Independent Contractor Hiring Process PURPOSE:  To outline the procedure for determining use of Independent Contractor Agreements (also called: service providers, consultants, or ICAs); and for submitting and processing ICA forms and Banner documents.  When to hire an Independent Contractor  What is needed for paperwork  Who signs the contract 1

Independent Contractor Hiring Process Why Is An ICA Needed? An Independent Contractor typically meets the following requirements:  Provides a unique service that is not available from another source within USNH or USNH entities could not provide the service at the time needed (i.e. due to time/staffing constraints, capabilities, etc) 2

Why Is An ICA Needed? Continued  Provides a unique service outside of USNH. The individual should be uniquely qualified, cost effective and may meet other criteria. (i.e. expert in research field, etc.)  Provides a service which encompasses 3 days or more per fiscal year, including services provided to any other USNH department, regardless of dollar amount. To see if a vendor (individual) has been paid by any USNH Department during the fiscal year, go to FAIVNDH in Banner. Any/all payments that have been processed will be there. 3

Why Is An ICA Needed? Continued  Is an individual or partnership, rather than a corporation  Non-profits, i.e. state or federal government agencies, universities, etc., do not require an ICA  Does not meet the IRS definition of “employee”  Is not a USNH employee  Does not have a personal or familial relationship with a USNH employee NOTE: Forms/Documents not meeting these requirements or incomplete forms will be returned to the department 4

How Do I Know If An Entity Is An Individual Or Corporation?  To determine whether an ICA is coded as a corporation or non-corporation, Banner users can log into FTMVEND and search by entity name. Entities coded as corporations are listed with a letter “C” under the “E” column.  Once the vendor has been found, double click on the “ID” number to bring the information forward and then do a “NEXT BLOCK”. 5

How Do I Know……? Continued  Click on the “Vendor Types” tab. Types of codes are listed with a description. If the vendor is coded as either a “Sole Proprietor” or “Partnership”, an ICA must be completed before the vendor begins work on campus. There may instances when you may want to use the ICA form for an entity other than an individual or partnership, or instances where you may wish to use the entity’s own agreement in lieu of the ICA. Please contact KSC Purchasing for direction. 6

Independent Contractor Agreement Procedures 1. Hiring Administrator determines that project requires an Independent Contractor to assist/complete work. 2. Before any work is started and/or before committing to any individual, hiring Administrator completes an Independent Contractor Agreement (ICA) form located at providing the following: a.Independent Contractor contact information (Section II) b.Hiring Administrator contact information (Section III) c.Description of anticipated service (Section IV) d.Dates of anticipated service (Section IV) e.Fees & payment arrangements (Section V) f.Selection process for choosing ICA (Section VI on page 2) g.Funding source (grant) (Section VI) h.Employee vs. ICA Determination Checklist (Page 3) 7

Procedures Continued 3. Hiring Administrator forwards completed Independent Contractor Agreement for signature. 4.Independent Contractor Signs the Agreement and returns it to the Hiring Administrator. Note: If the Independent Contractor is not already an active USNH/KSC vendor, he/she will also need to submit a substitute W-9 form also located at: so that a vendor code can be created in Banner. 5. Hiring Administrator signs the Agreement as Hiring Administrator and gives it to the Administrative Assistant contact. 8

Procedures Continued 6.The Administrative Assistant contact does the following: a.Enters a Requisition or Direct Pay document for the Independent Contractor in Banner. b.Forwards the Independent Contractor Agreement directly to the Campus Purchasing Department. Original is preferred but a faxed copy is acceptable. c.Forwards the Substitute W-9 with the agreement if applicable. d.Retains a copy of the Independent Contractor Agreement for his/her records. 9

Procedures Continued 7.Campus Purchasing Department will do the following: a.Enter the Substitute W-9 information into Banner to create a vendor code (if applicable). b.Review the ICA. c.Verify insurance coverage (or confirm that it is not needed) d.Apply final signature(s). e.Convert the Banner Requisition to a Purchase Order and process or sign off on the Direct Pay cover sheet. f.Print and mail the Purchase Order to the Independent Contractor (unless otherwise instructed by the Administrative Assistant contact). 8.Any future dollar increases or extensions of time will require an Amendment to be completed, signed and forwarded through the appropriate channels (as the original ICA was). This form can be found at A change order to the purchase order will be entered to cover showing the increase. 10

Independent Contractor Agreement NOTES 1. Legal services, insurance services or any type of accounting or auditing services cannot be processed as an ICA without special approval. 2. Bid limit ($10K) still applies on ICAs – even when written in a grant. (So contact Purchasing early.) 3. One time payments without a vendor code cannot be paid with a Direct Pay document. 11

Independent Contractor Agreement Wrap Up Contact Purchasing: If you would like personal ICA training for anyone in your area. If you have suggestions of how we can do this better With any additional questions 12