5.6.2 Independent ContractorsCertain individuals who operate their own businesses
and who perform work for a location may qualify for the classification
as independent contractors. Independent contractors should have a
written contract (see the Independent Contractor Agreement) and must have a current Form W-9 on file before any
payment can be made for their services. Each location reports the
amounts paid to independent contractors to the taxing authorities on an
IRS Form 1099 and to the California Employment Development Department.
See New Hire Reporting.
Correctly classifying a worker as an independent contractor is
critically important; contact the Human Resources Department for
guidance. Significant penalties are imposed by both federal and state
agencies if a location makes an improper classification.An independent contractor relationship exists when the location:
Does not control the details of the job
Does not furnish tools or materials; the one doing the work furnishes these items
Does not control working hours, except for setting contractual deadlines and, when necessary, providing access to the workplace
Makes no deductions for unemployment, disability, taxes, and Social Security
The person doing the work:
Has particular skills and expertise beyond the knowledge of the client
Has a regular business and/or special license and performs services for many clients
Pays self-employment taxes and carries applicable and required insurance
Employs supporting personnel, when required
See Memorandum of 12/2013 Re Independent Contractor Definition (HR intranet; username and password required) and Memorandum of 12/2013 Re Flat Rate/Piece Rate Compensation (HR
intranet; username and password required).