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Employee vs. Independent Contractor

Each service provider ("worker") must be properly classified as an employee or independent contractor in accordance with federal and state tax and employment laws. Departments that engage service providers must submit the required documentation for determination of each service provider's status before any services are performed or payment requests are processed.

All individuals who perform services for the university are presumed to be employees unless the relationship satisfies Internal Revenue Service (IRS) and related common law standards for independent contractor status. The evaluation must be based upon IRS and related standards and not upon administrative ease, budget constraints or funding guidelines.

The payment difference between these two business relationships is that employees are paid through payroll and the University must withhold income and employment taxes, while an independent contractor is paid via the Business Service Center generally without any tax withholding. The Employee Classification Policy #2.2.28 outlines the University's policy and procedures related to worker classification and payments.

Completing the Necessary Forms

Effective for services beginning on or after January 1, 2014, all individuals providing services in a temporary capacity, with the few exceptions approved through the Independent Contractor/Employee Administrative Application, will be hired as employees of the University.  This requirement only applies to individuals who are paid directly from Creighton University for providing service in a temporary status.  This requirement does not apply to individuals providing service to Creighton University through a company in which the University has a contract for services.  For individuals hired in a non-temporary status, normal hiring procedures should be followed.  To assure individuals are paid promptly and in accordance with IRS regulations, the following will be required:

1.  Temporary Non-Benefit Eligible Employment: A standard contract or letter must be approved and signed by both parties prior to beginning work.

Checklist for Employment

Contracts/Letter Templates: 

Temporary Special Faculty Employment Agreementfileadmin/user/GeneralCounsel/docs/Temporary_Special_Faculty_Employment_Agreement.docx
Temporary Non-Faculty Employment Arrangement - only used for temporary employment outside the hiring exemption process. 
Temporary Mentor Employment Agreement

2.  To Determine whether Employee or Independent Contractor: An independent contractor can only be engaged upon completion and approval of the Independent Contractor/Employee Administrative Application

3.  Certain exceptions will be allowed without Human Resources review as follows:

A Temporary One-Time Independent Contractor Agreement  is needed for the following approved exceptions: 

Honorariums/Guest Speaker
Proctors
Preceptor payments paid to a company
Entertainers
Announcers

No contract is needed for the following approved exceptions:

Athletic Officials
Standardized Patient Stipends
Research Participant Stipends
TRIO program participants
Dissertation Team Member Stipends

Approval Process

Human Resources will make a determination on whether a service provider is an independent contractor or employee and inform the department via e-mail communication. 

If the worker is approved as an independent contractor, the department should complete the Independent Contractor Agreement template and follow all attached instructions. 

If the worker is not approved as an independent contractor, then the department should proceed to hire the individual as an employee.  Please log-in to the HR Intranet and view the Manager Toolbox for more information on hiring a new employee.  New hire paperwork can be found here

Training

Additional resources are located in the Manager's Toolbox under Resources