Policy: VI.G.4x (inactive)
Issued: August 1, 1995
Latest Revision: July 1, 2001
This policy describes how consultants are classified and paid by the University.
2.0 Policy [Top]
The University hires various types of consultants for both academic and non-academic purposes. How the consultant is classified determines his/her relationship with the University, which policies and procedures apply to that relationship, and how the University will process the payment for the services rendered.
All payments to consultants must be made in accordance with University policy and procedures.
Under no circumstances should the hiring of consultants be used to circumvent established Procurement or Human Resources policies and procedures.
Organizations performing either contractual teaching services or non-teaching academic consulting normally fall into one of three categories: Institutions of higher education, public agencies, or not-for-profit vendors. In any of these instances, the department may use Procedure 6-101, "Preparing Payment Vouchers", to pay for the services. However, all transactions with "for-profit" vendors must be processed as procurements through Procurement Services. See Procedure 7-102, "Preparing Purchase Requisitions".
As related to either individual contractual teaching services or non-teaching consulting services, the University will reimburse travel expenses according to normal State guidelines and limits. Payments will be made after-the-fact for both individual contractual teaching services and non-academic consulting services. Prepayments for these services are not permitted.
2.3 Foreign National Independent Contractors, Honoraria, and Royalty Recipients
Resident Aliens ("Green" Card and Substantial Presence Test Resident Aliens) are handled in the same manner as U.S. citizens. No withholdings will be performed, and earnings will be reported on Form 1099.
Nonresident alien payments for contractual services, honoraria, and royalties must have taxes withheld at a rate of 30%. Nonresident alien independent contractors, honoraria and royalties recipients may be entitled to receive treaty benefits if they are from one of the following countries:
Australia, Austria, Barbados, Belgium, Canada, China, Commonwealth of Independent States (includes Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan), Cyprus, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Iceland, India, Indonesia, Ireland, Italy, Jamaica, Japan, Republic of Korea, Luxembourg, Malta, Morocco, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Romania, Spain, Sweden, Switzerland, Trinidad and Tobago, Tunisia, and the United Kingdom.
NOTE: Consultant payments to foreign national individuals may be limited by their type of visa.
See also Procedure 6-101, "Preparing Payment Vouchers."
3.0 Definitions [Top]
Performs services that are subject to the will and control of the employer -- both what is done and how it is done. The employer's right to control, not the exercise of that right, is a key factor. The employer can allow the employee considerable discretion, so long as the employer has the legal right to control both the methods and results of the services.
In addition to the definition of an employee, a teaching employee also has a specific assignment normally requiring instruction, research, or public service. Part-time instructors, in most cases, will be treated as employees and will be placed on the University's payroll for the duration of the teaching service. For exceptions, see INDIVIDUAL CONTRACTUAL TEACHING SERVICES and CONTRACTUAL TEACHING SERVICES in this policy.
3.3 Independent Contractor:
As defined for federal tax purposes, this is a vendor having no employment relationship to the University either by statutory, common-law, or regulatory tests. Therefore, the University has no FICA or income tax withholding obligations for the independent contractor. An independent contractor is not an "employee." The University has the right to control the result to be accomplished but not the means and methods of accomplishing the result.
It is the department's responsibility to determine if an individual is an employee or an independent contractor. The "Employee/Independent Contractor" form in Procedure 6-101, "Preparing Payment Vouchers" is used for this determination. Each situation is different. Those with questions should contact the Department of Human Resources.
3.4 Individual Contracting Services:
Part-time teaching engagements at the University, in most cases, are to be treated as employee/employer relationships. Instructors for such assignments will be placed on the University's payroll for the duration of the course.
Exceptions to this policy will be permitted only if the following three conditions are met:
- The course is sufficiently short in duration (not greater than seven calendar days), AND
- The instructor does not meet the employer - employee test, AND
- The course is to be a one-time presentation only.
If the instructor or course qualifies as an exception, the department should follow Procedure 6-101, "Preparing Payment Vouchers". In this way, the instructor will be paid as a consultant, not as an employee.
3.5 Non-Teaching Academic Consulting:
In addition to the definition of an independent contractor (see above), this is a person(s) providing research or other academically related services on a short-term basis to the University.
Training of University faculty and staff does not qualify as a non-teaching academic consulting, nor does entertainment, the repair of equipment, or the development of software.
A non-teaching academic consultant must have demonstrated expertise in the discipline for which s/he is providing the service. Such expertise may be established by advanced academic degrees, published works and other accomplishments in the individual's discipline.
The services are normally purchased on a Sole Source basis, provided the chair of the academic department certifies that: "This is the only practicable source from which the University can acquire these services at this point in time."
Non-teaching academic consultants are most often individuals, institutions of higher education, or public agencies. However, such services can be provided by not-for-profit organizations. Non-teaching academic consultants are not normally from for-profit firms, but if so, are procured through Procedure 7-102, "Preparation of Purchase Requisition", similar to non-academic consultant services.
Non-teaching academic consultants cannot be employees of the University of Virginia during the period of service, nor 90 days before or after.
- The use of a particular non-teaching academic consultant may not be regarded as a condition for any purchase, gift, or other procurement.
- Use of a non-teaching academic consultant is limited to circumstances where long term employment of an individual is not feasible, desirable, or practical.
- The use of non-teaching academic consultants is not meant as nor should be used as a means to bypass the employment requirements of the University.
An honorarium is a token of appreciation paid to an individual for services performed for which payment is not required. The individual receiving the honorarium must satisfy the definition of an independent contractor (see above). The services involved vary, but are generally associated with oral presentations made at University sponsored functions. The arrangement between the individual and the University is informal; it does not involve a contract and invoicing is not required.
See also Policy VII.R.13, "Honoraria."
3.7 Non-Academic Consulting:
In addition to the definition of an independent contractor (see above), non-academic consulting involves person(s) or vendors providing services to the University for non-academic purposes. The University procures non-academic consultants/services by means of Purchase Requisition.
See also Procedure 7-102, "Preparation of Purchase Requisition".
4.0 References [Top]
For additional information, see also:
5.0 Approvals and Revisions [Top]
Previous version in effect from 8/1/95 to 7/1/01 available in policy archive.