Important Factors to Consider
Independent Contractors
No Instructions
Independent contractors are not required to follow, nor are they furnished with, instructions to accomplish the job.
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.
Others 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.
Independent Contractor's Work is not Essential
The university's success or continuation should not depend on the service of outside independent contractors.
No Time Schedule
Independent contractors set their own work hours and schedule.
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 available.
Independent Contractors Control their Own Employees
Independent contractors should not hire, supervise, or pay assistants per the direction of the university. If assistants are hired, it should be the decision of the independent contractor.
- 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 commences.
- Work for Others. Independent contractors often work for more than one firm at a time.
- Business expenses. Independent contractors are generally responsible for their own business expenses.
- 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 adequate.
- 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.
- Termination. Independent contractors' contractual agreement cannot be terminated as long as they produce a result which meets the contract specifications.