From time-to-time, or on a continuing basis, a Project Director may need to pay an individual to perfom work for their program or project. The type of work the individual performs, the amount of direct supervision he/she receives, where the work is performed, and other factors will determine the method and the timetable for payment. UCorp follows IRS and California State regulations when making the determination.
All work performed by an individual, whether an employee or an independent contractor, must be approved by UCorp- in writing- prior to commencement of work.
UCorp uses four (4) different models for compensating an individual: employee payment, independent contractor payment, one-time payment, or honoraria payment. To determine the appropriate model, you will need to know:
- if the person is already employed by either UCorp or SF State,
- if this person is going to perform a particular service for an ongoing period of time,
- if payment is to be made based on deliverables, and
- if this is a one-time only payment.
Individuals Already Employed by UCorp or SF State
If the individual is already employed by UCorp or SF State, then they must be paid as an employee. There are no exceptions to this policy. Please go view the UCorp Human Resources section for more information and links to the appropriate forms.
Individuals Not Already Employed by UCorp or SF State
If the individual is not already employed by UCorp or SF State, use the criteria below to determine how best to compensate them, i.e., as an employee, independent contractor, with a one-time payment, or with an honorarium.
Compensation Based on Time
If the individual has specific hours of work, requires direct supervision, or utilizes SF State or UCorp resources (such as a computer, phone, e-mail account, desk, or other supplies), then the individual is an employee and must be compensated through payroll.
Compensation Based on Deliverables
In most cases, an Independent Contractor Agreement should be put into place when individual's work will be compensated based on deliverables rather than time alone; and the work will be performed without utilizing campus resources. The following common law principles, as applied by the IRS, must be met for an individual to be properly classified as an independent contractor:
- The individual is not given, nor required to follow, instructions to complete their tasks/work.
- You have not provided training to the individual to perform the tasks.
- Individual is allowed to hire others to do the work.
- Individual establishes his/her own work hours.
- The work to be performed is not essential to your project/program.
- The individual does not have a continuing relationship with your project/program.
- The individual may hire, supervise and pay assistants, independent of you.
- The individual has enough time available to pursue other gainful work.
- The individual will decide when and where the work will be performed.
- The individual will determine the order and sequence that s/he does the work.
- The individual is not required to submit interim reports to you.
- The individual is to be paid for the job, not the time doing the job.
- The individual works for more than one entity/organization at a time.
- The individual will pay for his/her expenses involved in completing the work.
- The individual will supply his/her own tools and supplies.
- The individual can perform his/her services without your project’s/program’s facilities.
- The individual can prove that the services provided are made available to the general public.
- The individual is liable for any expenses, liabilities, and/or losses s/he may encounter in doing the work.
- The individual cannot be fired at will, so long as the result specified in the contract is produced.
- The individual cannot be paid for partial completion of a job, and may be liable to compensate the project/program for failure to complete.
If statements 1 – 20 are true, the individual may be properly paid as an independent contractor. If any of the statements are false, it is likely that the individual should be paid as an employee of UCorp. This can be done on a short-term or long-term basis, contingent on the availability of funds and approval from UCorp.
Contact Kathleen Bruno at firstname.lastname@example.org or (415) 338-7920 for more information.
Short-Term Service Requests
Short-Term Service Requests are made for work performed over a period of up to 40 hours and span over the course of 5 days or less, and involve no significant deliverables. Examples of proper use of a short-term payment would be for a performer, caterer, or pamphlet distributor.
Complete a Short-Term Service Agreement, back it up with a resume, curriculum vitae, or bio and forward it to UCorp for payment. New vendors will also need to competed at W-9 form.
Honoraria are issued when there is no set fee. This is most commonly used for visiting scholars.
Complete an Honorarium Request, back it up with a resume, curriculum vitae, or bio, and forward it to UCorp for payment. New vendors will also need to complete a W-9 form.