Independent Contractor Defined:
An independent contractor is a self-employed individual or business that provides goods or services to the University under a contract and/or official UC Berkeley Purchase Order. Independent contractors are responsible for their own taxes and benefits. The University provides the independent contractor with a contract that outlines the terms of the work to be performed, including the scope, milestones, deliverables, deadlines, payment terms, and other relevant details. Contracts must be processed through Supply Chain Management on BearBuy prior to work beginning or it will be considered an unauthorized purchase. UC Berkeley Faculty and Employees do not have authorization to sign contracts for services to be supplied to the University or begin services before a purchase order has been established. Please contact firstname.lastname@example.org for service invoices generated without a purchase order (PO).
Important: Starting January 1, 2020, workers will be considered employees unless proven otherwise. Visit AB 5 – Employment Status(link is external) to learn how it impacts you.
Additionally, Independent Contractors typically have the following characteristics as defined by the Internal Revenue Service (IRS), California laws, and/or UC policy:
- Have no affiliation with the University;
- Have multiple concurrent clients,
- Advertise their services online or in publications; work on separate/distinct projects
- Have invested in various business-related expenses;
- Are engaged by the University to perform specific functions or tasks (deliverables);
- Perform work outlined in a written contract;
- Are not given instruction on when, where, or how to perform the work in order to produce a deliverable;
- Do NOT receive training, orientation, or supervision from the University;
- Use their own equipment and supplies to perform contracted work;
- Are “paid per job”;
- Will not receive employee benefits or supervise University employees;
- Do not follow the University’s scheduled hours of work.
Consult with your Buyer for any services over $99,999.99 as they may require competition by law.
Examples of Independent Contractor services:
- Business coaches and consultants
- Data analysts and statisticians
- Event planners and coordinators
- Freelance writers, editors, and content creators
- Graphic designers and illustrators
- Interpreters and translators
- Photographers and videographers
- Trainers and fitness instructors
- Web developers and programmers
How to hire an Independent Contractor:
- Use the following form in BearBUY: Services and Non-Tangible Items
- The department should attach the following required PO documents to the form as directed in BearBUY:
- Required documents from the DEPARTMENT:
- Proof of Price Reasonableness & Source Justification
- Classification Worksheet for Federal Tax Purposes Policy & Form(link is external). (The form, “Exhibit C,” can be found on pages 21-23 of the PDF)
- Statement of Work
- Required documents from the SUPPLIER:
- Conflict of Interest (if applicable)
- Supplier’s Rates/Quote Sheet
- Other Considerations:
- Services performed on UC Property: Determine the number of services that will be performed by the Supplier on campus.
- See Special Considerations for additional potental issues.
- The Buyer will use the above documentation to create a Services Agreement, which will be signed by the Buyer and the Independent Contractor.
- Required documents from the DEPARTMENT:
For more information, see Finance Bulletin: BFB-BUS-43 Purchases of Goods and Services; Supply Chain Management
Procurement policy violations
Individuals who violate policy may be subject to disciplinary action including written warnings, mandatory training, loss of purchasing authority, probation, termination, and criminal prosecution.
Examples of purchases that violate policy regardless of dollar level that could be fraudulent transactions:
- Are made by non-authorized employees
- Use unauthorized buying methods i.e. a valid Purchase Order or BluCard is not provided to the supplier at the time of purchase
- Exceed the individuals authorization
- Consist of restricted items
- Are for personal use or benefit
- Violate policy on employee-vendor relationships(link is external)
- Involve signing an agreement that commits funds for purchase
Unauthorized purchases – After the Fact Justification