University Nevada, Las Vegas
University Nevada, Las Vegas
INDEPENDENT CONTRACTOR
OR
EMPLOYEE?
Presented by: YVETTE WALTON
Assistant Controller
Accounts Payable
X51143
ISP VS. EMPLOYEE
• BEHAVIOR CONTROL
• FINANCIAL CONTROL
• RELATIONSHIP OF PARTIES
• UNLV POLICIES FOR ISP’S
• UNLV’S ISP CONTRACT
University of Nevada Las Vegas
Accounts Payable Department
ISP vs. EMPLOYEE
BEHAVIORAL CONTROL
EXAMPLE:
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)
C)
D)
What tools or equipment to use
What assistants to hire to help with the work
Where to purchase supplies and services
University of Nevada Las Vegas
Accounts Payable Department
ISP vs. EMPLOYEE
BEHAVIORAL CONTROL
EXAMPLE:
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.
University of Nevada Las Vegas
Accounts Payable Department
ISP vs. EMPLOYEE
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
University of Nevada Las Vegas
Accounts Payable Department
ISP vs. EMPLOYEE
RELATIONSHIP OF THE PARTIES:
These are facts that illustrate how
the business and the worker
perceive their relationship.
University of Nevada Las Vegas
Accounts Payable Department
EMPLOYEE TAX REPORTING
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.
University of Nevada Las Vegas
Accounts Payable Department
ISP TAX REPORTING
TAX REPORTING WHEN
A WORKER
CLASSIFICATION IS AN ISP
THE IRS REQUIRES THE UNIVERSITY TO
PROVIDE CLEAR AND CONVINCING EVIDENCES
SUPPORTING A DECISION TO TREAT AN
INDIVIDUAL AS AN INDEPENDENT CONTRACTOR,
USUALLY IN THE
FORM OF THE COMMON-LAW 20 QUESTION TEST
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.
PREPARING UNLV’S ISP CONTRACT
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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.
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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
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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.
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ACCOUNT INFORMATION:
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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.
_________________________________
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___________________________
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Authorized Accounts Signature
Date
Payee Signature
Date
_________________________________
________________________________________
Printed Name of Authorized Signer
Mailing Address (PO
Boxes are not accepted)
_________________________________
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Department
Mail Stop
City
State
Zip
_________________________________
_____________________ ________________
Department Contact
Phone
Number
Fax Number
_____________________________
_____________________
________________________________________
Telephone Number
Fax Number
e-mail address
CONTROLLERS OFFICE REVIEWBy:____________________Date:_________
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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 &
Engineering
30-05 General Operations
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 &
Engineering
45-15
All Architecture &
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.
ISP VS. EMPLOYEE
Questions?
Thank You for your time!
http://Accounts Payable@unlv.edu