Employee/Independent Contractor Classification Checklist

If the contractor is an individual, a test (based on IRS guidelines) must be conducted by the Project Director to determine whether the contractor would be considered a common-law employee or an independent contractor under IRS standards. (See, Exhibit H.) This form must be provided to the Finance and Administration (or Fiscal Affairs) Department.

1. If it is determined that the contractor would be considered an employee: The contractor will be paid through the payroll system and will be subject to federal and state income tax withholdings and the Banner account being charged for these services will be liable for fringe benefit expenditures, if applicable. Furthermore, a copy of a dual employment form, if appropriate, must be sent to the agency's Payroll and/or Human Resources Department.
2. If it is determined that the contractor would be considered an independent contractor: The contractor will be paid through Accounts Payable by way of the normal processing of vendor payments.