The need for contractual services should be identified by the ECU faculty or staff member. The services to be provided should be determined to be essential and due to the nature of the services needed, cannot be provided by employees already working at ECU. Contractual Services payments may not be paid to ECU employees. An ECU employee participating as a simulated patient can be paid.
The ECU faculty or staff member should determine based on the twenty factors issued by the Internal Revenue Service (IRS) that the recipient to be contracted to provide the services can be classified as an Independent Contractor. The ECU faculty or staff member should review the services to be provided by the contractor with the department representative that will be signing the form in Section #16 to see if they agree that the contractor would pass the "twenty factor test" and would be viewed by the IRS as an Independent Contractor. If yes, the ECU faculty or staff member should proceed with the next step. The department representative should contact the Vice Chancellor/division representative or the Director, Classification and Compensation (telephone Nonie Garcia at 328-9826 or email at garciaw@ecu.edu) if there are any questions about the twenty factors or to determine the type of employment relationship and the best method of payment to the recipient. The University may be subject to extensive IRS fines and penalties if a recipient is treated as an Independent Contractor when they should have been classified as an employee. The responsibility for this determination falls on the department that employs the recipient.
The ECU faculty or staff member should initiate a selection process in order to secure the most qualified individual available, considering the nature and extent of services to be required. During the interviewing process, the ECU faculty or staff member should inform the applicants of the Independent Contractor status and the tax implications for the recipient. A Form 1099-Misc will be issued by ECU at the end of the year if the payment(s) made during the year aggregate to more than $600. It is the responsibility of the department to ensure the charges for the services are appropriate considering the qualifications of the recipient, his/her normal charges, and the nature of the services to be provided.
The ECU faculty or staff member or department representative should contact the Office of International Affairs prior to hiring nonresident aliens. This office is responsible for providing guidance, information and other materials on immigration and visa issues. Foreign individuals invited to ECU must enter the country with the appropriate visa to ensure that ECU can make all payments for contractual services legally and in a timely fashion. The payee must include a (photo) copy of his/her visa to expedite matters.
If the services will require that the recipient is at ECU more than 3 days per month, the ECU faculty or staff member needs to contact the Contracts Manager at Materials Management (telephone at 328-6434) to initiate a personal services contract. Personal services contracts are required to protect the University from liability due to the presence of a non-employee being on the premises and having access to University property. It is the responsibility of the department to ensure that this occurs. If the services will require three or less days per month, no contract usually is required unless payment will exceed $5,000. However, check with your division office to ensure that their specific requirements are being met.
Sections #1-14 of the Contractual Services Payment Request form should be completed at this point in the process.
After completion of the services, the ECU faculty or staff member should sign Section #15 certifying that the services were rendered satisfactorily, and that the payee is an independent contractor as defined by the "twenty factor test", and that a contract was approved.
The ECU faculty or staff member should forward the form to the department representative for signature in Section #16. The department certifies that the services and budget were authorized and approved.
The department should forward the form to the division representative for signature in Section #17. The division representative certifies that the services and budget were authorized and approved.
The division should forward the form to the Department of Human Resources for signature in Section #18. Signature by the Department of Human Resources certifies that the payee is not an ECU employee.
Human Resources should forward the form to Materials Management for signature in Section #19. Signature by Materials Management certifies that we are covered by a Personal Services Contract to ensure that the University does not experience any liability as a result of this service.
Materials Management should forward the form to Accounts Payable to be paid. Accounts Payable will receive a signature from Grants Administration (if applicable). A signature by Grants Administration in Section #20 certifies that the services and budget were authorized and approved.
