Worker's Classification FAQs

Any individual providing a service is considered an Employee unless justification can be made to the contrary.

Documentation should be submitted to HR/DS for review and approval before the services have been rendered. Any changes to existing engagements should also be approved in advance.

If the services being provided are being performed by a vendor or individual with a Company Name and FEIN number, is a Workers Classification form required? If an individual provides a W-9 with a Company Name and FEIN and not a SSN, no form is required. For individuals that are on the Payroll providing services under a company name and FEIN, they must properly disclose the relationship on the University’s conflict of Interest form through Human Resources.

The Workers Classification process is subject to all other existing Policy and Procedures. For example:

SPA compliance issues (i.e., competitively bid for engagements > $5000)
Purchasing for Contracted and Outsourced Services
Office of Research Services

What is the required documentation necessary to submit to support a Workers Classification? The required documentation is as follows:

Workers Classification Form
Foreign National Independent Contractor Review Form
Signed Contract or Letter of Agreement
- General Service Agreement Document is available on line here
Certificate of Insurance if necessary
Form W-8 or W-9

How do I know if a Certificate of Insurance is necessary? You may contact the Risk Management Office at 57455 or email at RiskManagement@luc.edu.

Can payment be made if any or all of the documentation is incomplete or missing? No, Payment cannot and will not be made if any part of the required documentation is incomplete or missing.

Are there exceptions to the requirement of having to complete a Workers Classification Form? Yes, there are some basic exceptions to this requirement. If the services being provided are any of the following, a Workers Classification form is not required (this is NOT an exception to the W-9 form requirement).

Note Takers
Honoraria for Guest Speakers
Fellowships and Scholarships
Cantor/Musician/Choir
Proctors and Monitors
Nursing School Phlebotomists
Professional Development, Education and Learning
Study Participants
Standardized Patients

Please contact HR for additional information or clarification

Where do I send my completed documentation for review? All documentation should be forwarded to the Human Resources Department at Hr-wtc@luc.edu for review and consideration.

How will I know if the documentation has been approved and classified? Once the documentation has been reviewed and approved, either Human Resources or Disbursement Services will contact you with the result of the review. If an employee classification was determined, HR will also walk through other position and budgetary implications of the classification.

How long will it take for my submission to be reviewed? Standard turnaround by Human Resources will be 3 Days and the normal turnaround time for AP review is 2 business days. You should be contacted with the decision within 5 business days.

What type of information are Human Resources and Disbursement Services considering during the review process? The review performed is taking into consideration review criteria set forth in the IRS Publication 1779 and IRS Form SS8. The review criteria are based around three (3) categories including Behavioral Control, Financial Control and Relationship to the Parties. The following table may assist in understanding the classification criteria and common law factors.

Most likely considered an IC if you:	Most Likely considered an employee if you:
BEHAVIORAL CONTROL: Factors that show whether a hiring firm has the right to control how a worker performs the specific tasks he or she has been hired to do
Do not give him or her instructions on how to perform the work Do not provide training Do not evaluate how the worker performs	Provide instructions that the worker must follow about how to work Give the worker detailed training Evaluate how the worker does the job
FINANCIAL CONTROL: Factors showing whether a hiring firm has the right to control a worker’s financial life
Has a significant investment in equipment and facilities Pays business or travel expenses him or her self Makes his or her services available to the public Is paid by the job Has an opportunity for profit and loss	You provide equipment and facilities free of charge You reimburse the worker’s business or traveling expenses The worker makes no effort to market his or her services to the public You pay the worker by the hour or other unit of time The worker has no opportunity for profit or loss – for example, because you pay by the hour and reimburse all expenses.
RELATIONSHIP OF THE WORKER AND HIRING FIRM: Factors showing whether you and the worker believe he or she is an IC or Employee
You do not provide employee benefits such as health insurance You sign an IC agreement with the worker The worker performs the services that are not part of your regular business activities	You provide employee benefits You have no written agreement The worker performs services that are part of your core business

If determined to be an Employee, what issues must be considered? If a classification of Employee is given to a worker, HR will contact the department to work through these issues:

This worker will be set up as an employee in the Lawson HR System
The employee will track his or her hours in the Kronos System
All payments will include proper tax withholding
Employee will be issued a W-2 for their earnings

If determined to be an Independent Contractor, what issues need to be considered? If a classification of Independent Contractor is given to a worker:

Accounts Payable will set the Worker up in the Lawson AP Vendor Master
Payments will be made in full to the IC with no tax withholding
If the workers payments exceed $600 for the calendar year they will receive a Form 1099-MISC from Loyola University.

Once a workers engagement ends, what steps are required? In an IC engagement, when an engagement period is due to expire, the Accounts Payable Department will contact the department to see if a new engagement will commence. New documentation will be required and will go through the normal process. Should an engagement expire, AP will evaluate on a quarterly basis and inactivate the IC in the Vendor Master. A Vendor will not be reactivated unless the new documentation is received and approved.