Classification of Independent Contractors versus Employees

An independent contractor is an individual who provides personal or professional services to clients or businesses under a contract, rather than as a traditional employee. Unlike employees, independent contractors have the freedom to choose how, when, and where they work, allowing them to operate their own businesses and manage multiple clients, while their clients specify the deliverable(s) to be provided or the result(s) to be accomplished.

The distinction between independent contractors and employees is important for the University. Federal regulations, primarily set by the Internal Revenue Service (IRS) and enforced by the Department of Labor (DOL), define specific criteria for determining whether an individual qualifies as an independent contractor or an employee.  There are also University System of Georgia (USG) policies that define which individuals KSU has the ability to classify as independent contractors.

2024 Guidelines for Honorariums

 

  • There are several elements to consider in determining if a worker qualifies for Independent Contractor status. Below are a few key factors to consider. Should you have any uncertainty, please contact HR at compreview@kennesaw.edu for guidance.

    1. Is the worker a former employee of KSU? If yes, the time since termination of employment must be taken into account when determining IC status. Please contact compreview@kennesaw.edu for review.
    2. Is the worker a retiree of USG? If yes, per USG policy retirees cannot have IC status.
    3. Is the worker a current employee at another USG institution? If yes, they do not qualify for IC status. The Dual Appointment Assignment (DAA) process may be reviewed.  Please contact KSU’s DAA Coordinator at hr@kennesaw.edu.
    4. Do the services to be provided meet the key factors of independent contractor status?
      1. Control and independence: The level of control a business has over how and when a worker performs their tasks. Independent contractors typically have more freedom in choosing how they complete their work. Consider whether the proposed individual contractor gets to dictate how and when they do their work.
      2. Financial Investment: Independent contractors often invest in their own tools, equipment, and resources, whereas employees are generally provided with the necessary tools by their employer.
      3. Relationship Type: Independent contractors usually have a project-based, temporary relationship with clients, whereas employees have an ongoing, continuous work arrangement.

  • Once the Independent Contractor status is verified, the next step is to determine what kind of agreement is needed.  The What Kind of Agreement Do I Need job aid was created to help navigate this review and determination.   In accordance with the Contract Approval and Signature Authority policy, contracts must be reviewed and approved through the KSU Contract Management System (CMS) before signature.  Not all agreements require uploading into the CMS for review – please see the list of exceptions.

  • To enhance the academic experience of our students, unpaid speakers may be invited to contribute to the educational content of KSU courses and programs.  The Guidelines for Unpaid Speakers at Kennesaw State University outlines the requirements and expectations of unpaid speakers.

    The department’s point of contact for the unpaid speaker must ensure the unpaid speaker is provided the Guidelines and any questions answered.