The Employment Service
Agreement (ESA)
The purpose of this presentation is to provide
information for most frequently asked questions or
issues regarding the ESA process.
Please visit the ESA web page for complete
information/advise regarding the ESA.
The ESA can be found
on the ESA Web Site;
the links are below.
ESA Web Site
PDF Version of the ESA
Word Version of the ESA
Path for ESA Web Page
http://www.losrios.edu/hr/ESA%20Page/ESAs_Sep2010/HomePage.html
1) Go to: www.losrios.edu
2) Click on: Employees
3) Click on: All other links are only available from a Los Rios Computer –
click here to enter.
4)Click on: Human Resources
5) The above path goes to the Human Resources “Internal” (employee
only) home page.
Scroll down until you see “General Information” in the column on the left
side. The fourth bullet is: “Employment Service Agreement (PDF form,
instructions & Q&A” This is the link that goes to the ESA home page.
Note: Once in the ESA home page, the easiest way to find information is
to scroll down until you see “Supplemental Information (i.e., Table of
Contents)”, and then click on the Table of Contents (TOC). The TOC
includes all links and information available on the ESA web pages, in
alphabetical order. Additional information will be added to the
“Supplemental Information” section of this page.
How to determine if an ESA is the
appropriate way to pay
 The “ESA Decision Tree” page includes different decision
tree’s/charts that should help you decide if an ESA is the correct
way to pay an individual.
 Additional information is available on the ESA Eligibility web
page.
 The GS79 form (“Independent Contractor vs. Employee
Checklist”) is also available for your use.
Types of ESAs
(after it has been determined that the employee should be
paid off of an ESA, the type of ESA needs to be determined.)
There are three types of ESAs
 Instructional (which means subject to the California State
Teachers’ Retirement System (CalSTRS).
 Non-Instructional/Classified (which means not subject to
CalSTRS)
 Non-Instructional/Professional Expert (which means not subject
to CalSTRS but requires minimum qualifications, to be
determined by the hiring supervisor)
Type of ESA to Use
When determining what type of ESA to use (Instructional, NonInstructional/Classified or Non-Instructional/Professional Expert),
the deciding factor is based upon the work being performed.
Instructional ESAs
An Instructional ESA means that the work being performed on the
ESA is creditable towards the California State Teachers’ Retirement
System (CalSTRS).
An Additional resource:
(Guidance to for making CalSTRS Determination)
An ESA is considered “Creditable towards CalSTRS”; however, that
does not mean that employee contributions towards CalSTRS will be
withheld. Contributions towards a retirement system depends upon
which retirement system the employee belongs to.
A majority of Instructional ESAs are also subject to the 67% law (for
part-time employees) and the 60% rule for (full-time faculty
members). Here is a sample list of Instructional ESAs not subject to
the 67% law.
Instructional ESAs
 The FTE should be calculated for all Instructional ESAs.
 To calculate the FTE, take the total number of hours, for each
semester, and divide by 652.50 (example: an Instructional ESA
with 100 hours for spring would equal an FTE of .153 (100 /
652.50).
 The 652.50 calculation is based upon the full-time work
schedule for non-instructional faculty. Counselors, Coordinators
and Nurses work 174 days per year, 7.50 hours per day (174 x
7.50 = 1,305/2 semesters = 652.50)
Instructional ESAs
ESAs that are paid as a “lump sum” payment, need to be broken down
to hours before calculating the FTE.
Because the FTE calculation is based upon the non-instructional work
week, the hourly rate is based upon the non-instructional adjunct
salary schedule (B-2); Class 1, Step 1, which for 2010-2011 is $32.17
per hour.
To calculate hourly rate, take the lump sum payment (ex: $1,500) and
divide by the Class 1, Step 1 hourly rate from the B-2 Salary Schedule
(ex: $32.17) and the lump sum payment will break down to 46.627
hours ($1,500 divided by $32.17 = 46.627 hours).
To calculate FTE, take the number of hours (46.627 hours) and divide
by the FTE calculation (652.50) which equals an FTE of .071 (46.627
divided by 652.50 = .071 FTE)
Instructional ESAs
For your use, an FTE calculator is available on the ESA web page.
To check an employees eligible FTE, you may want to look at the
“Term Workload Panel” in PeopleSoft. The Human Resources
Specialist will input the FTE for ESAs subject to the FTE limitation into
the Term Workload Panel. The FTE will appear in PeopleSoft only
after data entry is completed by the HR Specialist.
To calculate how much FTE an employee has available to work,
multiply the employees’ available FTE by 652.50.
Example: A FT Faculty Member has a maximum FTE of 1.600 and
the Term Workload Panel indicates that his/her FTE is at 1.333.
Subtract 1.600 FTE by 1.333 FTE = .267 available FTE. Then,
multiply .267 FTE by 652.50, which equals 174.217 more hours
available for this employee.
Instructional ESAs
Additional Notes/Tips:
Instructional ESAs count towards the FTE limitation, but the FTE does
not count towards other benefits (i.e., sick leave, medical/dental benefit
premiums, step increases or retro-active salary payments. Nor can the
work be banked towards a Type-C leave).
Instructional ESAs must have an account code that starts with “1”.
Instructional ESAs must have a “Certificated” position number.
The Instructional determination is based upon the work being
performed. The position number, account code or the answer to
question #1 in the “gray box” must reflect Instructional work accurately
(not what an employee may “want”).
Non-Instructional ESAs
A non-instructional ESA means that the work being performed is NOT
creditable towards CalSTRS.
There are two types of non-instructional ESAs, “Professional Expert” and
“Classified”.
The main difference between the two is that the Professional Expert ESA
requires Minimum Qualifications.
Both of the non-instructional ESAs must use a 2305 account code.
The “Classified” ESA must have a “Classified” position number and the
“Professional Expert” ESA must have the correct Professional Expert
position number.
Fiscal Services (568-3066) can help with position numbers and/or
account/budget codes.
Professional Expert ESAs
A Professional Expert ESA is for work that is considered noninstructional but still requires minimum qualifications.
Minimum Qualifications for Professional Expert ESAs are
determined at the campus level.
An ESA cannot be considered a Professional Expert for the sole
purpose of allowing a CalSTRS retiree to work. The decision must
be based upon the work being performed and must be consistent
with all other employees providing the same or similar services.
Each campus has a “Misc.” Professional Expert position number.
Professional Expert ESAs must use the correct Professional Expert
number.
The ESA Hiring Process
Each new employee requires a fingerprint packet. The employee can
start working as soon as HR has received the completed live-scan
form indicating that the fingerprint process has been completed. You
will not be notified when the clearance is received.
The Employee should complete all forms on the ESA “Forms” web
page.
Please be sure to sign all appropriate sections included on the new
hire forms.
The employee needs to submit a copy of his/her Social Security card.
Even if the I-9 form is completed with other documentation, it is
District practice to also obtain a copy of the SS card for IRS purposes.
If the employee does not already have a PeopleSoft ID, please be
sure to include the Social Security Number on the ESA.
The ESA Hiring Process
A Tuberculosis (TB) test is due within 15 days of the date of hire.
The TB test must be less than 60 days old unless it is from another
school district.
If an employee tests positive to the TB skin test, chest x-ray information
from the employee’s physician AND proof that the chest x-ray was
performed due to testing positive to the TB skin test (i.e., the original TB
test taken indicating a positive reaction, the letter from the physician can
state that the employee tests positive to the skin test or the employee
can complete the Positive TB Certification form.)
Please be sure that all paperwork, including the ESA, are received in
HR prior to the employee starting.
Beginning and Ending Dates
The beginning date on the ESA should be the first day of service, and
the ending date should be the last day of service.
Exception
For LRCFT stipends, it is okay to use the beginning and ending date
of the semester that the employee is working.
The beginning and ending dates should be in alignment with the dates
of service, the payment date and also the number of hours, by
semester, located in the “Specific Terms of Compensation” section.
Example 1:
If the person is a new employee, and his/her first day of work is
March 1, 2011, that date should also be the “Beginning Date” on the
ESA. If the employee is working through May 20, 2011, then May
20, 2011 should be the ending date. In the “Specific Terms of
Compensation “ section, all hours should be in the “Spring” field
Beginning and Ending Dates
Example 2:
If an employee is working during the Spring 2011 semester, the ESA
might have January 13, 2011, for the beginning date and May 18, 2011,
for the ending date.
If you want the employee to receive 2 payments at $150 each, then in
the “Specific Terms of Compensation” section indicate that the
employee should receive $150 in the “Rate per Hour/Day” field and “2”
in the “Spring” field. Include in the “Description of Services to be
Rendered” field the specific dates of the course. This will allow HR to
only have the ESA “active” for the specific dates of the courses and not
for the entire semester.
In this example, the beginning date on the ESA should be the first class
and the ending date should be the second class.
Beginning and Ending Dates
Example 3:
If the ESA has a beginning date of July 1, 2010 and an ending date of
June 30, 2011, the “Specific Terms of Compensation” section must hav
hours listed in the “Fall”, “Spring” and “Summer” fields.
Example 4:
If the ESA has a beginning date of August 25, 2010, and an ending
date of February 15, 2011, then the “Specific Terms of Compensation”
section must have hours listed in the “Fall” and “Spring” fields.
Description of Services to be
Rendered
“Description of Services to be Rendered” field. Include the phrases:
“For-Credit” or “Not-for-Credit” in this field when describing the
services to be rendered. When applicable, please include the specific
date(s) that the employee is to be paid.
If you include the date(s) to be paid, please be sure to use either
1. The pay period month; or,
2. The date of the pay check.
Example: if an employee is to be paid on June 10th, the ESA could say:
“Pay on the May Payroll” or “Pay on June 10th”.
The beginning and end dates on the ESA should always reflect the dates
that the employee worked, even if timesheets are submitted late.
Please see directions on revising the ESA for futher clarification.
Completing the “Gray” Section
Review the Sample ESAs for help in completing the “Gray” box on the
ESA.
Please remember that the questions in the “Gray” box also have to
match the position number and the account code. For example, an
Instructional ESA must have an Account Code that starts with “1” and
must also have an Instructional Position Number. The “Classified” ESA
and the “Professional Expert” ESA must both have a 2305 Account
Code and the appropriate position number.
Please ask the employee to answer the retirement questions in the
“Gray” box. This will help Human Resources to withhold the appropriate
taxes and/or retirement contributions. If you are unable to have the
employee complete this part of the ESA, you could, if you wish, ask the
employee to complete the “Retirement Plan Participation Information”
form. If you chose to have the employee complete the form instead,
please leave that portion of the ESA blank and attach the completed
form.
Position Number/Budget String
 Please make sure that “Instructional” ESAs have an
Instructional position number; “Classified” ESAs should have a
Classified position number; and, “Professional Expert” ESAs
should have the appropriate “Professional Expert” position
number.
 The Account Code should start with “1” for Instructional ESAs
and should be 2305 for Non-Instructional ESAs.
Position Number/Budget String
 Both the position number and the entire budget string should be
written/typed on the ESA.
 The ESA has enough room for two budget strings. You may use
an attachment if you have more than two budgets; please have
the authorized signer sign/approve the ESA AND the
attachment.
Position Number and Budget String
 If the budget string is new, please do not submit the ESA until
the budget string has been set-up AND established for HR/PR
use.
 If you are contacted by HR because of an issue/problem with a
budget string on a contract, please let the specialist know when
the problem has been fixed.
 “Due-From” accounts (9xxxx) can be used on any of the three
types of ESAs.
 The “Distribution Amount” field on the ESA should equal the total
amount of money being charged to the budget AND should also
equal the “total cost” of the ESA. For example, if an ESA
employee is being paid 50 hours at $25 per hour, the total cost
of the ESA is $1,250 (50 x $25). If two budgets are being used,
at 50% each, the “Distribution Amount” on the first budget line
should be $625 ($1,250 x.50) and the second budget line should
also be $625.
Specific Terms of Compensation
 Please check the appropriate box (payment is in: Hours, Days
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or a Lump Sum Payment).
Write the amount to be paid per hour/day or total lump sum
amount in the “Rate per hour/day” field.
Fill in the total number of hours/days or payments in the
appropriate semester fields.
The “Total Cost” should equal the total number of payments
multiplied by the hourly/daily rate.
If employee is being paid more than one rate, when all of the
“total cost” fields are added together, the amount should equal
the total of all “Distribution Amount” fields.
Click here for sample ESA
Required Forms
 All ESA forms are available on-line (on the “forms” page
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included in the ESA web site pages)
For new employees, please check off the required forms on the
ESA; or,
For continuing employees, check “All Appropriate Paperwork on
File”.
There are two forms, the SSA-1945 and the Compliance
Checklist, that need to be completed one time only for all
continuing employees. Preferably these froms are submitted
with the first ESA issued to the continuing employee.
If you are unsure if an employee has completed completed
these 2 forms, you may call or e-mail Stacy Robinson at (916)
568-3179 for a list of employees at your campus who have
these forms on file with Human Resources.
Signatures
 If the employee is not available, the hiring manager can write
“Unavailable to Sign” in the space provided for the employees’
signature.
 Please ensure that the employee receives a copy of the front
AND the back of the ESA.
 The Administrator Approving the Agreement must be an
Authorized Signer.
 The “Administrator Initiating Agreement” is typically the hiring
manager/dean.
Additional Information
 Employees who are CalPERS retirees are limited to 960 hours
of work per fiscal year for each non-instructional ESA. It is up to
the employee to ensure that he/she does not exceed this limit.
 CalSTRS retirees have an annual earnings limitation. This
amount changes each calendar year. It is up to the employee to
ensure that he/she does not exceed the earnings limitation. All
wages earned are reported to CalSTRS.
 Retirees of CalSTRS must have their physician complete a
“Freedom from Disabling Disease” form prior to the start of
employment (per Education Code 87408.5). This form only
needs to be submitted once, prior to the start of employment.
 If a current employee retires from STRS but continues working
for the District, with or without a break-in-service, a completed
“Freedom from Disabling Disease” form must be received before
he/she works as a CalSTRS retiree.
Additional Information
 Please adhere to payroll deadline dates. All items must be
received in Human Resources on or before the “Variable Data
Due to HR” date. However, please go through the ESA campus
contact person. Often times, our colleague at the campus, who
handles ESAs, has to process the ESAs before forwarding them
to HR. Therefore, he/she most likely requests that all ESAs be
submitted earlier than the final deadline date.
 Please do not fax or scan/e-mail ESAs. This can lead to
duplicate ESAs being received, and duplicate entries into
PeopleSoft. Duplicate entries can cause double payments.
Please allow enough time for all documents to be received
before the deadline date so that faxes and/or e-mailed
documents will not be necessary.
Additional Information
 The “soft” copies/versions of the ESA form (available in PDF or
Microsoft Word) require that an ESA number be established.
The ESA number that you chose must have five digits or less.
When the ESA appears on the Payroll Worksheets, an “E” at the
end of the ESA number means that the ESA is exempt from the
67% law.
 The “hard” copy/version of the ESA is printed on five-part NCR
paper. Please submit both the HR copy and the Payroll copy to
Human Resources. Human Resources will give the Payroll
Department their copy after the ESA has been processed.
 When using the “soft” copy/version of the ESA, please submit
ONE WHITE copy to Human Resources. Please do not send a
copy to the Payroll Department. Human Resources will give the
Payroll Department a copy after the ESA has been processed.
Additional Information
 The “recommended” hourly rate for ESAs is Class 1, Step 1
from the B-2 salary schedule which is $32.17 for the 2010-2011
academic year.
 If it has been decided that the employee will be paid the same
hourly rate as his/her adjunct/overload duties, you may send an
e-mail to the appropriate Human Resources Specialist
requesting the hourly rate.
 Please contact the Fiscal Services Supervisor of Grants and
Contracts if you have questions regarding Benefit Rates.
The End
Please feel free to call or e-mail Stacy Robinson
at (916) 568-3179 if you have any questions.
Thank you for your time and please feel free to
let us know if you have any ideas or
suggestions for this presentation.