Hiring a Service Provider

University schools and departments may contract for the purchase of Professional Services to accomplish the objectives of the University when such Services are specialized, highly technical, and cannot be economically or satisfactorily performed by University Employees as part of their normal duties.

Professional Services is providing advice in a particular area of expertise. Specific types of consulting include Environmental Consulting, Consulting Software Engineer, Human Resource Consulting, IT Consulting, Management Consulting, etc.

Prior to working with the Consultants, a Certificate of Insurance (COI) is REQUIRED which we reference in a separate section with a sample ACORD COI. University departments shall review the insurance requirements on the University Risk Management website and comply accordingly. The Service Provider Grid referenced in the website outlines the insurance requirements per type of Consultant which may be of lesser value. Service Providers are used for specific tasks and for explicit periods of time. Service Providers can be business firms or individuals who are not Employees of the University.

http://finance.columbia.edu/treasury/risk_management/documents/
MinimumInsuranceRequirementsForContracts1-1-0822008.pdf

Payments to Service Providers must be made in full compliance with all United States government laws, orders and regulations. Specific issues related to payments are referenced throughout this section.

Agreements not addressed in this section include:

Revenue Generating Agreements
Contracts wherein the University provides services, facilities or products for compensation. Please contact the Office of the General Counsel for further information.

Intellectual Property Rights or Technology Transfer Agreements
Contracts wherein the University provides intellectual property rights or technology transfer to outside entities for compensation. Please contact Science and Technology Ventures (STV).

Revenue Neutral Agreements
Contracts such as non-disclosure agreements, student placement agreements (including internships, student teaching, etc.), affiliation agreements with other institutions or settlement agreements (personnel or lawsuits).

Certain words appear frequently throughout this policy and have the following meanings:

Agreement
An agreement is a mutual, written agreement between The Trustees of Columbia University in the City of New York and another entity whereby each party is required to perform certain obligations to satisfy the agreement. An agreement may or may not require the transfer of funds, the transfer of tangible property, and/or the issuance of a Purchase Order. An agreement is required to protect the University's title to all materials produced by the Service Provider, and protects the University on issues concerning insurance, indemnification, and confidentiality. In addition, the University must comply fully with federal tax code and IRS guidelines regarding the hiring of individuals as Independent Contractors (Consultants) or Employees.

Employee
An individual performing work where the University has the right to control not only the services performed, but also the means and methods of accomplishing the work. Typically, an employee's work is performed in service of the mission of the organization. In the case of the University this includes, but is not limited to research, teaching and administration.

Employer/Employee Relationship
An employer/employee relationship exists when an employer has the right to direct and control the work of an individual who performs the services, including not only the results to be accomplished but also the methods and means by which the results are accomplished. Even if the employer does not exercise the right to direct or control the manner in which the worker performs the services, the fact that the employer retains the right to do so is sufficient to create an employer- employee relationship.

Independent Contractor
An Independent Contractor is a business firm or an individual that contracts with the University to provide services for which the University controls or directs at most the result of the service, not the means and methods of accomplishing the result.

Scope of Work
A complete description of the goods or service being procured by the user and the needs of the user. This can be done either through performance specifications setting forth the minimum acceptable performance standards for the end product, or through a description of the tasks to be performed (see sample SOW).

Service Provider (uses University Commodity Code 85xx — see Service Provider listing)
A Service Provider or sometimes referred to as a Consultant is either a business firm or an individual (who is not a University employee) who contracts with the University to perform a service.

Sole Proprietor
A self-employed Service Provider, without a partner or Employees.

General Services (Other Than Professional)
A General Services contract is used for the purchase of useful manual skills or labor that may or may not produce a tangible commodity.

Examples of these services include, but are not limited to: Security Guard Services, Transportation Services, Clothing Rental and Cleaning, Laundry, Film Processing, Janitorial Work, Window Washing, Rubbish and Waste Removal, and Service and Repairs to Equipment.

Please refer to the University Purchasing policy for the acquisition of such services at:
http://www.columbia.edu/cu/administration/policylibrary/
responsible_office/pchs.html

Construction Services
(Including Architectural & Engineering Services)
A Construction Services contract is used to procure construction related services that are obtained through the appropriate Facilities Management Department (i.e. Architects, Engineers, Construction Managers, etc.).

The process for acquiring such services is described at:
http://www.columbia.edu/cu/administration/policylibrary/policies/posc/
257.html?base=responsible_office

Professional Services
Professional Services means those services provided under an agreement with the University by a business firm or individual acting as an Independent Contractor and qualified by education, experience and/or technical ability as defined below. An essential element distinguishing Professional Services from other services is confidence, trust and belief in not only the ability but also the talent of the individual(s) performing the services. Professional Services are primarily for intellectual or creative skills. Agreements for services involving primarily manual skills or labor are not considered Professional Services agreements. If the Professional Services agreement is with a business entity, the individuals whose education, experience, and technical ability provided the basis on which the business entity was selected must meet the required qualifications.

Professional Services are further defined as follows:

• Qualified by education means the individual(s) must have obtained the level of education required to provide the requested services.
• Qualified by experience means the individual(s) must have the level of general experience required to provide the requested services.
• Qualified by technical ability means the individual(s) must demonstrate a high degree of skill or ability to provide the requested services.

A detailed list of specific Professional Services can be found in the Professional Service Categories section of this site. For other services not specifically listed, the Purchasing Department, using the factors identified above, will determine on a case-by-case basis whether such services qualify as Professional Services. Any services identified as Professional Services must be procured in accordance with this section.

The policies and procedures to contract for Professional Services are based on the total anticipated fees and allowable expenses for the duration of the contract including all renewal periods. For any Professional Services agreements entered into with individuals, departments must follow the administrative procedures outlined in Classification of Independent Contractors versus Employees section of this policy.

Guidelines for Selection of Professional Services Provider

• A determination is made that the services cannot be performed more economically or satisfactorily through the University employment process.
• An appropriate and competitive selection process is used to secure the most qualified firm or business entity or person available, subject to the constraints of timeliness and costs. Note: A competitive process should be done each time an agreement has expired.
• Charges are appropriate considering the qualifications of the Independent Contractor, the Contractor's normal fees and the nature of the services.
• Conflict of interest is avoided. In general, the following individuals are prohibited from contracting with the University:
• Members of The Board of Trustees
• University Officers and Employees
• One's Spouse and Minor Children
• If the services are to be provided by an individual and not by a business entity or firm, the Service Provider is properly identified and classified as an Independent Contractor versus an employee. The first step in contracting is to make this classification determination using the University's policy and guidelines contained in Classification of Independent Contractors versus Employees section of this policy.
  
  Note: The Internal Revenue Service (IRS) may impose penalties on an employer that fails to correctly classify an individual as an employee and thereby fails to withhold the required income and employment taxes. If an individual is classified as an employee, departments should contact Central University Human Resources for information and assistance on how to process an appointment or payment for the individual in question.
• In unusual cases where consultation is across organizational lines, and the work performed is in addition to the individual's regular workload, special approval may be requested from the Office of the General Counsel and Human Resources to enter into a separate consulting contract with the employee, including payment of a reasonable and customary consulting fee. This fee is in addition to the employee's salary as an employee. The Office of the General Counsel and Human Resources are authorized to approve such consulting arrangements with an employee only if the services are deemed essential to the University. If such a request is approved by these respective offices, a written copy of the approval must be provided to Purchasing along with the other required supporting documents to process the Purchase Requisition.
  
  In addition, if a University employee is paid a Consultant fee or additional compensation from restricted funds provided by the U.S. government, prior written approval must be obtained from the sponsoring agency.
  
  Additionally, Sponsored Projects Administration (SPA) should also be contacted relative to information regarding possible payment limitations.
  
  
  • Procedures for contracting for Professional Services with resident aliens are the same as detailed in this section. No Immigration and Naturalization Service (INS) or IRS restrictions exist regarding contracting with resident aliens for services.
  • Instructions for contracting for Professional Services with nonresident aliens as Consultants, scholars, and dignitaries who will receive a University payment for services can be found in http://finance.columbia.edu/procurement/ap/
    foreign_payments/ForeignEntities.html. This includes University payments either directly to or on behalf of the nonresident alien for services as an Independent Contractor or expenses (i.e., Hotel, Meals, Transportation, etc.). Services as an Independent Contractor include Lecturing, Consulting, or Other activities for which the nonresident alien provides a service for payment to the University.

Before services commence, the department should ensure that all required documentation for contracting for a Service Provider has been completed PRIOR to the performance of any service(s).

Department should not sign any document presented by Service Provider (i.e. Letters of Intent, Engagement Letters, Scope of Work, Agreements, etc.) without first providing these documents to Purchasing for review.

Payment may not be made to the Contractor without a fully executed Purchase Order. Note: There will be EZ-POs only with UWPA Vendors (i.e., Apple, Dell, etc.).

Please make sure the Scope of Work Value agrees to the Requisition Value prior to submission. You can create a PO for the full amount and encumber any amount you choose up to the PO value.

Before services commence, the department should complete and submit the following documents to the Purchasing Department for review and processing.

• Scope of Work — The SOW should clearly articulate the deliverables, expectations and responsibilities of both the Service Provider and the customer.
• Independent Contractor Verification Worksheet (Sole Proprietor only) — Determines Independent Contractor status.
• Service Provider Questionnaire (first time Service Providers only) — Provides information about Service Provider that is entered into the Purchasing system, also known as CAPS.
• Business Associates Addendum — If services will involve the sharing of Protected Health Information (PHI), the provisions of the Health Insurance Portability and Accountability Act (HIPAA) apply. Please have Karen Pagliaro-Meyers sign prior to submission.
• Client List — List of Current Service Provider Customers.
• Resume or CV
• Corporate Brochure
• Competitive Bids and Analysis — Recommended always, regardless of $ threshold.
• Certificate of Insurance — In accordance with the Service Provider Agreement
• Requisition Checklist
• Service Agreements DAF Policy
• Professional Service Categories — Below is a drop down list of the different types of Consulting Service Providers with their respective Commodity Code, Agreement for that Service Provider where applicable and PO only with SOW (Note: Agreement is not necessary for these Service Providers however a SOW is necessary.)
  
  With each new Requisition, unless Purchasing has on file, a Master's Agreement, you must provide all the necessary Supporting Documents to process the Requisition. All Requisitions for Service Providers REQUIRE SOW; however some Service Providers REQUIRE an Agreement while others will only REQUIRE the PO to satisfy the contractual obligation.

The University uses freelancers in a variety of areas, including as authors for University publications, Copyediting, Proofreading, Book Review, Indexing, Competition Judges, Typesetters, and Foreign Translating Services (Literary Only).

In the absence of a written agreement, the freelance author of an article will in general own the copyright. Accordingly, it is important that there be a written contract with a freelancer for the writing of any article or other work commissioned by a School or Division at Columbia, and that the contract be signed in advance of creation of the work.

There are two main categories of freelance writers: (1) those who create articles, books and other intellectual property on their own initiative, who then look for someone to publish the works; and (2) those who are hired under contract to write articles and the like in accordance with certain specifications.

In general, writers in the first category seek to retain the copyright in their works, while writers in the second category do not. Individuals who are hired by Columbia to create articles and other works generally fall into the second category of freelance writers; thus copyright should be held by Columbia.

As noted above, there should be a written agreement with the writer, signed in advance, that addresses this issue.

Copyright Ownership

While in most cases Columbia will own the copyright in works produced by freelancers, in some situations, Columbia may agree to transfer the copyright back to the author after some period of time, retaining, however, the perpetual nonexclusive right to republish the work in any medium. In other cases, depending on industry custom, the author may not assign copyright at all, and instead grant Columbia a license to publish the work.

In cases where Columbia does obtain the copyright to a work created by a freelancer, it can be through the “work-for-hire” doctrine under U.S. copyright law, or through an assignment of the copyright to Columbia. Under the work-for-hire doctrine, the writer is not even considered the author of the work. Rather, Columbia would be considered the author. In order to qualify as a work-for-hire, three conditions must be met: (i) the work has to be specially ordered or commissioned, (ii) there must be a written agreement before the work is created that the work will be considered to be a work-for-hire; and (iii) the work must fall into one of a number of specific categories listed in the Copyright Act. Contributions to a collective work, like a magazine, and translations of works, fall into these categories. Thus, an article commissioned by a School at Columbia for publication in a Columbia journal, or an article commissioned by UDAR to be written for Columbia Magazine, could be treated as a work-for-hire if there is a written agreement, signed in advance, that provides for work-for-hire treatment.

In academia, work-for-hire status is often looked down upon, so many academic journals, including some journals at Columbia; do not seek copyright ownership through the work-for-hire doctrine. Rather, copyright ownership is obtained through an assignment of copyright by the author to the journal. Because not all works qualify for work-for-hire status, any contract with a freelancer where Columbia claims copyright ownership should contain an assignment of copyright, irrespective of whether it also claims ownership through work-for-hire.

Categories of Freelancers: Form of Agreement

Absent special circumstances (e.g. 3rd party authors also involved), the following categories of freelancers will be contracted through a simple writer’s agreement similar to those attached to this document. This writer’s agreement would accompany the request for any payment through Accounts Payable and no Purchase Order would be required. The agreement would set forth copyright ownership, scope of rights granted to Columbia and reserved to author, and contains representations that the work does not infringe the rights of any third party, is original, not previously published, etc. The agreement would not require the writer to carry liability insurance (which generally would have low value for Columbia, as general liability policies do not normally cover copyright infringement, the most likely area of risk for the University). For those categories that do not require a writer’s agreement, these would be submitted to Accounts Payable for payment without a Purchase Order.

Note:  If a Supplier is interested in editing the Service Agreement once they have reviewed the one you sent them from the drop down menu below, please follow these steps below which involves Purchasing sending the Microsoft Word version to track all changes during the negotiation process:  

1. Department/School needs to contact Purchasing to request a Word Version of Service Agreement
2. Department/School to provide Supplier Contact Information, Department/School Main Contact for the Engagement and a Scope of Work (To ensure correct Service Agreement is being used)
3. Purchasing will send Word Version of Service Agreement to Supplier and cc Department/School contacts (Main Contact and the person processing the Requisition)
4. Supplier to make edits for audit trail purposes to ensure understanding of changes for Purchasing
5. Supplier will return to Purchasing directly for review
6. Purchasing will communicate with Supplier for negotiations and provide a separate email to Department/School of status, as appropriate
7. Once finalized, Purchasing will send final version to Department/School and Supplier
8. Supplier will send signed copy to Department/School for submission for Requisition

If you do not see the Commodity Code you are looking for, contact Purchasing for assistance.

Note: Accountant (auditing related services) — require review by Controller. Will use LOE or LOI and incorporate CU terms as required.

Note: PO only highlighted in green with SOW, agreement not necessary.

For any Service Provider modification requests to the standard University Agreement, Purchasing will review and provide a response to such requested modifications to the agreement, obtain OGC and/or Risk Management approval (if necessary) and official University signatures for execution of the contract. After the contract is fully executed (signed by both parties), Purchasing distributes the document providing an original to the Service Provider and an original is maintained in the Purchase Order file as a permanent record.

Total Fees and Allowable Expenses of $25,000 or Greater
Requirements for Professional Services at this dollar level should be addressed through a competitive selection process.
http://www.columbia.edu/cu/administration/policylibrary/policies/pchs/
40.html?base=responsible_office
Purchasing can work with Schools and Departments in the issuance of a Request for Proposal (RFP), Contract Forms and Other Documents.

Departments should complete the Professional Services Information Form (PSIF) to gather information to prepare the RFP. Departments should submit their recommendation for contract award to Purchasing in the form of a memo or spreadsheet when submitting supporting documents to Purchasing. For planning purposes the department should allow at least 2 months for completion of an RFP process.

Following selection of the Contractor and before services commence, an executed contract and Purchase Order must be in place. Purchasing works with the Department to finalize the contract, reviews it for compliance with the requirements and obtains the official signatures of both parties.

Waivers of the Competitive Selection Process
(contracts over $25,000)
In exceptional circumstances, the Purchasing Policy allows for a waiver of the requirement for a competitive selection process for agreements in excess of $25,000. Exceptional circumstances include, but not limited to services available from ONLY ONE SOURCE OR EMERGENCY PROCUREMENTS. A single/sole source may be justified when only one Service Provider is deemed economically feasible or when a requirement is available only from a single supplier.

To utilize a waiver of the competitive selection process, the department must submit a request through FFE in conjunction with the Purchase Requisition process and signed off by the appropriate Supplemental Approver. The request must include the following information:

• Rationale for the Selection (i.e. Proprietary, Emergency, etc.).
• Cost Reasonableness — Explanation of how the fees assessed by the Service Provider are competitive and reasonableness.

Sponsored agreements funded by the U.S. government or other sponsors may include a named subContractor for the provision of specific professional or artistic services, including consulting services. Procurement of such services does not require a competitive selection process provided the Contractor meets the criteria for professional services and is specifically named in the original grant proposal or award, or if the sponsor provides other written approval of the specifically named subContractor. If the need for an independent subContractor can be anticipated, the proposal to the funding agency may include the name of a preferred subContractor.

If the subcontract is for Professional Services, including consulting services, and will not be with a named or sponsor-approved subContractor, the appropriate documentation for the dollar level of the subcontract as described elsewhere in this section must be furnished to the Purchasing Department.

Reimbursement Restrictions
Independent Contractor fee
(Excluding Allowable Expenses) — Independent Contractor fees paid from U.S. government grants of contracts may not exceed the current daily equivalent rate paid a United States GS-18 unless specific advance written approval is received from the sponsor.

Concurrent Service — If during the duration of the contract, an individual is also being compensated at 100% time for services from other funds provided by the U.S. government, regardless of whom the employer may be, such individual may not receive a fee. The individual may be reimbursed by the University only for actual and reasonable allowable expenses. Any exceptions require prior written approval from the sponsoring agency.

Other Restricted Funds — Services of Independent Contractors may be utilized subject to the terms and conditions of award documents. If an award document prohibits or restricts the use of an Independent Contractor, prior written approval must be obtained from the sponsor to secure such services.

The University classifies and pays individuals who provide services as Employees, unless the nature of the services and other circumstances satisfy the criteria for Independent Contractor status. Section 3121(d) (2) of the Internal Revenue Code (IRC) provides that the term "employee" means any individual who, under the common law rules applicable in determining the employer-employee relationship, has the status of employee. The Internal Revenue Service (IRS) ignores contract labels, and instead examines the facts and circumstances of each situation and analyzes specific characteristics, such as behavioral and financial control and the relationship between the employer and the individual performing services, before a determination can be made whether the individual is classified as an employee or an Independent Contractor under common law.

An example of behavioral control is when the Department/School provides direct instruction/supervision of the contracted provider. Service Providers are Independent Contractors and as such are not overseen by the contracting party in this manner. They supervise their own actions to accomplish the goals and expectations articulated through an agreement and Scope of Work.

Once an employer-employee relationship is established, the employer is required to withhold the appropriate income and employment taxes. Penalties may be imposed by the IRS in instances where the employer fails to properly withhold such taxes.

This section incorporates the IRS guidelines that are currently in effect.

Before the performance of services commence, departments contracting for services must assess the relationship with the individual providing services to ensure that individuals hired or contracted to perform services are properly classified as an employee or an Independent Contractor. An initial misclassification may result in a substantial delay in payment.

It is the University's responsibility to designate an individual's status as an employee or an Independent Contractor. Please refer to IRS website for a detailed explanation.

http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

Employee — An individual who performs services subject to the employer's right to direct and control the work is classified as an employee. The employer can allow the employee considerable discretion and freedom of action, provided that the employer has the legal right to direct or control the work.

Former University Employee — A former employee whose services are requested by the University to perform the same or similar service within twelve (12) months from the date of the last pay period is usually classified as an employee. However, each situation should be analyzed first from the IRS's perspective and written approval must be provided by General Council and Human Resources.

The three main categories for determining whether a relationship should be categorized as an employee or Independent Contractor are:

• Behavior Control
• Financial Control
• The Individual's Relationship with the University

(see the section Common Law Rules for additional information).

Also, the 20 Common Law Factors should be evaluated before making the determination of Contractor versus employee.

Independent Contractor — An individual who performs services wherein the employer has the right to control or direct only the result of the work, but not the means and methods of accomplishing the result, is classified as an Independent Contractor.

Unless otherwise exempt from required withholdings, the University is required to withhold certain deductions from University-based wage payments. If the individual is classified as an Independent Contractor, the University is not responsible for withholding income and employment taxes. However, the University is responsible for reporting compensation over $600 paid to individuals who are classified as Independent Contractors on Form 1099-MISC, Miscellaneous Income to the IRS.

The IRS may assess penalties for misclassification of an individual providing services to the University. If an individual is determined by the IRS to be an employee instead of an Independent Contractor, the University may be held liable for the individual's employment taxes, penalties and interest assessed for not withholding income and employment tax, and a separate misclassification penalty.

Note: As provided under IRC Section 3509, an employer is liable for 1.5 percent of wages paid if the employer erroneously treats the individual as a nonemployee for Federal income tax withholding purposes, and the penalty increases to 3 percent if no information returns were filed. The department will be responsible for the payment of additional taxes, penalties, and interest assessed.

However, liability for Federal employment taxes may be relieved under Section 530 of the Revenue Act of 1978, also commonly referred to as Section 530 Safe Haven Relief. Section 530 Safe Haven Relief protects employers who have consistently treated workers as Independent Contractors. The rule provides that an individual who has not been treated as an employee will not be reclassified as an employee if (1) the employer had a reasonable basis for not treating the individual as an employee, (2) the employer did not treat the individual or any individual in a similar position as an employee for payroll tax purposes, and (3) the employer has filed all required Federal tax returns, including information returns, in a manner consistent with the individual not being an employee.

Prior to 1997, the IRS used twenty common law factors derived from case law and rulings in determining whether an individual performing services is classified as an employee or an Independent Contractor. However, all factors were not necessarily pertinent or present in all situations. Also, as previously mentioned, all the facts and circumstances of each case need to be considered. Additional relevant information that assists in determining the extent to which the individual or employer for whom services were performed retained the right to control should also to be considered.

Therefore, although the twenty common law factors referenced below are still taken into account, simply another way of analyzing the pertinent factors is to focus on (1) behavioral controls, (2) financial controls, and (3) the relationship between the employer and the individual performing services. These three main categories are described below and additional detailed information may be found at IRS Publication 1779, Independent Contractor or Employee and at IRS Publication 15-A, Employer's Supplemental Tax Guide under the "Employee or Independent Contractor?" section.

Behavioral Control
Behavioral controls are evidenced by facts that determine whether the employer has a right to direct and control how the individual performs the tasks for which the individual is hired, including the type of instructions the employer gives the individual and how the individual obtains training for providing such services.

Financial Control
Financial controls are evidenced by facts that determine whether the employer has a right to direct or control the financial/business aspects of the individual's business activities, including (1) the extent to which the individual is reimbursed for business expenses, (2) the extent of the individual's investment in the business and whether a profit or loss is realized, (3) the extent to which the individual offers similar services to the relevant market, and (4) how the employer pays the individual, such as hourly, salary, or a flat fee.

Type of Relationship
The relationship between the individual performing services and the employer is evidenced by examining how the employer and the individual perceive their relationship, including:

1. Whether a written contract exists explaining the employer's and individual's intent,
2. The provision of, or lack of employee benefits,
3. The permanency of the relationship,
4. The right to terminate the relationship, and
5. The extent to which services are performed that are a part of the employer's regular business activities.

Twenty common Law Factors
Revenue Ruling 87-41, 1987-1 Cumulative Bulletin 296 (Rev. Rul. 87-41) provides the list of 20 Common Law Factors to assist in determining whether an individual should be classified as an employee or an Independent Contractor. These factors are intended as guidelines, not as strict rules. In fact, Rev. Rul. 87-41 states, "The degree of importance of each factor varies depending on the occupation and the factual context in which the services are performed." Listed below are five basic questions that capture the essence of the twenty common law factors, which may assist in clarifying the determination of employment status:

• Will this individual provide essentially the same service as provided by a University employee?
• Has the individual previously been paid as a University employee to perform essentially the same tasks?
• Will the University have a legal right to control how the individual will perform or accomplish the service?
• Will the individual supervise or direct University Employees as part of the service provided?
• Is it currently expected that the University will hire this individual as an employee immediately following the termination of the contractual service provided?

If the answer to any of these five questions is yes, then the individual provider in question most likely should be classified as an employee, and the person certifying the status should contact the Human Resources.

If the answers to all of the above five questions are no, an Independent Contractor relationship may be established. The Purchasing Department reserves the right to request verification of the individual's classification as an Independent Contractor from the Human Resources.

Revenue Ruling 87-41, 1987-1 Cumulative Bulletin 296, lists the twenty factors that have been identified to serve as an aid when determining whether an individual is an Independent Contractor or an employee. The importance of each factor is dependent upon the facts and circumstances of every case.

If the majority of questions 1-14 are answered as "no" and the majority of questions 15-20 are answered as "yes", then the relationship may be that of an Independent Contractor rather than an employer-employee. For additional information and assistance in applying these common law factors, contact the Purchasing Division.

1. Instructions
   Will you instruct the individual (or have the right to instruct) on when, where, and how the work will be done?
   
   An employee must comply with instructions about when, where, and how to work. Even if no instructions are given, the control factor is present if the employer has the right to give instructions.
2. Training
   Will you train or provide training to the individual on performing services in a particular manner?
   
   An employee is trained to perform services in a particular manner. Independent Contractors ordinarily use their own methods and do not receive training from the purchaser of their services.
3. Integration
   Are the services that this individual will be providing a part of the business operations?
   
   An employee's services are integrated into the business operations because the services are important to the success or continuation of the business. This shows that the employee is subject to direction and control.
4. Services rendered personally
   Will the individual be personally performing the services?
   
   An Independent Contractor has the capability of hiring someone to personally perform the work. An employee renders services personally. This shows that the employer is interested in the methods, as well as the results.
5. Hiring, supervising, and paying assistants
   Will you be hiring, supervising, and paying others to assist the individual?
   
   An employee works for an employer who hires, supervises, and pays assistants. An Independent Contractor hires, supervises, and pays assistants under a contract that requires him/her to provide materials and labor, and to be responsible only for the result.
6. Continuing relationship
   Will this be an ongoing relationship?
   
   An employee has a continuing relationship with an employer. A continuing relationship may exist where work is performed at frequently recurring, although irregular, intervals.
7. Set hours of work
   Will you be setting the individual's hours of work?
   
   An employee has set hours of work established by an employer. An Independent Contractor is the master of his/her own time.
8. Full time required Will the individual be working only for you?
   An Independent Contractor is free to work when and for whom he/she chooses.
9. Doing work on employer's premises
   Will the individual work on the premises or at a location you designate?
   
   An employee works at a location or on a route designated by an employer. Generally an Independent Contractor would not be required to work at a location designated by the Contractor, unless required by the nature of the work to be performed.
10. Order or sequence set
    Will you define the order or sequencing of the work?
    
    An employee must generally perform services in the order or sequence set by an employer, which shows that the employee is subject to direction and control.
11. Oral or written reports
    Will the individual be asked or required to submit a report to you describing his/her actions?
    
    An employer may require an employee to submit report. This indicates that the employee must account to the employer for his/her actions. An Independent Contractor may submit a report or demonstrate accurate completion of the work performed by the Contractor.
12. Payment by hour, week, month
    Will you be paying the individual by the hour, week, or month?
    
    An employee is generally paid by the hour, week, or month. An Independent Contractor is generally paid by the job or on a straight commission or a set fee for services performed.
13. Payment of business and/or traveling expenses
    Will you be paying any expenses for the individual?
    
    An employer generally pays an employee’s business and travel expenses. This shows the employee is subject to regulation and control.
14. Furnishing of tools and materials
    Will you be furnishing the individual with tools, materials, equipment, etc?
    
    An employer generally furnishes an employee significant tools, materials, and other equipment.
15. Significant investment
    Will the individual have any investment in the facilities he/she will be using?
    
    An Independent Contractor has a significant investment in the facilities he/she uses in performing services for someone else.
16. Realization of profit or loss
    Will the individual realize a profit or suffer a loss?
    
    An individual who can realize a profit or suffer a loss is generally classified as an Independent Contractor.
17. Working for more than one firm at a time
    Can the individual be working for more than one employer?
    
    Individuals may work for more than one employer and still be classified as an employee; however, an Independent Contractor may provide his/her services to multiple unrelated persons or firms at the same time and generally has a significant client base.
18. Making services available to general public
    Does the individual offer his/her services to the general public?
    
    An Independent Contractor makes his/her services available to the general public.
19. Right to discharge
    Have you given up your right to discharge the individual?
    
    An employee can be fired by an employer. An Independent Contractor cannot be discharged as long as he/she produces a result that meets the specifications of the contract.
20. Right to terminate
    If the individual quits, will he/she incur a liability for work not completed?
    
    An employee can quit his/her job at any time without incurring liability. An Independent Contractor usually agrees to complete a specific job and is responsible for its satisfactory completion, or is legally obligated to make good for failure to complete it.