Worker Classification

If the University classifies an employee as an independent contractor without a reasonable basis for doing so, the University may be held liable for employment taxes for that worker by the Internal Revenue Service.

The IRS uses three characteristics to determine the relationship between businesses and workers:

  • Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means.
  • Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker’s job.
  • Type of Relationship factor relates to how the workers and the business owner perceive their relationship.

Factors to Consider:

  • Previous work experience – Is the person a current or former Georgetown University employee or independent contractor?
    • Type of work performed for the University by current/former employees may dictate how we can engage them for future work.
    • Generally, we cannot engage someone as a contractor to perform work that they performed as a University employee in the past. In this scenario, the person should likely be hired as an employee.
    • If a contractor has been engaged for a long period of time, for the same, continuous services, we should consider whether the individual should be hired as an employee if they do not provide similar services to other ‘clients’ (among other factors to be considered).
  • Type of work and how work is performed
    • Any person who provides teaching/course instruction services must be hired as an employee.
    • If there are current University employees who perform similar duties, we should not hire independent contractors to perform this same work. Employees should be hired to perform this work.
    • If a person is a subject-matter expert in a specific field or if they possess unique skills, we should consider whether there are University employees who possess this same knowledge/skills. If not, then it may be appropriate to engage an independent contractor to provide services for short-term projects.
    • Individuals performing services under the supervision/direction of University employees should likely be hired as employees. If the University dictates how a person completes their work (i.e. if the University determines the process/means through which an end product/deliverable is created), then the person should be hired as an employee.
  • Length of our relationship with the service provider
    • If the University intends to hire an independent contractor as an employee after their contracted work is complete, this person should be hired as an employee to perform the work.
    • If an independent contractor’s agreement is extended for a longer timeframe and/or additional paid work, we should consider whether the total length of time of engagement with this individual looks more like an employer/employee relationship .
    • If a contractor could not/does not provide similar services to other clients concurrently with their work for Georgetown University, we should consider hiring them as an employee.
  • Payment terms
    • Independent contractors should generally be paid on a per-deliverable basis (i.e. paid unique dollar amounts for specific tasks/deliverables completed). Paying on a regular basis (daily/weekly/monthly/quarterly), rather than at the conclusion of a project or when a milestone is reach, can be indicative of an employer/employee relationship.
    • Except for in very limited circumstances, independent contractors should not be reimbursed for business expenses. They should absorb these expenses as a part of their regular course of business.

When a GU Department submits a contract through the Purchasing & Contracts group, an Independent Contractor Tax Questionnaire (ICTQ) is required to be completed if the contract is with an individual or company with two or less employees. Please read the ICTQ Instructions carefully before submitting your contract. The ICTQ must be completed by the GU department, not the IC. Submitting an inaccurate or incomplete ICTQ will create delays. The Tax Department reviews the questionnaire and contract submitted to the Purchasing & Contracts group as part of the GMS Contract review and approval process.