Procurement of Goods and Services
This Operating Procedures Memorandum (OPM) is a reference tool and administrative procedural guide for University departments that make payments to independent contractors in order to assure that the University fulfills its tax withholding and reporting obligations in accordance with federal laws and regulations.
An individual may be retained for professional services as an independent contractor if a determination has been made, in accordance with the guidelines provided, that an employer-employee relationship does not exist. An individual may not be retained as an independent contractor using University purchasing procedures when the individual should be placed on payroll.
Departments are encouraged to complete the process outlined below in advance so that payment to the worker will not be delayed.
In simplest terms, if the employer does not control either the manner of performance or the result of the service, an independent contractor exits. Unfortunately, determining the correct classification is not always such an easy task. The IRS has provided a list of common law factors to assist employers in determining if the worker is an employee or independent contractor for tax purposes. These factors are included in the Independent Contractor Pre-Hire Worksheet. These factors should be used only as guidelines; every piece of information helps determine the extent to which the employer retains the right to control the worker. After reviewing the common law factors, the Departmental/Budget Director responsible for the work to be performed should determine whether the individual being paid for services to be performed should be classified as an employee or independent contractor. If the relationship is unclear after analysis, a determination of employee should be established. If assistance is needed in making this determination, please contact the Finance office. Note that an existing employee cannot be classified as an independent contractor.
To avoid misclassification the Department must complete an Independent Contractor Pre-Hire Worksheet. This form will help determine whether a worker is an employee or an independent contractor. It is for internal use only. Submit this form to the Finance Office for approval. Upon approval, you may continue with the process of requesting payment for the individual. This form meets the requirements of the W-9 form.
To request payment for performances, speaking engagements, or for services of one day or less, please obtain an “invoice” or “statement of work” for the contractor and attach a check request with proper signatures and account number to the Accounts Payable Office. If the contractor does not supply an invoice, complete the Contracted Services Form and submit to Accounts Payable. Request must be submitted to Accounts Payable at least 1 week in advance of event to ensure check will be ready in time.
For all other services, a Consulting Services Agreement is required. This is a contract, and must be signed by the Vice President of Administration and Finance. Attach this “agreement” to a check request and submit to Accounts Payable.
Reimbursement for travel expense will be made upon submission of payment request with original receipts attached.