Independent Contractor vs. Employee Status Determination

When anticipating obtaining the services provided by an individual, an evaluation may be needed to determine whether the individual should be classified as a university employee or an independent contractor. The default legal classification is that of an employee. There should be clear evidence to support classifying an individual as an independent contractor. Employers found violating the FLSA’s employee vs. independent contractor classification rule will likely be required to pay back wages, including overtime, reimbursement for out-of-pocket expenses, penalties, and possibly damages and/or criminal and civil penalties.  Misclassification is a common and often expensive mistake. The Office of Business Operations is responsible for determining the correct classification for individual providing services.  

Below are six factors used to analyze employee or independent contractor status under the FLSA:
(1) opportunity for profit or loss depending on managerial skill
(2) investments by the worker and the potential employer
(3) degree of permanence of the work relationship
(4) nature and degree of control
(5) extent to which the work performed is an integral part of the potential employer’s business; and
(6) skill and initiative.

No factor or set of factors among this list of six has a predetermined weight.  Additional factors may be relevant if such factors in some way indicate whether the worker is in business for themself (i.e., an independent contractor), as opposed to being economically dependent on the employer for work (i.e., an employee under the FLSA).

In an effort to assist us in making this determination, we ask that you complete the Employee vs Independent Contractor Status Determination Form via Business Operations Service Hub.  If you have questions regarding the classification, please contact Jill Thrasher at jill.thrasher@uni.edu, Office of Business Operations.