An independent contractor is an individual engaged by the university to perform a specific function or task and who is free to perform this function or task completely at the individual's own discretion with regard to means and methods. No taxes are required to be withheld or paid on the compensation disbursed. The existence of an agreement or contract helps support the independent contractor position. This document should be fairly specific in what is to be provided and the amount or lack of control the university/agency has over the individual.
An employee is an individual who performs a service for the University and is working under the direction and control of the university or its employees. Direction and control can be implied to exist when the employer has the right to control both the results as well as the means and methods of the worker.
The Employee vs. Independent Contractor Checklist is to be used to provide evidence that an individual is properly classified as an independent contractor or employee. The Texas A&M University System Office of Budget & Accounting web site has provided additional guidance in this area.
If the checklist indicates that the individual is an independent contractor, a completed Independent Contractor Agreement is to be used as the source document for the payment to the individual. The Independent Contractor Agreement must have original signatures from the contractor, Academic Dean, appropriate Vice President, and The Office of Budget, Payroll & Fiscal Analysis. The fully executed agreement, 1099-Misc. Income Agreement and checklist are submitted to the Purchasing department for processing. The requisition number should also be indicated on the documents submitted.
The Employee vs. Independent Contractor Checklist must also be attached to the requisition.