Carnegie Mellon University

Independent Contractor Information

An independent contractor is an individual or sole proprietor who is contracted to perform work for the university utilizing their own methods, and the means by which the work is accomplished is not controlled by Carnegie Mellon University. An independent contractor is normally engaged in an established business, trade or profession. As such, an independent contractor is not an employee of Carnegie Mellon and is treated differently with respect to tax withholdings, employee benefits and payment methods.

Mistakenly classifying an employee as an independent contractor can result in significant fines and penalties. The IRS continues to seek out and impose penalties on organizations that treat employees as independent contractors and fail to withhold taxes. As a result, the IRS considers 20 factors in determining a worker's status. Meeting just one of the conditions may qualify that worker as an employee; however, the 20 factors are used as guidelines to determine whether sufficient control is present to establish an employer-employee relationship. Not every factor is applicable in every situation and the degree of importance of each factor depends on the type of work and individual facts and circumstances All relevant factors are considered in making a determination and no one factor is decisive.

Carnegie Mellon University uses an Independent Contractor Checklist [.pdf] to assist schools and departments in determining whether individuals performing services should be hired as an employee or an independent contractor. 

If you need assistance or have any questions regarding the Checklist or determination of independent contractors vs. employees, please contact Taxation directly.