What is an Independent Contractor?

People who are in an independent trade, business, or profession in which they offer their services to the general public are typically categorized as independent contractors.

How Do I Know:  Employee or Independent Contractor?

Independent Contractor:  The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax as independent contractors are self-employed.  Independent contractors should not have an office or desk at SMU.

Employee:  If the individual will perform services that are controlled by the hiring department  (what will be done and how it will be done), the person is NOT an independent contractor.  The determining factor is whether the employer controls the details of how the services are performed.

Additional Information on the IRS website:  For more information refer to the IRS website section on Independent Contractors or Employees.

Independent Contractor Determination Process at SMU

The University must correctly determine whether the individuals providing services are employees or independent contractors.  Managers should follow this process in order to minimize the risk to the University including, but not limited to, the cost of back taxes and social security payments.  The process is facilitated via the Independent Contractor Determination Form which should be submitted as soon as the dates and services are agreed upon.  Approval should be received before services are performed. Please note the form is recently updated form and should be used for all future requests.

Visit the Independent Contractor Determination webpage to learn more about the process, requirements, and approval timelines.