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INDEPENDENT CONTRACTOR OR
EMPLOYEE?
University Nevada, Las Vegas
Presented by: YVETTE WALTONAssistant Controller Accounts PayableX51143
University Nevada, Las Vegas
ISP VS. EMPLOYEE
• BEHAVIOR CONTROL
• FINANCIAL CONTROL
• RELATIONSHIP OF PARTIES
• UNLV POLICIES FOR ISP’S
• UNLV’S ISP CONTRACT
BEHAVIORAL CONTROLEXAMPLE:
INSTRUCTIONS – if you give extensive instructions on how work is to be done, this suggests that the worker is to be classified as an employee. Instructions can cover a wide range of topics, for example:
A) How, When or Where to do the work
B) What tools or equipment to use
C) What assistants to hire to help with the work D) Where to purchase supplies and services
ISP vs. EMPLOYEE
Accounts Payable DepartmentUniversity of Nevada Las Vegas
BEHAVIORAL CONTROLEXAMPLE:
INSTRUCTIONS – If less extensive instructions about what should be done, but not how it should be done, may indicate classification as an ISP. For instance, instructions about time and place may be less important than directions on how the work is performed.
TRAINING – If training is provided about required procedures and methods, this indicates that the work is to be done a certain way, and suggests the classification may be an EMPLOYEE.
ISP vs. EMPLOYEE
Accounts Payable DepartmentUniversity of Nevada Las Vegas
FINANCIAL CONTROL
The following facts show whether there is a right to direct or control the business part of the work.
– SIGNIFICANT INVESTMENT – EXPENSES– OPPORTUNITY FOR PROFIT OR LOSS
ISP vs. EMPLOYEE
Accounts Payable DepartmentUniversity of Nevada Las Vegas
RELATIONSHIP OF THE PARTIES:
These are facts that illustrate how the business and the worker
perceive their relationship.
ISP vs. EMPLOYEE
Accounts Payable DepartmentUniversity of Nevada Las Vegas
TAX REPORTING WHEN A
WORKER IS AN EMPLOYEE:
ALL PROSPECTIVE ISP INDIVISUALS STATUS WILL BE VERIFIED THAT NO CURRENT OR PREVIOUS EMPLOYMENT RELATIONSHIP EXIST. A/P WILL ALSO VERIFY WITH THE IRS USING THE 1099 MATCHING TOOL TO MAKE SURE TIN’S AND SS# MATCH THEIR RECORDS.
EMPLOYEE TAX REPORTING
Accounts Payable DepartmentUniversity of Nevada Las Vegas
TAX REPORTING WHEN A WORKER CLASSIFICATION IS AN ISP
THE IRS REQUIRES THE UNIVERSITY TOPROVIDE CLEAR AND CONVINCING EVIDENCES SUPPORTING A DECISION TO TREAT AN INDIVIDUAL AS AN INDEPENDENT CONTRACTOR, USUALLY IN THEFORM OF THE COMMON-LAW 20 QUESTION TEST
ISP TAX REPORTING
Accounts Payable DepartmentUniversity of Nevada Las Vegas
20 QUESTIONS
• Evaluation for Determining Independent Contractor Status
• Hiring departments are responsible for providing information to properly classify individuals as employees or independent contractors. The following questions are intended to measure the extent of control which the University/NSHE may exercise over the worker. Generally, if there is a good deal of control over what the worker does and how the worker does the work, there should be an employee relationship established (EDOC). If there are few elements of control, an independent contractor relationship may be appropriate.
• INDEPENDENT SERVICE PROVIDER CONTRACT (ISP)
• INSTRUCTIONS FOR USE:• The purpose of this form is to be used for contracts with
individuals engaged in technical, professional or specialized skills such as guest speakers, athletic officials, consultants, performers and to request honorarium payments to individuals who:
• Provide one-time nonrecurring services.• Are to be paid $10,000.00 or less including ZERO fees
to be paid (no receipts required, all payments reportable as taxable income); and
• Who are not otherwise employed by the Nevada System of Higher Education (which includes CCSN, DRI, and GBC, TMCC, UNLV, UNR, WNCC, or NSHE System Administration.
PREPARING UNLV’S ISP CONTRACT
• Vendor #
• INDEPENDENT SERVICE PROVIDER CONTRACT (ISP)
• Payee Information • All information is required (including answering questions A-C below):• Service Provider Payment Information:• FULL NAME ______________________________ _____ ______________________________________• Last Name (Please Print or Type) MI
First Name• U.S. TIN/Social Security Number ____________________________________________________• Payee must complete Form W-9 (if a U.S. Citizen) or W-8BEN
(if International)• Engagement Date(s) _________________________ to ______________________________• MM/DD/YY MM/DD/YY• Total Payment Amount $ ___________________________________________ Check Due Date___________• (Not to exceed $10,000 use ICA if above this amount)
(Not before end date)• Mailing Address (number)____________________________________________________________________• (PO Boxes are not accepted)•• City_______________________________State__________________________Zip___________________• Is the payee a current or former (within the current calendar year) employee of any institution of the Nevada System of
Higher Education?• If the answer to question A is yes, do not proceed with this form. Process the payment on an employment document.
Yes No •• B) Is the payee a member of the same household as a NSHE employee?• If the answer to question B is yes, do not proceed with this form. Under the Board of Regents “Conflict of Interest” policy
(B/R Handbook, Title 4, Chapter 10), payment is not allowed.•• Yes No •
• Is the payee a U.S. citizen or lawful permanent resident (green card holder)?• If the answer to question C is no, contact the NRA tax specialist at 51243. “See information regarding U.S. tax information
for Nonresident Alien Consultants and Guest Speakers.•
Yes No •
• ACCOUNT INFORMATION:
• FUND AGCY ORGN OBJT SOBJ AMOUNT TOTAL • Disposition of check if not to be mailed to the payee’s address:Call for pickup:Notes: • The Nevada System of Higher Education is an equal opportunity/affirmative action employer and does not
discriminate on the basis of race, color, religion, sex, age, creed, national origin, veteran status, or physical or mental disability in any program or activity it operates. The NSHE employs only United States citizens and individuals lawfully authorized to work in the U.S.
• Payee must complete and attached Form W-9 (if a U.S. citizen/resident) or W-8BEN (if international)• PAYMENT AUTHORIZATION: Based on the above, AGREEMENT: I have read and
agree to the • It is my determination that the payee meets above
representations and assert that they are• the guidelines for one-time, nonrecurring payment. true and correct.• _________________________________ __________ ___________________________
________• Authorized Accounts Signature Date Payee Signature
Date• _________________________________
________________________________________• Printed Name of Authorized Signer Mailing Address
(PO Boxes are not accepted)• _________________________________ __________
________________________________________• Department Mail Stop City
State Zip• _________________________________
_____________________ ________________• Department Contact Phone
Number Fax Number• _____________________________ _____________________
________________________________________• Telephone Number Fax Number e-mail address• CONTROLLERS OFFICE REVIEWBy:____________________Date:_________
CODING THE EXPENSE
Effective July 1, 2008 new Sub-object codes for consulting, legal, lobbying and architecture & engineering expenditures are to be used.
Coding the Expense
For University Departments Use:Consulting 30-08 General Operations
61-08 Other Fixed Assets
Legal 30-40 General Operations
61-07 Other Fixed Assets
Architecture & 30-05 General Operations
Engineering 61-05 Other Fixed Assets
Lobbying 30-06 General Operations
Coding the Expense
For University Departments Use cont.
For all others use:
Independent Contractor Fees
30-21
Reimburse Independent Expenses
30-22
Coding the Expense
For Grants & Contracts Use:
Consulting 45-18 Grants & Contracts
Legal 45-12 All Legal Fees
Architecture & 45-15 All Architecture &Engineering Engineering Expenses
• Contract Exhibits A, B and C. ISP #
________________ • Exhibit A. Explain in detail what the contractor
will do specifically what will be done by the contractor, where the work will be accomplished, and when the work will be completed).
• Exhibit B. Indicate the total amount of payment and the date when the payment will be made. The date the payment will be made should be the ending date of this contract.
• Exhibit C. List any special conditions that apply.
When your ISP is a Non-Resident Alien
The use of a nonresident alien as an independent contractor can be a lengthy and difficult process. Many additional forms and increased scrutiny are necessary when bringing a nonresident alien onto campus. Prior to initiating any of the paperwork discussed in this session, please contact Debbie Honrath at (702) 895-1243 the Non-Resident Alien Tax Specialist for assistance with foreign visitors.
