Hiring Independent Contractors

An independent contractor is an individual or a firm providing specific services that assist a Principal investigator (PI) in accomplishing the work the PI has agreed to perform for the award sponsor. Independent contractors can fall into two categories:

• A company or firm providing service to the public or broad clientele. This includes organizations supplying temporary office services.
• Individuals who are clearly in business for themselves and offer their services to the general public, and as such, are self-employed.

The school should hire independent contractors only when the required skills are unavailable, or faculty or staff cannot provide them. Our faculty and staff cannot act as independent contractors/consultants when performing services for sponsored projects. A worker cannot be issued both a Form W-2 and a Form 1099 by RFCUNY in the same calendar year.

To determine whether an individual should be contracted as a contractor/consultant or an employee, please refer to the classification guidelines available here.

Requirements to Hire an Independent Contractor

PIs must meet the following conditions to initiate the hiring of independent contractors:

• A contract or agreement for the project was fully executed.
• Unless the budget is flexible, the approved project budget has sufficient funding in the consultant budget line.

The expense should be allowable under the funding agency and Research Foundation (RF) policies.

For any questions regarding the above requirements, please contact your Grants Officer.

How to Engage an Independent Contractor

For amounts of $5,000.00 or more, the RF will enter into an Independent Contractor Agreement (ICA).

• An ICA is the document by which the RF engages an independent contractor on behalf of a PI. PIs or their administrator should submit requests for ICAs no later than 30 calendar days before the contractor’s work is scheduled to begin. A successful ICA request will include the following documents:
• Contractor’s scope of work;
• Dated Client List – This item can be replaced with a current website, brochure/advertisement, form 1099, an online profile;
• Resume/Bio/CV;
• Contractor’s contact information and address;
• Reporting Schedule (if applicable);
• Sole Source Justification, if a PI has not selected the independent contractor through a competitive bidding process;
• Contractors signed W9.

For amounts less than $5,000, the RF will engage the independent contractor via a Memorandum of Understanding (MoU). Although the agreement is named differently, the procedure to request an MoU is identical to the procedure for the ICA.

A successful MoU request will include the following:

• Contractor’s scope of work;
• Dated Client List – This item can be replaced with a current website, brochure/advertisement, form 1099, an online profile;
• Resume/Bio/CV;
• Contractor’s contact information and address;
• Reporting Schedule (if applicable);
• Contractor’s W9.

An MoU does not require a sole source justification.

ICA and MoU requests, including all the required documents, are submitted via Contract Manager in the RF system. The user guide to the Contract Manager System is available here.

Please note that if a request for an MoU brings the total compensation to the Independent Contractor across all MoUs issued in a calendar year to $5,000 or more, an ICA must be requested.