University Nevada Las Vegas INDEPENDENT CONTRACTOR OR EMPLOYEE

University Nevada, Las Vegas INDEPENDENT CONTRACTOR OR EMPLOYEE? Presented by: YVETTE WALTON Assistant Controller Accounts Payable X 51143

ISP VS. EMPLOYEE • BEHAVIOR CONTROL • FINANCIAL CONTROL • RELATIONSHIP OF PARTIES • UNLV POLICIES FOR ISP’S • UNLV’S ISP CONTRACT

University of Nevada Las Vegas Accounts Payable Department ISP vs. EMPLOYEE BEHAVIORAL CONTROL EXAMPLE: INSTRUCTIONS – if you give extensive instructions on how work is to be done, this suggests that the worker is to be classified as an employee. Instructions can cover a wide range of topics, for example: A) How, When or Where to do the work B) C) D) What tools or equipment to use What assistants to hire to help with the work Where to purchase supplies and services

University of Nevada Las Vegas Accounts Payable Department ISP vs. EMPLOYEE BEHAVIORAL CONTROL EXAMPLE: INSTRUCTIONS – If less extensive instructions about what should be done, but not how it should be done, may indicate classification as an ISP. For instance, instructions about time and place may be less important than directions on how the work is performed. TRAINING – If training is provided about required procedures and methods, this indicates that the work is to be done a certain way, and suggests the classification may be an EMPLOYEE.

University of Nevada Las Vegas Accounts Payable Department ISP vs. EMPLOYEE FINANCIAL CONTROL The following facts show whethere is a right to direct or control the business part of the work. – SIGNIFICANT INVESTMENT – EXPENSES – OPPORTUNITY FOR PROFIT OR LOSS

University of Nevada Las Vegas Accounts Payable Department ISP vs. EMPLOYEE RELATIONSHIP OF THE PARTIES: These are facts that illustrate how the business and the worker perceive their relationship.

University of Nevada Las Vegas Accounts Payable Department EMPLOYEE TAX REPORTING WHEN A WORKER IS AN EMPLOYEE: ALL PROSPECTIVE ISP INDIVISUALS STATUS WILL BE VERIFIED THAT NO CURRENT OR PREVIOUS EMPLOYMENT RELATIONSHIP EXIST. A/P WILL ALSO VERIFY WITH THE IRS USING THE 1099 MATCHING TOOL TO MAKE SURE TIN’S AND SS# MATCH THEIR RECORDS.

University of Nevada Las Vegas Accounts Payable Department ISP TAX REPORTING WHEN A WORKER CLASSIFICATION IS AN ISP THE IRS REQUIRES THE UNIVERSITY TO PROVIDE CLEAR AND CONVINCING EVIDENCES SUPPORTING A DECISION TO TREAT AN INDIVIDUAL AS AN INDEPENDENT CONTRACTOR, USUALLY IN THE FORM OF THE COMMON-LAW 20 QUESTION TEST

20 QUESTIONS • Evaluation for Determining Independent Contractor Status • Hiring departments are responsible for providing information to properly classify individuals as employees or independent contractors. The following questions are intended to measure the extent of control which the University/NSHE may exercise over the worker. Generally, if there is a good deal of control over what the worker does and how the worker does the work, there should be an employee relationship established (EDOC). If there are few elements of control, an independent contractor relationship may be appropriate.

PREPARING UNLV’S ISP CONTRACT • • • INDEPENDENT SERVICE PROVIDER CONTRACT (ISP) INSTRUCTIONS FOR USE: The purpose of this form is to be used for contracts with individuals engaged in technical, professional or specialized skills such as guest speakers, athletic officials, consultants, performers and to request honorarium payments to individuals who: Provide one-time nonrecurring services. Are to be paid $10, 000. 00 or less including ZERO fees to be paid (no receipts required, all payments reportable as taxable income); and Who are not otherwise employed by the Nevada System of Higher Education (which includes CCSN, DRI, and GBC, TMCC, UNLV, UNR, WNCC, or NSHE System Administration.

• • • • • Vendor # INDEPENDENT SERVICE PROVIDER CONTRACT (ISP) Payee Information All information is required (including answering questions A-C below): Service Provider Payment Information: FULL NAME ______________________ Last Name (Please Print or Type) MI First Name U. S. TIN/Social Security Number __________________________ Payee must complete Form W-9 (if a U. S. Citizen) or W-8 BEN (if International) Engagement Date(s) _____________ to _______________ MM/DD/YY Total Payment Amount $ ______________________ Check Due Date______ (Not to exceed $10, 000 use ICA if above this amount) (Not before end date) Mailing Address (number)__________________________________ (PO Boxes are not accepted) City________________State_____________Zip__________ Is the payee a current or former (within the current calendar year) employee of any institution of the Nevada System of Higher Education? If the answer to question A is yes, do not proceed with this form. Process the payment on an employment document. Yes • • • No B) Is the payee a member of the same household as a NSHE employee? If the answer to question B is yes, do not proceed with this form. Under the Board of Regents “Conflict of Interest” policy (B/R Handbook, Title 4, Chapter 10), payment is not allowed. Yes No Is the payee a U. S. citizen or lawful permanent resident (green card holder)? If the answer to question C is no, contact the NRA tax specialist at 51243. “See information regarding U. S. tax information for Nonresident Alien Consultants and Guest Speakers. Yes No

• ACCOUNT INFORMATION: • • • FUND AGCY ORGN OBJT SOBJ AMOUNT TOTAL Disposition of check if not to be mailed to the payee’s address: Call for pickup: Notes: The Nevada System of Higher Education is an equal opportunity/affirmative action employer and does not discriminate on the basis of race, color, religion, sex, age, creed, national origin, veteran status, or physical or mental disability in any program or activity it operates. The NSHE employs only United States citizens and individuals lawfully authorized to work in the U. S. Payee must complete and attached Form W-9 (if a U. S. citizen/resident) or W-8 BEN (if international) PAYMENT AUTHORIZATION: Based on the above, AGREEMENT: I have read and agree to the It is my determination that the payee meets above representations and assert that they are the guidelines for one-time, nonrecurring payment. true and correct. __________________ ____ Authorized Accounts Signature Date Payee Signature Date ________________________________________ Printed Name of Authorized Signer Mailing Address (PO Boxes are not accepted) _________________________ Department Mail Stop City State Zip _________________ ________ Department Contact Phone Number Fax Number ______________________________ Telephone Number Fax Number e-mail address CONTROLLERS OFFICE REVIEWBy: __________Date: _____ • • • •

CODING THE EXPENSE Effective July 1, 2008 new Sub -object codes for consulting, legal, lobbying and architecture & engineering expenditures are to be used.

Coding the Expense For University Departments Use: Consulting 30 -08 General Operations 61 -08 Other Fixed Assets Legal 30 -40 General Operations 61 -07 Other Fixed Assets Architecture & Engineering 30 -05 General Operations 61 -05 Other Fixed Assets Lobbying 30 -06 General Operations

Coding the Expense For University Departments Use cont. For all others use: Independent Contractor Fees 30 -21 Reimburse Independent Expenses 30 -22

Coding the Expense For Grants & Contracts Use: Consulting 45 -18 Grants & Contracts Legal 45 -12 All Legal Fees Architecture & Engineering 45 -15 All Architecture & Engineering Expenses

• Contract Exhibits A, B and C. ISP # ________ • Exhibit A. Explain in detail what the contractor will do specifically what will be done by the contractor, where the work will be accomplished, and when the work will be completed). • Exhibit B. Indicate the total amount of payment and the date when the payment will be made. The date the payment will be made should be the ending date of this contract. • Exhibit C. List any special conditions that apply.

When your ISP is a Non-Resident Alien The use of a nonresident alien as an independent contractor can be a lengthy and difficult process. Many additional forms and increased scrutiny are necessary when bringing a nonresident alien onto campus. Prior to initiating any of the paperwork discussed in this session, please contact Debbie Honrath at (702) 895 -1243 the Non-Resident Alien Tax Specialist for assistance with foreign visitors.

ISP VS. EMPLOYEE Questions? Thank You for your time! http: //Accounts Payable@unlv. edu