Independent Contractors are outside companies or individuals that provide services to the university. They are subject to the same regulations as other commodities. If their services exceed $75K, they must be publicly bid or have legal authority otherwise provided.
Services, for which a fee is legally required, that are provided by individuals or individual proprietorships (including LLCs treated as disregarded entities for federal income tax purposes) require the submission of USF's "Consulting and Professional Services Worksheet" ("IC Worksheet.")
Instructions for completing the IC Worksheet should be referred to when completing the forms.
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An Honorarium is defined by USF as a gratuitous payment made to a person as a token of appreciation for participation in an academic activity, such as a lecture, teaching or performance for which no fee is legally required. Honorarium payment requests are made using a USF Accounts Payable Payment Request Form. Departments should not complete USF's IC Worksheet when requesting an honorarium payment.
• The USF department and contractor must work together to accurately complete the "Consulting and Professional Services Worksheet." Details of the arrangement must be provided, and the form must be signed by both the USF Accountable Officer (who attests to the best of their ability the accuracy of information supplied) and by the contractor.
• Prior to submitting the IC Worksheet to Purchasing Services for approval, university departments should review the following:
- Has the IC Worksheet been filled out completely, including "proof of business" if necessary (see details below)?
- Was the IC Worksheet signed by both parties?
- Has the IC Worksheet and all supporting documentation ("proof of business") been attached to the requisition header comment field?
• The IC Worksheet requires the department to explain the work being performed. IRS laws, regulations, and court cases guide USF with determining whether to hire an individual as an "independent contractor" or an "employee." Purchasing will work with USF Human Resources and Tax Advisory Services (as needed) to make a decision to approve or reject the requisition. If denied, the department will be instructed to work with USF Human Resources to put the individual on payroll.
• USF Departments should refer to the IC Worksheet Instructions for examples of common situations classified as independent contractors (Section III) and USF employees (Section II). Some quick rules of thumb: no USF employee can be deemed an independent contractor; no one doing work that can be defined as clerical or secretarial can be considered an independent contractor; persons receiving payment on a regular basis, similar to a payroll type schedule (weekly or monthly) are considered to have on "ongoing" relationship with the university and thus more likely to be an employee; an ongoing" relationship can also exist if the person has been hired to perform the same service in the past unless they are in the business of supplying that service to other organizations besides USF. If an ongoing relationship exists, the contractor must provide "proof of business" (business card, brochure, webpage, and/or client list) along with IC worksheet which shows he/she has a business that performs the services provided to USF for others. Proof of business must be attached/included with the IC worksheet submission so all the facts and circumstances can be evaluated. Purchasing/HR/Tax will determine if it is appropriate to process payment as an independent contractor or an employee.
• Entertainers and lecturers (who are not the main instructors of record) are generally defined as independent contractors. The department should attach the brochure or advertisement (containing details of the entertainment/lecture) to the Professional Services Worksheet.
• Consultants who work exclusively with USF over a long a period of time must provide justification/documentation of reason to continue relationship as an independent contractor. For example if grant guidelines require independence, a grant narrative or proposal could be attached. A description of work requiring independence must also be provided.
• If the contractor's travel will be reimbursed in addition to his/her fee, the department should note this on a requisition comment. Standard Comment REQ TRVL can be used for this purpose.
Non-US citizens hired to perform services and non-USF citizens being paid an honorarium [via AP Payment Request Form PRF)] conducted in part or entirely within the United States and its territories are required to receive approval from Payroll prior to payment. The work and payment terms are reviewed with regard to tax laws, regulations and treaties between the worker's country and the United States.
Departments must send the following documents to Payroll for review and approval:
- W8-BEN Certification for Foreign Status for Withholding OR
- W-7 Application for IRS Individual Taxpayer ID Number (whichever is applicable)
- FNIF - USF Foreign National Tax Information Form
- Passport showing expiration date
- Independent Contractor Worksheet (unless payment is an honorarium)
- I-94 Arrival/Departure document
Once approved, Payroll will forward and approval letter to the department. A requisition should then be entered with the following documentation:
- Letter of Approval from Payroll
- Independent Contractor Worksheet (IC Instructions)
- Quote from vendor
- DO NOT ATTACH OTHER DOCUMENTATION TO THE REQUISITION. The information contained on a W8-Ben, W-7, FNIF, passport or Visa is PRIVATE. If necessary, it will be sent by Payroll to Accounts Payable when payment is requested.