Independent contractor process

The classification of an individual worker as either an independent contractor or an employee is not a matter of choice; rather, it is determined by a set of legal criteria applied to the specific facts of the relationship between the worker and the employer. Under the law, workers who provide services generally are presumed to be employees, unless clearly established criteria are met.

The consequences of misclassifying an individual worker as an independent contractor when the individual should legally be classified as an employee can be severe, including significant financial damages and penalties, harm to RISD's reputation, and possible individual liability. Likewise, misclassification may preclude the individual from protections and benefits (e.g. Worker’s Compensation) afforded by employment and may subject the individual to additional financial responsibilities.

When engaging the services of an individual worker, the following three principal criteria must all be present to classify the individual as an independent contractor:

• Freedom from control: in general, the individual worker, and not the employer, determines the means and methods of achieving the desired result, and often the timing and location of the performance of the work, and provides and uses his or her own tools and materials

• Work outside the usual scope of the employer's business in general, the nature of the work performed is not something usually performed by the employer’s regular employees

• Independent trade, occupation, or business in general, the individual worker has an established business, offers his or her services to the general public, and has multiple clients

Independent contractor: how to set-up

To assure compliance, RISD has implemented the following process for determining whether it is appropriate to retain and pay an individual worker as an independent contractor rather than as an employee, using the following forms. The full process must be completed before the individual is formally retained and begins to perform services. 

Steps: (Completed in etrieve & Juro)

Please note: Step 1 & 2 are only mandatory if requested by Procurement or HR.  In most cases, you may start with step #3.

If you are submitting a contract request for a supplier that already has a Contractor Checklist and Verification form on file with Procurement Services and they are perforning the same type of contracted work, then new forms do not need to completed.  Steps 1&2 can be ignored and you may proceed to Step 3.  Same type of work example would be: a phtographer is completing similar photography work on a new contract.  An example of work not being that same and a new forms are required is: A graphic designer has completed  website developement in the past for RISD as a contractor, but is now looking to be contracted as a production assistant.

Please note: Step 1 & 2 are only mandatory if requested by Procurement or HR.  In most cases, you may start with step #3.

Step 1. Submit the Checklist for Determination of Independent Contractor Status to Procurement via etrieve - (Completed by the Hiring Department or Division)

Once the Procurement Department reviews the submission, you will receive email confirmation

Step 2 Independent Contractor Form invitation is completed by the Hiring Department.  Once submitted, etrieve will send a "Independent Contractor

Verification Form"  to be completed by the Proposed Individual/Contractor.

Form completed online by the Proposed Contractor and then reviewed by Procurement. The Hiring Department will receive email confirmations when

Procurement approves the form submitted by the proposed contractor.

Please note: Steps 1 & 2 can be done concurrently & etrieve will route these completed forms to Procurement Services.

After the Procurement Services Dept. has approved both of the above forms:

Step 3. Formalize the terms of the Independent Contractor Contract by requesting a contract in Juro.

Hiring Department completes the request and upon approval, Procurement will create the contract in the RISD Contract Management Tool (icertis) and coordinate signatures.

After the Contract is Executed (signed)

1.  Supplier must be set-up in Workday via a PaymentWorks invitation. (unless supplier already has a Workday SUP#)

Hiring Department submits invitation to Payment Works and the contractor completes registration.

This step may be done concurrently with the contract execution, but payment cannot be made until the contract is signed.

2.  Depending on the type of contract, payment to the supplier payment would be made via:

   1. Supplier Invoice Request (SIR) - for single payment contracts

Complete an SIR and attach the executed contract.

2. 2. Via a Purchase Order - for multiple payment contracts.

Contracts with multiple payments associated with them need to be set-up in Workday via a requisition by submitting a requisition with the executed contract attached and a PO will be created once the requisition is approved.

   Payments will be made via the Accounts Payable Process for PO-Invoices 

Please Note:

• Procurement Services may engage Human Resources for a second opinion. (Procurement Services and HR will have the final determination on the status of any proposed independent contractor)

• Determine employee status – Procurement Services will work with HR as appropriate

• RI Notice of Designation as an Independent Contractor may be required

• Individual workers who meet the designation of Independent Contractor are responsible for completing the RI Notice of Designation as Independent Contractor form when payment will exceed $5,000 and the length of service will be 30 continuous days or more.

• RISD end-users must communicate this state requirement to all contractors

Independent Contractor Exceptions

Even when an individual does not pass the test, there are still a few exceptions where the individual may be an Independent Contractor; the following are noted exceptions when they are used on a limited basis:

When hiring:

• Speakers for a fee (utilize the appearance contract template via Juro) 

• Honoraria (use the honorarium process)

• Musicians, singers, dancers, DJ’s, comedians, clowns, and other similar entertainment  (utilize the appearance contract template via Juro) 

Please note that current employees and students cannot be designated as independent contractors, if you have questions concerning this, please contact the Director of Procurement.