Milwaukee Area Technical College
Independent Contractor Review Checklist

In recent years, additional clarification of the proper characterization of workers as independent contractors or employees has been provided as a result of the increased scrutiny by the Internal Revenue Service and other governmental agencies (both state and federal) with respect to whether individuals or entities are properly characterized as independent contractors or employees. This checklist is one aspect of MATC's response to such clarification as it strives to make proper internal characterizations of an individual or firm as an independent contractor or employee. Your completion of this checklist will help keep MATC in compliance with tax and employment laws, rules, and regulations.

Name of Proposed Independent Contractor: _________________________________

Proposed Task:_______________________    Initiating Dept.:____________________

Initiator Completing by: _______________________________     Date: _______________
Budget Manager:______________________________________    Date: _______________

Result: Independent Contractor           Further Review Required          Employee

Counsel: _______________________________________________ Date _______________

Special Circumstances

     If the proposed independent contractor is a current MATC employee or an MATC student, or if the proposed project would involve bargaining unit work, the Supervisor should consider the proposed independent contractor an employee regardless of the total/below.

Extent of Control Over Independent Contractor
One of the most important factors in determining whether an individual or entity is an employee or an independent contractor is whether the hiring party has a significant degree of control over that individual or entity. The greater the degree of control, the more likely that employee classification is appropriate.
1. Will the proposed independent contractor be supervised in the day-to-day performance of its tasks? Yes No
2. Will the proposed independent contractor be trained by MATC? Yes No
3. Will MATC mandate that the subject tasks (or a portion thereof) be performed by a particular individual? Yes No
4. Will MATC require the proposed independent contractor to complete certain components of the contemplated task before others? Yes No
5. Will MATC require the proposed independent contractor to make or file periodic progress reports? Yes No
Time Required of Independent Contractor
Generally speaking, the greater demand MATC places on an individual's or an entity's time, the greater the likelihood that employee classification is appropriate.
1. Will the project require over one-third (1/3) of the proposed independent contractor's time? Yes No
2. Will the project require over two-thirds (2/3) of the proposed independent contractor's time? Yes No
3. Is MATC expected to retain the proposed independent contractor for more than two (2) weeks? Yes No
4. Is MATC expected to retain the proposed independent contractor for more than three (3) months? Yes No
5. Will the proposed independent contractor be paid by the hour, day, week, or month? Yes No
6. Will proposed independent contractor be working only for MATC during the contemplated project? Yes No

Established Independent Contractor
The propriety of a classification as independent contractor may often turn on whether or not the individual or firm has an established business. For this reason, not only are your answers to the following questions important, but so too is the follow-up related to "building the file" with advertisements, business cards, and other evidence of the established nature of the individual or firm's business.
1. Does the proposed independent contractor maintain its own place of business? (For purposes of this question, please disregard an "office" maintained at the proposed independent contractor's personal residence) Yes No
2. Does the proposed independent contractor make its services available to the general public? (e.g., Yellow Pages ad, business cards, newspaper ads, etc.) Yes No
3. If the proposed independent contractor will employ its own workers on the project, will the proposed independent contractor obtain worker's compensation insurance and pay employment taxes for such workers? Yes No

Independence of Independent Contractor
The greater the extent to which an individual or firm will rely on MATC in the performance of its tasks, the greater the likelihood that employee classification is appropriate.
1. Will MATC supervise any of the proposed independent contractor's assistants? Yes No
2. Will MATC provide or hire assistants for the proposed independent contractor? Yes No
3. Will MATC be responsible for any of the proposed independent contractor's business expenses? Yes No
4. Will MATC be responsible for any of the proposed independent contractor's traveling expenses? Yes No
5. Will MATC be responsible for providing the proposed independent contractor with any of the tools and materials that the project requires? Yes No
6. Will MATC be responsible for the maintenance of any such tools or materials? Yes No
7. Has the proposed independent contractor made relatively little or no investment in its business? Yes No

Nature of Agreement With Independent Contractor
The language of an independent contractor agreement can have a significant impact on the proper characterization of the proposed independent contractor. If a nonstandard agreement is to be used, it must be approved by MATC General Counsel.
1. Will the proposed independent contractor enter into an approved written independent contractor agreement with MATC? Yes No

Risk Assumed by Independent Contractor
Independent contractors characteristically face some degree of risk -- their profits will depend on their efficiency or they may bear the burden of the failure of a certain contingency to occur. The absence of any such risks is indicative of employee status.
1.Will the proposed independent contractor be guaranteed a certain level of profit on the contemplated project? Yes No
2.Will both MATC and the proposed independent contractor be free from any restrictions on, or penalties related to, their ability to terminate the agreement? Yes No

Scoring

Section
Extent of Control Over Independent Contractor
Time Required of Independent Contractor
Established Independent Contractor
Independence of Independent Contractor
Nature of Agreement With Independent Contractor
Risk Assumed by Independent Contractor 		No. of "yes" answers ______
No. of "yes" answers ______
No. of "no" answers ______
No. of "yes" answers ______
No. of "no" answers ______
No. of "yes" answers ______
TOTAL ______

RESULT

0 - 6 Supervisor may forward Independent Contractor packet (Checklist, Contract, W9 form, other) to Procurement for approval
7 - 15 Further review is required by MATC General Counsel before supervisor may forward Independent Contractor packet to Procurement for approval (NOTE: If the proposed vendor/contractor is a full- or part-time MATC employee, s/he should be treated as an employee. Therefore, no MATC General Counsel review is required.)
16 Because evaluation points to an employment relationship, supervisor should enter proposed independent contractor into employment process in Human Resources or complete a new checklist for a different vendor/contractor.