INDEPENDENT CONTRACTOR

1. Changes to Procedure INDEPENDENT CONTRACTOR

2. Many factors must be considered when designing procedures at Boise State University

3. Independent Contractor or Employee? • IRS default = Employee • University must demonstrate IC • Penalties for misclassification as IC

4. Business Entity Vs. Non Business Entity Contingent on how they file their taxes….Vendor Information form W9 Business Entity Non-Business Entity Individual (file under SSN) Single-member LLC Sole Proprietors Must make determination whether Independent Contractor or Employee IC Classification Checklist • Corporations • Partnerships • Multi-owner LLC • Governmental agencies & trusts • Presumed independent contractors • Unique facts and circumstances • Retain the right to classify any service provider as an employee

5. What is an Independent Contractor? An individual who provides a highly technical or unique service or has a particular set of skills not available elsewhere in the University. Independent contractors typically have a separate workplace, are not supervised by a University employee, and are needed only for a short duration to complete a specific project.

6. How do I know if the service provider qualifies as an Independent Contractor?

7. Recurrence of Assignment Behavioral Control Financial Control Employee status Relationship to BSU employee Services provided Relationship Between Parties Duration of Assignment Characteristics of the ASSIGNMENT and INDIVIDUAL must be considered within the CONTEXT OF THE UNIVERSITY to determine Independent Contractor or Employee status

8. Step 3: Pay Step 1: Approve Step 2: Define IC Classification Checklist(1) Contract for Services(3) Payment Request form(4) Forms Required W9(2) Copy of Contract for Services(5) 1) Must have formal approval of IC classification BEFORE the service start date or be paid as an employee. Replaces the IC Status form. 2) Required for any vendor. Provides data used for IRS compliance. 3) Required for all Independent Contractor assignments regardless of dollar value 4) Revised effective 2/1/2012 to replace the Statement of Services Rendered form. 5) Required with first incremental payment only.

9. IC Classification Checklist Series of YES/NO questions to assess Assignment within context of the University Email form to accounts-payable@boisestate.edu Must have formal approval BEFORE service begin date or REQUIRED to be paid as EMPLOYEE Positions approved by 12/31/2011 will be grandfathered

10. Contract for Services Required for ALL regardless of dollar value (standardized procedure) No reimbursed expenses (all costs should be built into the rate) Standard Signature Authority Requirements (no auto-routing to OSP if paid on grant/contract) Standardized Contract for Services - If not revised & < $10k does NOT need Legal review approval (2 – 3 weeks) Copy with first payment increment ONLY (contract management via Access)

11. Payment Request Form Consolidating: IC Statement of Services Rendered Non-compensatory Payment Request Form Honorarium & Expense Authorization Form Host Family Statement of Services Rendered Form

12. Revisions - SUMMARY Policy Changes Approval BEFORE service start date or default to employee Approval = Individual + assignment + range of dates (a change to any factors requires new approval) Form Changes IC Classification Checklist replaces IC Status form Contract for Services (standardized & revised thus no Legal review if not modified) Consolidation of multiple forms into Payment Request form (Non-compensatory payment request, IC Statement of Services Rendered, Honorarium & Expense Authorization, Host Family Statement of Services Rendered) Procedure Changes W9 (or W8) required for all vendors Contract for Services for ALL IC, regardless of dollar value (standardized) Standard signature authority rules apply (no default OSP) Copy of Contract for Services with first payment increment only (Access) Email IC Classification Checklist Payee sign Payment Request (rather than ICSSR)