- How can I determine what qualifies as an independent contractor?
You can refer to Independent Contractor Definition and Examples.
- What is the difference between an independent contractor and a vendor?
Independent contractors are a subgroup of vendors that typically operate under a Social Security Number, while other types of vendors have a Federal Tax ID. However, it is possible that a company with a Federal Tax ID and only one employee (i.e., a sole proprietor) might qualify as an independent contractor. When in doubt, please contact Purchasing Services by email or phone (213-740-9405) for clarification.
- What forms are required for an independent contractor engagement?
Please go to Forms for Independent Contractors for a complete list of the forms to be used when engaging an independent contractor.
- Can suppliers operating under a Federal Tax ID submit an Independent Contractor Agreement (ICA) in lieu of a contract?
No. A supplier must provide a formal contract, scope of work, agreement, etc., indicating the work to be done, the period of time involved and the cost. If the company has not done business with the university in the past, the department must follow the process for requesting a new supplier before engaging the independent contractor.
- How do I find out who serves as my department's HR Partner?
You can refer to the HR Partners list or contact Human Resource Adminstration at 213-821-8111.
- What do I do if my HR partner is out of the office for an extended period of time (i.e., vacation, business travel, etc.)?
HR Partners who are out of the office for an extended period are required to designate a delegate to verify the independent contractor's employment status and to sign ICA forms in their absence. Delegates must indicate on the signature page of the ICA form the name of the HR Partner on whose behalf they are signing the form. ICA forms submitted without the name and/or signature of an HR Partner will be returned to the department.
- How do I know that I am using the most up-to-date version of the ICA form?
The best way to ensure that you are using the latest version of any form is to go to the web site (www.usc.edu/purchasing/independentcontractors), and download it rather than keeping a copy of it on your computer. If you submit an outdated version of the form, you run the risk of having it returned to you because of missing information. For example, the conflict of interest section that requires the initials of the independent contractor was added to the ICA form in 2010. If the form is one with a revision date prior to 2010, you will be required to resubmit a new form.
- What factors are used in determining whether an individual is an independent contractor or an employee?
Among other things, an employee:
- Complies with other employees' instructions about when (set hours), where, and how (details) he or she is to work;
- Requires training on how to do the job by an experienced employee (as opposed to a general introduction to the department/school and its personnel);
- Performs services integrated into normal business operations (that generally shows that the worker is subject to direction and control);
- Maintains a continuing working relationship with the person or persons for whom services are performed.
- Are there any exceptions to the rules governing employee status vs. independent contractor status?
Yes. One of the most common exceptions is for individuals residing in countries with which the U.S. has no employment relations (i.e., China). Independent contractor status will be approved for such individuals, even if they qualify as an employee according to the Work Status Evaluation.
- What should I do if I have an exception that I cleared with Human Resources prior to submitting the paperwork to Purchasing Services or Disbursement Control?
To prevent unnecessary delays, if you have already been granted approval from Human Resources on an ICA prior to submitting the paperwork for processing, please indicate that in the form of a cover memo, email, or note on the signature page of the ICA form.
- If I am submitting an amendement (Attachment B) to an ICA submitted prior to January 13, 2012, am I required to submit a Work Status Evaluation form with the amendment?
Yes. Any change made after January 13, 2012, to an existing ICA must be accompanied by a fully executed Work Status Evaluation form.
- Are there any exceptions to the Work Status Evaluation requirement?
Yes. If a department engages academic guest speakers on a limited basis (i.e., no more than once per semester), then a Work Status Evaluation form is not required. However, Disbursement Control and/or Supplier Data Management Services is still required to verify through the university's payroll system that the individual is not an employee. HR Partners and/or the Business Services auditor may also request the form at their discretion if they feel that circumstances warrant the need for an evaluation at any time during the engagement or audit process.
- Who is responsible for maintaining current copies of the Work Status Evaluation form?
Hiring managers are responsible for keeping copies of the WSE for all of their independent contractors and preparing a new one for each fiscal year. If more than one department engages the services of the same independent contractor, each department is responsible for maintaining their own WSE for that individual.
- What is meant by the word "substitute" in questions 3.10 and 3.11 of the Work Status Evaluation?
If an independent contractor finds it necessary to engage other individuals in order to meet his/her obligation to USC, it is the independent contractor's responsibility to engage and compensate them. However, when a department is engaging the services of an individual such as a photographer, writer, etc., and the individual is unable to complete the engagement, the department has the right to terminate the agreement and find someone else to complete the assignment.
- Would engaging a professional grant writer for a short-term single project qualify for the Payment Request for Limited Engagement of Individuals?
No. If the service performed by an individual constitutes how he/she makes a living, it would be considered a business relationship, requiring an Independent Contractor Agreement and Work Status Evaluation.
- If an individual is not currently engaged by other clients, but has the freedom to accept other engagements should they become available, how should I answer question 5.2 on the Work Status Evaluation?
If the individual is free to accept additional engagements during his/her engagement with USC, you may answer "Yes" to question 5.2, even though the individual may not currently be engaged with anyone but USC. The intent of this question is to determine whether or not USC represents the individual's primary or sole means of support.
- How would I engage a one-time speaker who is a foreign national that qualifies for the Payment Request for Limited Engagement of Individuals?
Departments paying foreign nationals (non-resident aliens), with the Payment Request for Limited Engagement of Individuals would following the same guidelines used for engaging foreign nationals as independent contractors (Information About Independent Contractors who are not U.S. Citizens.
- My department invites certain guest lecturers to speak once or twice every year. Would this qualify as an exception to using the ICA and Work Status Evaluation Form?
As long as the guest lecturers do not count public-speaking as their primary source of income, they would qualify for engagement using the Payment Request for Limited Engagement of Individuals.
- Is there anything else required besides the Payment Request for Limited Engagement of Individuals when using a 5 account?
If the individual is being paid from a 5 account, the applicable principal investigator for the account must complete the Request for a Consultant on a Sponsored Project (Attachment A), and submit it with the DV request and the Payment Request for Limited Engagement of Individuals to the Department of Contracts and Grants for approval.