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An independent contractor is a person who is contracted to perform services without having the legal status of an employee. Requests for these services using sponsored Research Foundation (RF) funds are submitted through the ShopBlue e-Procurement System.
The procedures on this page apply to independent contractors paid with sponsored RF funds only. A different process is followed when using non-sponsored RF funds. Learn about the independent contractor procedure for non-sponsored RF funds.
Independent Contractors (IC) are generally individuals who follow an independent trade, business or profession in which they offer their services to the public and complete such services free of control or direction from the payer as to the means and methods used to complete the task. Under the Internal Revenue Service (IRS) general rules, an individual is an IC if you, the payer, have the right to control the results of the work, not the means and methods.
The IRS uses the 20 Factors of the Common Law Test to determine whether an individual is an employee or an IC. These 20 factors or 20 questions assist in determining if a relationship or evidence of control/right to control (behavioral and financial) exists between the payer and worker.
Under IRS rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done, even if freedom of action is granted to the individual worker.
A worker may always be classified as an employee even if the worker meets the criteria of an IC.
Regular purchasing procedures apply if UB is paying a company, or an employee of a company.
It is illegal to knowingly classify an employee as an independent contractor in order to avoid Affirmative Action recruitment efforts, and or payment of employment taxes, fringe benefits, etc. The IRS imposes fines and penalties for misclassification of service.
The Internal Revenue Service considers a worker to be an independent contractor (IC) if he or she:
Effective August 15, 2022, independent contractors paid with sponsored RF funds will be processed by Purchasing and Contract Services. Prior approval for the independent contractor will be needed in the form of a Purchase Order (PO) using the procedure in this section.
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When in doubt, find out! Consult with our purchasing agents for advice.
All procurement activity is subject to periodic audit to monitor compliance with policies and procedures.