Tax Compliance Guidelines
Employee vs. Independent Contractor - BC*

Activity: Employee vs. Independent Contractor - BC
Financial Policy: FIN-PAY-IV-220, Determination of Employee or Independent Contractor Status
Related Policies: N/A
Additional Forms: Independent Contractor Questionnaire
Things to Know:
  • Any individual performing services for the university will be presumed to work under the direction and control of the university and therefore deemed to be an employee unless the individual meets all of the independent contractor criteria, established within policy FIN-PAY-IV-220.
  • In general, all payments for the compensation of services that are made to university employees will be treated as employee wages. This includes both amounts of base pay, as well as supplemental payments of compensation made to university employees for services that they provide to the university, which are outside the normal scope of their employee appointment. An employee must complete the Independent Contractor Questionnaire in order to determine independent contractor status and be paid outside of payroll for services performed outside their duties as an employee.
  • An employee is an individual who performs a service for the university and is working under the direction and control of the university or its employees. Direction and control can be implied to exist when the employer has the right to control both the results as well as the means and methods of the worker. (IRS Treasury Regulation 31.3121(d)-1(c)).
  • An independent contractor is an individual engaged by the university to perform a specific function or task and who is free to perform this function or task completely at the individual's own discretion with regard to means and methods. No taxes are required to be withheld or paid on compensation disbursed. (IRS Treasury Regulation 31.3401(c)-1(b).

Please contact FMS Tax Department, for more information.

*BC - Budget Construction