- OU Administrative Policies and Procedures
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- 262 Tax Classifications - Independent Contractor vs. Employee
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262 Tax Classifications - Independent Contractor vs. Employee
SUBJECT: | TAX CLASSIFICATION: INDEPENDENT CONTRACTOR VERSUS EMPLOYEE |
NUMBER: | 262 |
AUTHORIZING BODY: | VICE PRESIDENT FOR FINANCE AND ADMINISTRATION |
RESPONSIBLE OFFICE: | CONTROLLER’S OFFICE |
DATE ISSUED: | JUNE 1986 |
LAST UPDATE: | APRIL 2017 |
RATIONALE: The policy and supporting procedures provide guidelines to properly classify persons providing services to the University as either an Employee or as an Independent Contractor. | |
POLICY: The University classifies persons providing services to the University as either Employees or Independent Contractors by properly applying IRS guidelines. | |
SCOPE AND APPLICABILITY: All University Departments must initiate the process to properly classify persons providing services to the Department. | |
DEFINITIONS: PROCEDURES: | |
Generally, an Employer-Employee relationship exists when the University engages a person intending that the person will have a continuous, permanent relationship with the University, whether full-time or part-time, such as a faculty or administrative staff member, but who has the right to quit their job without incurring any liability to the University. Generally, an Independent Contractor relationship exists when the University hires a person by a separate written contract for a temporary assignment, even if the assignment lasts for several years (e.g., external auditor, lobbyist or consultant). Example 1: The University hires a computer trainer to perform training services for the University. The person only works for the University; the University pays for the person’s training and any certifications they may need; the University tells the person exactly how it wants its trainings performed and how they are to be evaluated ; the person must work regular business hours; the person is paid a salary and may receive University paid fringe benefits; can be reimbursed for business expenses according to the University’s Administrative Policies; the University provides the person with a computer and any materials the person needs to perform their job; and, the person can quit their job and leave the University whenever they want without any liability. This person is an Employee. | |
RELATED POLICIES AND FORMS: | |