TUC/CSUN Update to Independent Contractor Procedure due to CA Assembly Bill 5

Dear Principal Investigators and Research Administrators:

This notification provides an update to the existing Independent Contractor procedure.

The campus is currently working on finalizing the independent contractor form to address the guidelines set by CA Assembly Bill (AB) 5. The new form will be rolled out and used by the campus and auxiliaries, including The University Corporation. While we wait for the updated form and procedure from campus, TUC is still required to adhere to this state law.

Due to CA AB 5, which addresses the “Employment Status” of workers who claim to be Independent Contractors and not employees, a review of the “employer-employee” relationship must be completed. The review requires a detailed analysis of each situation’s unique circumstances. Because of recent changes in the law, past approval of an individual as an independent contractor should not lead to a presumption that the same classification will be made again. Convenience cannot be a determining factor for classification. It is important to understand that misclassification can result in serious financial penalties and consequences for TUC and the campus.

Beginning December 2020, TUC will now require that the attached Independent Contractor checklist, which was initially rolled out in June 2019, be completed and included in all request for independent contractor forms, together with the individual’s resume. Once the campus rolls out the new independent contractor form (see attached draft), targeted to be in January 2021, below will be the changes in the procedures: 

Difference	Current procedure	New procedure (possible roll out January 2021)
Dollar threshold	CA residents and less than $500 - submit minor contract service invoice and check request. Over $500 and if individual is not a CA resident - submit a request for independent contractor form, resume and checklist. Requests must be submitted at least two weeks prior to the expected dates of the services.	No dollar threshold. The new independent contractor form will be used for all requests to pay individual as a contractor or consultant. Requests must be submitted at least two weeks prior to the expected dates of the service.
Review of the form	Accounts Payable receives the form and reviews if all supporting documents are attached.	Human Resources (HR) will review the answers in the questionnaire to determine if the individual must be classified as an employee or as a contractor. If individual will be classified as employee, HR will contact PI or supervisor to complete HR paperwork and sign in.

As a reminder, our current procedure requires that request for independent contractor must be received by TUC Financial Services department at least two weeks prior to the expected dates of the services. If the independent contractor is a nonresident alien (NRA), as defined by IRS, please contact TUC prior to retaining services.

 Independent Contractor Form - DRAFT

 Independent Contractor Checklist (originally sent on 6/4/19)

For questions regarding the updated Independent Contractor procedure, please contact either Kathryn Weeks, Associate Director, TUC Human Resources, or Dan Martin, TUC Controller. Both have been copied on this email.

Thank you for your cooperation and understanding.

 

Sincerely,
Grace Slavik, Associate Director, Post Award