Human Resources Information Systems
Tel: 780-5628 - Fax: 780-5554 - Email: HRIS
© 2003 USM - HRIS
A Member of the University of Maine System
U N I V E R S I T Y O F S O U T H E R N M A I N E
POLICY#: 101.19
SUBJECT: GUIDELINES FOR PERSONAL SERVICE CONTRACTS
APPLIES TO: INDEPENDENT CONTRACTORS
ISSUED BY: DIVISION OF HUMAN RESOURCES
EFFECTIVE DATE: 04/01/91
NOTE: This Policy has bee replace by University of Maine
System Administrative Practice Letter #29.
Subject: Determining Employee versus Independent Contractor Status.
Copies of Administrative Practices Letters can be acquired
from the Business Services Office which processes contracts
or from the Human Resources Office.
The following are guidelines applicable at the University of
Southern Maine concerning contracting of services from
individuals. The guidelines apply to entry into a
contractual agreement with individuals who are not to be
considered employees of the University, but who perform
services for a program or department specific to the terms of
a contractual agreement.
An individual or independent contractor is defined as an
individual over whom the University would have the right to
control or direct only the result of the work performed by
the individual. The University would not have the right to
control or direct the means and methods of accomplishing the
result of the work. Independent contractors are not
considered to be employees.
Criteria which are appropriate in differentiating between an
employee and contractor are as follows:
An individual may be considered an employee if:
* The University has the right to direct and control
the individual's performance, both as to results and
as to means and details of accomplishing the result.
* The University need not actually exercise such
control; it is enough if the employer merely has the
right to do so.
* The University has the right to discharge the
individual.
* The University furnishes the individual with tools
or other implements or equipment for doing the job.
* The University furnishes the individual with a place
where the individual regularly and normally works.
An individual is an independent contractor if:
* The University controls or directs merely the end
to be accomplished, but not the means and methods
for accomplishing it.
* The University does not furnish any tools or normal
workplace to the individual.
* The individual holds himself or herself out as
available to perform similar services for the
general public or for others in the same trade,
profession or business.
* The individual does not in fact spend most or all
his or her time serving one employer or organization.
While the above criteria are not meant as all inclusive the
criteria may assist in a determination of whether an
individual may be considered as an independent contractor or
is to be an employee of the University. If determined to be
an employee the existing mechanisms for recruitment, search,
hiring and payment of wages that are used for regular or
temporary employees are to be used. As a contractor the
methodology for entry into a contractual agreement and
payment of services are in accordance with accounts payable
procedures from the Office of Business Services specific to
personal contract services. The criteria outlined above are
in accordance with Federal government regulations pertaining
to a determination of whether an individual is an employee or
an independent contractor. The State of Maine may also be
involved in this determination for taxation or other
purposes; e.g., unemployment compensation. Under State of
Maine, Department of Labor criteria specific to unemployment
compensation the State has the following standards, commonly
referred to as the "ABC Test".
A) The individual has been and will continue to be
free from control or direction over the performance
of such services both under his/her contract of
service; and
B) The service is either outside the usual course of
the business for which such service is performed,
or that such service is performed outside of all
places of business of the enterprise for which such
service is performed; and
C) The individual is customarily engaged in an
independently established trade, occupation,
profession or business.
For an individual to be considered a contractor all three of
the above criteria must be met. Again, if the individual can
be considered a contractor the methodology specific to
personal service contracts is found in accounts payable
procedures. If the individual is an employee the existing
mechanisms as established by the Division of Human Resources
are to be utilized.
It is fully expected that an individual who provides services
to the University as a contractor will comply with University
of Maine Board of Trustees established policies and
procedures, as well as those established by the University of
Southern Maine. The department, program, or college which
enters into a contractual agreement shall be responsible for
assurance of compliance by University and the contractor to
the terms of the contract. The department, program or
college shall also be responsible for determining whether an
individual is to be considered a contractor or employee and
to utilize that established methodology of either personal
service contract or employment as an employee of the
University. A department, program or college which enters
into a contractual agreement, and where a subsequent
determination is made that the individual is an employee
shall be responsible for payment of costs associated with
such determination.
Where a Personal Service Contract May Not Be Used:
A personal service contract may not be used to acquire
services of an individual who is to teach credit courses or
developmental course work. Such individual must be employed
as an employee of the University of Southern Maine. The
terms of such employment are subject to a collective
bargaining agreement.
A current employee of the University is not to be considered
as an independent contractor except where the services
provided are not related to the work normally performed by
the individual as an employee, and where the services to be
provided by the individual qualify the individual as an
independent contractor.
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pages are designed and maintained by
Human Resources Information
Systems
Tel: 780-5628 - Fax: 780-5554 - Email: HRIS
© 2003 USM - HRIS
A Member of the University of
Maine System