Special Consultant-Independent Contractor Hiring Procedures
Practice Directive 156
Request for Appointment of Special Consultant (P156A)
Effective date: June 1998, Revised August 2004
P156.1 The purpose of this Directive is to implement IRS, State and CSU policies and regulations concerning the methods for hiring and paying an individual for personal services:
1) as an employee of SFSU by appointment to the Special Consultant or other appropriate CSU classification, or
2) as an Independent Contractor by use of a Personal Services Contract.
P156.2 These procedures apply to all individuals hired to perform personal services for the University including off-campus individuals, staff, faculty, administrators and students.
P156.3 Procedures for hiring an individual as a Special Consultant or as an Independent Contractor under a Personal Services Contract are established and administered through the Human Resources Department.
P156.4 A SPECIAL CONSULTANT is an individual hired as an employee of SFSU and appointed in the classification of Special Consultant to work under general direction to complete a professional assignment which requires the consultant's particular knowledge, ability or expertise. Individuals may be appointed to the Special Consultant classification when no other appropriate CSU classification is available but when the Campus exercises general direction over the performance of services and when the work is generally a regular part of University business. Total time base in all state and CSU employment can not exceed 125%. Payment is at a daily rate.
P156.5 If a current employee (staff, faculty or student) is assigned a task or project outside the hours and scope of regular job duties either within the department/division or by another department/division, the employee must be assigned to a concurrent CSU classification or to the Special Consultant classification. If work to be performed is similar to the current classification and the current time base is full-time, the employee (if non exempt) must receive overtime or compensating time off (OT/CTO) in accordance with the Fair Labor Standards Act and applicable collective bargaining agreement. Departments may transfer appropriate funds to cover overtime expenses within or outside the department. OT/CTO is subject to taxes but is not subject to retirement deductions.
P156.6 Special Consultants must be certified as eligible to work under the provisions of the Immigration Reform and Control Act (IRCA); are covered by workers compensation and unemployment insurance through the University; accrue no benefits such as sick leave, vacation, health and dental benefits; and do not accumulate seniority status. Special Consultants participate in one of several University retirement plans and may be subject to Social Security and/or Medicare deductions.
P156.7 An INDEPENDENT CONTRACTOR is an individual who is not a current CSU or State employee; is engaged in a distinct occupation, profession, business or trade not regularly a part of University business; agrees to do a specific piece of work for an agreed upon fee; provides services to non University clients; supplies his/her own tools, materials and work space.
P156.8 Independent Contractors are not eligible to participate directly or indirectly in SFSU benefit programs, and the University is not required to verify immigration status under IRCA provisions.
P156.9 Existing state statutes confer State employee status, under certain circumstances and regardless of independent contractor status, to individuals in the following categories:
• Artists, authors, and creators of copyrighted work;
• Computer consultants and entertainers;
• Unlicensed construction workers;
• Homeworkers; and,
• Employees from leasing or temporary service firms.
Departments intending to contract individuals for services in the groups listed above should contact the Human Resources Department for advice.
P156.10 Procedures for appointment of a Special Consultant: Complete and submit to the Human Resources Department at least five (5) days prior to effective date of appointment:
a) Request for Appointment of Special Consultant (P156A)
b) Biographical Information (P002-A)
c) If the individual is not a current employee, the following documents must also be completed:
1) Employee Action Request (EAR),
2) Oath of Allegiance,
3) Designation of Person Authorized to Receive Warrants,
4) Immigration Reform and Control Act Form I-9.
The Human Resources Department will process the documents.
P156.11 Procedures for hiring an Independent Contractor: Complete and submit to the Human Resources Department at least five (5) days prior to effective date of work to be performed:
a) IRS Form SS-8 (Determination of Employee Work Status)
b) Independent Contractor Status Determination Statement (P156B)
c) SFSU Purchase Requisition (until 12/31/2004)
d) Tax ID form #204 (Vendor Data Record)
P156.12 Once approved in the Human Resources Department, the Independent Contractor documents will be forwarded to the Purchasing Department for processing. If the total expenditure is expected to exceed $1000, the job must be advertised in the State Contracts Register or be granted an exemption from advertising (complete form STD 821). Jobs over $10,000 must be formally bid. Please note that advertising and bidding processes require additional lead time.
P156.13 Federal penalties for employee/independent contractor misclassification include:
a) 1.5% of wages paid plus 20% of FICA, that should have been paid by the employee;
b) a liability for the unpaid portion of the employer FICA; and
c) a penalty for the University's failure to withhold 20% of a non-corporate independent contractor's pay for income tax liability.
P156.14 State of California Management Memo 92-20
IRS Code Sections 3121 (D) 6651, 6652 and 6662
P156.15 All forms are available in the Human Resources Department. Challenges/appeals made to the determination regarding employee work status will be forwarded to the IRS for authorization.
P156.16 Attachment: Determination Factors - MM 92-20