The purpose of this policy is to
prescribe guidelines for obtaining the services and compensating an independent
contractor at Bowling Green state university under the conditions established
by the IRS. It is the intent of university to classify individuals as
independent contractors only when there is a reasonable basis for such
classified as independent contractors are not eligible for any employee
benefits, are not covered by worker's compensation, and pay for services is
also not subject to income tax withholding.
are currently employed with Bowling Green state university may not be paid as
an independent contractor.
have been employed with Bowling Green state university may not be paid as an
independent contractor in the same calendar year that they were an employee
holding the same position, with the same duties.
Independent contractor - An individual who performs a
service for the university, but is free from substantial control or direction
in the performance of his or her work under a contract of service. An
independent contractor is always an individual and shall not be a corporation
or other similar legal entity.
Independent contractors usually have a skill or area of
expertise not available within the university, and the need for their services
commonly does not extend beyond a limited period of time in which to complete a
As a general rule, the university has the right to
control or direct only the result of the work done by an independent
contractor, and not the means and methods of accomplishing the
Independent contractors are further defined by the
No instructions. Independent contractors are not
required to follow, nor are they furnished with, instructions to accomplish a
No training. Independent contractors typically do not
receive training by the university. They use their own methods to accomplish
the work, but may have to use a university system to complete their work.
can be hired. Independent contractors are hired to provide a result and may
usually have the right to hire others to do the actual work.
contractor's work is not essential. The university's success or continuation
should not depend on the service of outside independent contractors.
time schedule. Independent contractors set their own work hours and
No permanent relationship. Independent contractors do
not have a continuing relationship with the university. The relationship can be
frequent, but it must be at irregular intervals, on call, or whenever work is
Other jobs. Independent contractors should have enough
time available to pursue other gainful work.
Independent contractors control where they work. If they work on the premises
of the university, it is for convenience and not under the university's
direction or supervision.
Order of work. Independent contractors determine the
order and sequence in which they will perform their work.
No hourly pay.
Independent contractors are paid by the job, not by time. Payment by the job
can include periodic payments based on a percentage of job completed. Payment
can be based on the number of hours needed to do the job times a fixed hourly
rate. Payment method should be determined before the job
Multiple firms. Independent contractors often work for
more than one firm at a time.
expenses. Independent contractors are generally responsible for their own
business expenses, although it is not uncommon for independent contractors to
negotiate to contract for reimbursement for all associated travel
Significant investment. Independent contractors should
be able to perform their services without the university's facilities
(equipment, office furniture, machinery, etc.). The independent contractor's
investment in their trade must be real, essential, and
Services available to the public. Independent
contractors make their services available to the general public by one or more
of the following: having an office and assistants; having business signs;
having a business license; listing their services in a business directory; or
advertising their services.
Profit or loss
possibilities. Independent contractors should be able to make a profit or a
loss. Employees cannot suffer a loss. Five circumstances show that a profit or
loss is possible: the independent contractor hires, directs, and pays
assistants; the independent contractor has his own office, equipment,
materials, or facilities; the independent contractor has continuing and
recurring liabilities; the independent contractor has agreed to perform
specific jobs for prices agreed upon in advance; and the independent
contractor's services affect his own business reputation.
Independent contractors' contractual agreement may be terminated for any reason
by either party upon written notification.
The requesting department representative must initiate the
completion of the independent contractor determination form and will forward
all documentation to human resources for approval.
department representative is responsible for obtaining any supporting
documentation, and attaching it to the independent contractor determination
An independent contractor working arrangement will not
be commenced or entered into, without approval from human resources and the
appropriate vice president.
The independent contractor will furnish the university with
all applicable contract information.
department will have a contractual agreement that will be drawn by the
university that will outline the expectations of the university for the
assignment that the independent contractor will undertake.
the requesting department will secure a confidentiality agreement, signed by
the independent contractor provided by the university.
contractor may not subcontract work without BGSU written
Human resources and university counsel.
in consultation with university counsel, will approve or deny requested
independent contractor employment agreements. No approval will be processed
without the approval of the president or the appropriate vice
The purchasing department will be contacted when an
independent contractor employment arrangement has been
be notified by human resources should an independent contractor relationship be
The requesting department shall work with purchasing to
ensure all documentation (vendor data form) is completed.
independent contractor has been approved by purchasing as a vendor they will
notify accounts payable of the approval.
determine if the payment to the independent contractor will exceed allowable
limits and thus require a department to go through the request for proposal
Date: November 1st, 2013
Ohio Admin. Code