An independent contractor is an individual or firm providing services free from direction and control of performance including the means and methods used.Independent contractors fall into two categories:
Otherwise self-employed individuals or those employed by other organizations who do part-time work not connected with their other employment are usually considered employees of the Research Foundation.When engaging personnel services for work on a project, it is the responsibility of the Principal Investigator/Project Director to make an initial determination as to whether to classify an individual as an employee or an independent contractor.The IRS has issued general guidelines rather than more specific regulations on the employee/independent contractor distinction. Therefore, each request for an ICA must be evaluated very carefully. The legal staff looks for a preponderance of factors towards one classification or another. There is no single criterion which determines classification one way or another. Please be aware, however, that when the proposed consultant is an individual with a social security number (for tax identification purposes), the IRS presumes the person is an employee and this presumption is a heavy burden to overcome. Extra caution will be taken before issuing an ICA to individuals not ordinarily in the business of consulting or to past or present CUNY employees; you may be asked to provide further information.IRS guidelines are based on common-law rules, rather than statute, and are thus open to interpretation. The general rule is that if an individual is subject to the control or direction of another merely as to the result to be accomplished by the work and not as to the means and methods for accomplishing the results, s/he is an independent contractor, rather than an employee.
General Factors in Determining the Status of a Service Provider:The Research Foundation's Office of Legal Affairs uses the criteria below in trying to decide whether an individual is an independent contractor or an employee,Does Scope of Work Pass the Control Test?Most of the IRS's criteria for determining the status of a service provider hinge on the idea of the amount of control an employer may exercise over the individual. Please keep in mind that for the IRS, it doesn't matter whether or not this control is actually exercised, just that a relationship of control exists. In each case, it is very important to consider all the facts - no single fact provides the answer.THE 20-FACTOR TESTThe IRS developed the 20-Factor test to determine if a business controls and directs a worker, or has a right to do so. The factors (questions), applied to each individual circumstance under which services are to be performed, determine the individual's classification. The questions must be objectively and consistently applied in order to determine the individual's correct status. If the predominance of answers to the 20 questions is "yes", the individual is most likely an employee. If the predominance of answers is "no", the individual is most likely an independent contractor.
The 20 questions are as follows:
Additional Factors in Determining the Status of a Service Provider:
List of Clients and Years Consulting
Prior ICAs through the RF
Rate/Amount of Pay/Timeframe of Performance
Previous or Current CUNY Employment
The Legal Department will also consider any other facts which may indicate the individual is in the general business of consulting.The Internal Revenue Service has issued the following publications which provide additional information on independent contractor status.
Final decisions regarding these classifications are the responsibility of the RF's Office of Legal Affairs.If the RF is found to have misclassified an individual, potential liabilities include:
Call Legal Affairs at (212) 417-8361 with any questions you may have regarding the classification of an independent contractor.Disclaimer: All information provided on this web site and the attached pages is intended for educational use only and should not be regarded or taken as legal advice that would be provided by an attorney to a client.
GRANTS OFFICE STAFF