What is an independent contractor?
An independent contractor (IC) is someone who runs his or her own business. Independent contractors are sometimes called consultants, freelancers, self-employed, individuals, sole proprietors and even entrepreneurs or business owners.
What criteria is used in deciding whether someone is an employee or an independent contractor?
The IRS looks at a number of factors when determining whether you are an employee or an independent contractor. The agency is more likely to classify someone as an independent contractor if they:
Once it is determined that a person is an Independent Contractor, what do we need to do to pay them?
The IC will need to complete and sign/date the Consultant/Independent Contractor and Disclosure Statement (also known as the Independent Contractor form). This form also needs to be signed by the department, the PI and OSP if PTAEO (grant) related. The department will need to create a requisition in eProcurement and attach the Independent Contractor form to the requisition.
Does an Independent Contractor really need to sign a written Independent Contractor agreements?
YES! Using a written agreement helps to avoid later disputes by providing a written description of the services the IC is to perform, when they are to be performed, and how much the IC will be paid. A written IC agreement can also help establish that a worker is an independent contractor. The IC form has their tax id number on it and only the IC can verify that number.
Last Updated: 6/18/13