Classification - Independent Contractor vs. Employee:

With certain limited statuatory exceptions, the classification of a worker as an employee or independent contractor turns on the application of the so-called "common law" rules. These rules focus on the degree of control the employer exercises (or has a right to exercise) over the worker and the degree of independence of the worker. The employment tax regulations describe this rule as follows:

Generally a relationship of employer and employee exists when the person for whom the services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. That is, an employee is subject to the will and control of the employer not only as to what shall be done but how it shall be done.

In general, 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 result, he is an independent contractor.

Independent Contractors:

Individuals performing a personal service with the relationship being that of an independent contractor (as defined by IRS regulations). Such individuals would not be under the direct or specific control of an immediate University supervisor, but would be required to perform a task in a manner they would generally choose. They would be required to sign a University Independent Contractor contract.

Printable contract: MS Word document or pdf format*

*pdf format requires Adbobe Reader to view and print. To download a free Reader, click here.

Current University employees cannot receive independent contractor or Honorarium payments from the University, Research Foundation, or the Binghamton Foundation for work performed for the local campus. Such payments are required to be paid from their appropriate employer's payroll process.

For Honoraria (non-Binghamton University employees), instructions in Management Procedure #201 should be followed.

Where independent contractor or Honoraria payments are to be made, the individual's Social Security number and home address must appear on the voucher. If the individual's compensation exceeds $600 in a calendar year, an Internal Revenue Service Form 1099 will be mailed to the individual, and reported to the Internal Revenue Service, at the conclusion of the calendar year.

Any questions relative to these procedures should be addressed to the Associate Vice President for Administration.

Related policies:

Binghamton University Purchasing/Independent Contractor:
http://purchasing.binghamton.edu/new/contractor.htm

Office of State Comptroller (OSC) - Procurement and Disbursement Guidelines, Bulletin G-132, May 31, 2006 - Federal Reporting:
http://osc.state.ny.us/agencies/gbull/g-132.htm

Office of the State Comptroller (OSC) - Controls & Special Procedures Volume XI, 3/15/85 - Special Payments - Non-Employee Payments:
http://osc.state.ny.us/agencies/accmanual/index.htm