If employees and independent contractors are not appropriately classified, employment taxes and corresponding federal reporting will be incorrect.
The purpose of this directive is to comply with the Internal Revenue Code (IRC) regarding proper recognition and taxation of employee wages. Compensating UF employees for work or services provided in additional to their regular job appointment is generally still considered wages subject to employment taxation. Compensating these individuals through Disbursements or by any means outside of the payroll system does not appropriately capture the income for taxation and federal reporting purposes.
All university departments.
On a case-by-case basis, relevant facts and circumstances are evaluated to determine if an individual should be compensated as an employee or an independent contractor. All information that provides evidence of the type of relationship and the degree of behavioral control, financial control and independence must be considered. No single factor is determinative.
UF academic policy requires that for all for-degree-credit courses, no matter the funding model or delivery modality, the instructor must be a UF employee. You may not use independent contractors or companies to teach or support UF for-degree-credit courses (University of Florida Policy for Hiring Independent Contractors for Academic Services).
UF issues employees a Form W-2 at the end of the year to reflect their employment income and taxes. UF issues Independent Contractors a Form 1099-MISC for applicable payments made by UF during the year. In limited circumstances (e.g. royalty income) a UF employee may receive both a Form W-2 and a Form 1099-MISC for different types of income within the the same tax year.
Behavioral control refers to facts that show whether there is a right to direct or control how the worker does the work. A worker is an employee when the business has the right to direct and control the worker. The business does not have to actually direct or control the way the work is done – as long as the employer has the right to direct and control the work. The behavioral control factors fall into the categories of:
Financial control refers to facts that show whether or not the business has the right to control the economic aspects of the worker’s job.
The financial control factors fall into the categories of:
Type of relationship refers to facts that show how the worker and business perceive their relationship to each other. The factors, for the type of relationship between two parties, generally fall into the categories of:
University of Florida Policy for Hiring Independent Contractors for Academic Services
IRS Guidance: Independent Contractor or Employee?
IRS Publication 15-A: Employer’s Supplemental Tax Guide
Tax Services: (352) 294-7266