Independent Contractor

or Casual Employee?

How to Complete the Employee/Independent Contractor Classification Checklist (EICCC)

Independent Contractor or Casual Employee?Office of Accounting

Cynthia Roberts, CPAFinance Manager • Travel• Independent Contractors• Scholarships• Taxes

Lori MonsonSenior Administrative Associate• Independent Contractors

Worker Classification

• Common Law Test

• Right to Direct or Control

• 20 Questions

• Behavioral control, financial risk, relationship of parties

Worker Classification• Behavioral Control

• Students• Supervision

• Financial Risk• Usually not an issue with the university• Flat rate vs. hourly rate

• Relationship of parties• Prior employment• Exclusive relationship (sole customer)

Independent Contractor/Employee Classification Checklist

• Who should complete the checklist?

• When should the checklist be used?

• When is a signature required in the Terms & Conditions for Federally Sponsored Projects box? Who signs in this box? When should the signature be obtained?

Completing the Checklist, Part I

Relationship with The UniversityPart I of the checklist should always be completed.

• Does this individual currently work for the university as an employee?

• Has an offer of employment been extended to this individual?

• Did this individual work as an employee of the university during the 12 months prior to the date of this contract?

Completing the Checklist, Part I

If the answer to any of the questions in Part I is “Yes,” STOP! The individual is classified as an employee.

If you answered no to all of the questions, you must proceed to Part II.

Completing the Checklist, Part II

Complete only

• Section A or B or C

• But not more than one, based on the nature of the services performed.

Part II: Section A, Teacher / Lecturer / Instructor

1. Is the individual an invited guest lecturer (includes seminar, colloquium, class, etc.)?

2. Has the individual been at the institution in this capacity fewer than four times in the past 12 months?

If the answer to both questions is “Yes,” STOP. Treat the individual as an independent contractor.

If the service is teaching or lecturing, and the answer to question 2 is “No,” proceed to Question 3.

Part II: Section A (cont.)

3. Is the individual teaching in a course for which students will receive credit toward a university degree?

If the answer is “Yes,” STOP. The individual is classified as an employee.

If the answer is “No,” proceed to Question 4.

Part II: Section A (cont.)

4. Has the individual provided the same or similar services as an ongoing business to other unrelated entities in the past 12 months?

5. Does the university have any control over course materials that are used by the individual?

If the answer to Question 4 is “Yes” and the answer to Question 5 is “No,” treat the individual as an independent contractor. Otherwise, treat the individual as an employee.

Part II: Section B, Researcher

1. Will the individual perform research under the supervision of a university professor or employee?

If the answer to Question 1 is “Yes,” treat the individual as an employee.

Part II: Section B (cont.)

2. Will the individual serve in an advisory or consulting (collaborative) capacity with a university professor or employee?

If the answer to Question 2 is “Yes,” treat the individual as an independent contractor.

Part II: Section C, Individuals not covered Under A or B

1. Has the individual provided the same or similar services to other unrelated entities or to the general public as a trade or business during the last 12 months?

Generally, independent contractors will provide services to the general public and will have more than one customer.

Part II: Section C (cont.)

2. Will the department provide the individual with specific instructions regarding performance of the required work rather than rely on the individual’s expertise?

Part II: Section C (cont.)

3. Can the university set the number of hours and/or days of the week that the individual is required to work, as opposed to allowing the individual to set his/her own work schedule?

If the answer to Question 2 or 3 is “Yes,” treat the individual as an employee.

Thank you for viewing this presentation.

For more information, contact:

User ServicesFinancial Information Systems

512-471-8802oa.askme@austin.utexas.edu

For more information, contact:

User Services

Financial Information Systems

512-471-8802

oa.askme@austin.utexas.edu