for determination
of the proper classification between independent contractor and employee.
Documentation And Reimbursement
Download the Personal Services Classification Analysis (Word)
The Personal Services Classification Analysis form
is
completed in consultation with the contractor in order to determine the status of the
person. If it is determined that the person is an independent
contractor, the Independent Contractor Agreement for
Individuals form
must be prepared and the appropriate signatures secured.
The completed Independent Contractor Agreement and the
Personal Services Classification Analysis form are submitted
to the Accounts Payable Office at least two weeks before
any work is done. The Accounts Payable Office will review
the contractor agreement and the analysis form and will
acquire all other signatures required and then initial the
contractor agreement. Both forms will be returned to
the Department after review.
If after review it is determined
that the worker is not an independent contractor the
Department will be contacted and a different means of
payment will be discussed.
When requesting payment, the
original forms are attached to a completed check request
form (see Preparing a
Check Request Form) and submitted to the Accounts
Payable Office.
Multiple Payments
If partial payments are to be made, the original forms
are attached to the first check request. Subsequent
check requests should have copies of both forms attached
with an original signature certifying the work was done
satisfactorily on the bottom of the contract for each
multiple payment request. Also indicate on page two of the agreement the amount of payment
being made and how much has been paid on previously
submitted payment requests.
Exclusions
Materials purchased or services provided by firms or
businesses are to be paid through the purchasing procedures.
The following categories of individuals are not considered
independent contractors and therefore are paid through
the Human Resources department.
- Continuing Education faculty.
- Individuals who are considered employees of the
University in another capacity.
- A former employee who has been called back to train
a new employee in their former position.
- A contractor who is performing the same tasks an
employee would perform.
Special Considerations
Students Employed by the University - Students
employed by the University (work-study, hourly, GA
or TA) cannot be paid as independent contractors.
Example: A Graduate
Assistant in the College of Education plays in a musical
combo for a reception on campus. Contact Student Employment to determine the payment method for the additional services performed by these individuals.
Former Employees of the University - Individuals cannot be paid as independent contractors and employees in the same calendar year. Therefore, if you will be paying an individual for services who is not a current UNC employee, but was paid as an employee at any time during the current calendar year, they cannot be paid as an independent contractor. Contact Student Employment or Human Resources to determine the appropriate payment method.
How to Complete the Personal Services Classification
Analysis
The Personal Services Classification Analysis is a series of 20 questions designed to assist you in determining whether the individual you will be paying for services will be acting in the capacity of an employee vs. an independent contractor.
For a copy of the form and a detailed definition of each question see Instructions for Preparing the
Personal Services Classification Anaysis.
The 20 questions on this analysis are taken from the Social
Security Administration internal procedures manual. They are general guidelines intended to aid in classifying
workers as employees or independent contractors and
are not intended to compel a particular conclusion.
The weight given to these factors is not always constant.
Their degree of importance may vary somewhat depending
on the work being performed.
Some of the questions will not apply to particular services. Judgment and discretion should be used in
applying these guidelines.
When completing the Personal Services Classification Analysis, indicate the contractor's name on the first page. Page two is to be signed by the project director, department head or Dean.
How to Complete the Independent Contractor Agreement
| THE INDEPENDENT CONTRACTOR FORM IS INTENDED TO
APPLY TO GUEST SPEAKERS, CONSULTANTS, AND
PERSONAL SERVICE PROVIDERS WHERE PAYMENT DOES
NOT EXCEED $25,000. THIS FORM IS NOT LEGALLY SUFFICIENT
FOR CONSULTANTS WHOS SELECTION IS GOVERNED
BY SECTION 24-30-1401, et. Seq., Colorado Revised
Statutes. |
- Fill in the date the agreement is being made.
- Fill in the name and address of the contractor, as it should
appear on the check and the 1099 tax form.
- Complete the performance section giving a complete
a description of the service(s) to be provided.
- Indicate where the services will be performed. If any services will be performed outside of Colorado or the United States, please attach the Vendor Disclosure Statement.
- Note the beginning and ending dates of service.
- Indicate the dates and description of deliverables. Be specific. Do not use Contractors Choice (or
similar terms) for the above information.
- Note the contract amount and documentation of fair pricing if needed.
- Indicate the specific payment dates and payment amounts.
- Enter the FOAPAL(s) to be charged.
- Enter the Department Name responsible for
the contract.
- The person authorized on the FOAPAL should sign
and date the proper line.
- The contractor should sign and date on the proper
line and include address and phone number.
- Have the contractor complete form W-9 and attach
to the contract. CAUTION: Contracts with Non-Resident
Aliens, i.e., individuals who are not citizens of
the US, will require additional IRS forms to be
completed before payments can be made.
- Send the completed, signed contract and attachments
to Accounts Payable BEFORE THE CONTRACTOR BEGINS
WORK. Accounts Payable will obtain signatures from the Grants and Human Resources departments and approval from the State Controller
designee.
After the contract is approved, it will be returned
to the department. When service is complete or payments
are required, the person authorized on the FOAPAL will
sign and date on the appropriate line,
attach the check request, and submit the completed and
approved documents to Accounts Payable.
| This agreement may be adapted only with respect
to description of services, delivery locations,
delivery/performance times and dates, price and
payment terms (including reasonable cancellation
fees in the case of entertainment/speakers engagements),
and insurance requirements. Descriptions may be
attached
where the space is inadequate on the form. Other
specially drafted provisions, or any other additions
to or revisions of the Conditions and Special Provisions,
require State Controller approval (and legal
review), regardless of the agreement value. |
Questions should be directed to Terri Thomas, 1-1836.
How to Complete
a Standard Services Invoice (SSI)
Download
the SSI Form
|
THE SSI FORM IS INTENDED TO APPLY TO GUEST
SPEAKERS, CONSULTANTS, AND PERSONAL SERVICE PROVIDERS
WHERE PAYMENT IS LESS THAN $5,000.
THE FOLLOWING CRITERIA MUST BE MET IN ORDER TO
USE THE SSI DOCUMENT; OTHERWISE AN INDEPENDENT
CONTRACTOR FORM MUST BE USED.
The services performed were less than $5,000 in
total for the entire project.
The time frame to complete the entire project
was less than 6 months.
The services performed were by an individual (not
a partnership, corporation, or other organization).
Payment is to be made in one lump sum after completion
of work. |
- Fill in details of the services performed.
- Fill in the following:
- Place service was provided
- Service begining and ending dates
- Lump sum payment amount
- University department name
- Department contact name and phone number
- University FOAPAL(s)
- The person authorized on the FOAPAL should sign
and date the proper line.
- Check the box that applies (Dept will pick up check
or mail to provider).
- Have the service provider fill out his/her name,
address and phone number.
- Have the service provider sign and date the proper
line.
- Complete the Verification of Non-Employee Status
information (Page 3).
- Have the contractor complete form W-9 and attach
to the contract. CAUTION: Contracts with Non-Resident
Aliens, i.e., individuals who are not citizens of
the U.S., will require additional IRS forms to be
completed before payments can be made.
- Send the check request, SSI, and W-9
to Accounts Payable for payment. It should be submitted
for payment after the services are complete unless
the Department will deliver the check to the service
provider upon completion of the work.
Questions should be directed to Terri Thomas, 1-1836.
How to Complete a Check Request Form
Download a Check
Request Form
- Date - Enter the date the document is being
prepared.
- Department Name - Enter the name of the
department that is responsible for the payment.
- Originator Name and Phone # - Enter the
name and phone number of the person who is to be called
if there is a question or problem concerning the payment.
- Authorized Signature - Only a person who
is authorized on the FOAPAL being charged can sign.
If more than one FOAPAL is being charged there
must be an authorized signature for each account.
- Bear Number Identification # - Enter the bear number, if known, of the person being paid.
- Vendor & Address - Enter contractor's
name and a complete address.
- FOAPAL - Enter the FOAPAL(s)
to be charged.
- Amount - Enter the total amount to be charged
to the FOAPAL on that line.
- Check Stub Information - This is the information
that is printed on the check stub for the contractor.
Please be concise and use meaningful abbreviations.
|