Movement Strategy Center - Contractors and LLCs

Contractors & LLCs

Overview

Independent contractors are self-employed individuals hired by an employer to perform work under a contract. They are not considered employees and are therefore not subject to employment tax withholding or covered by most employment laws. However, there are legal criteria that define who can be classified as an independent contractor. Federal government agencies and some states have their own tests to determine independent contractor status.

Unsure if you should classify someone as a contractor? Use the ABC test here or contact contracts@movementstrategy.com for assistance.

Required Documentation

Contracts over $10,000, lasting longer than 6 months require:

- Contract which states the scope of work in detail including deliverables and timeline
- Resume, LinkedIn profile or business website
- W9 (Electronic versions of W-9s can be found here.)
  - For international contractors, use W-8 BEN or W-8 BEN-E.

Contracts less than $10,000 and 6 months require:

- W9 (Electronic versions of W-9s can be found here), if the payment will exceed $1,500.
  - For international contractors, use W-8 BEN or W-8 BEN-E.
All contractors will need to submit an invoice every time payment is being requested. To ensure invoices are complete and paid in a timely manner, they should include:
- Clear Payment Instructions
- Billing Period within contract period
- Details on deliverables accomplished (ex. date, time, activities)
- If the invoice spans multiple projects an itemization of charges by project area

Note: After the contract and supporting paperwork is submitted, an invoice is needed for payments. You do not need to resubmit the contract when submitting invoices.

MOUs

A memorandum of understanding, or MOU, is an agreement between two parties that isn't legally binding. MOUs are often used to outline joint ventures where no payment is involved between the parties. They can also document agreements on how funds will be utilized for joint ventures.

Refer to the MOU Template to help draft your MOU. Before being sent for signature, all MOUs must undergo review by the Compliance team.

Projects should collaborate with their Project Advisor to assess whether an MOU is the appropriate form of documentation for a project or initiative.

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