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Employees and Independent Contractors
Understanding the Process
In some cases, The University of Texas at Austin uses individual suppliers—such as guest speakers, performers, research study participants, and independent professionals—to meet short-term or specialized needs. The following guidance outlines how to process payments to individuals who are not regular University employees, including when and how to use the Employee/Independent Contractor Classification Checklist (EICCC).
Before contracting with an individual, you must determine whether they should be paid through payroll (as an employee) or through accounting (as an independent contractor). The EICCC helps make this determination. It must be completed before any work begins and must accompany all voucher support documents for qualifying payments.
The EICCC must be completed:
- Before issuing a purchase order, contract, or exempt services form
- At the start of each calendar and fiscal year (i.e., every January and September)
- For every new payment relationship involving individuals, sole proprietors, or single-member LLCs
This ensures compliance with TRS retirement rules and IRS classification standards.
Some payments to individuals do not require an EICCC, including:
- Musical performers paid via PO or contract (use object code 1341)
- Licensed professionals (CPAs, attorneys, etc.) paid via PO or contract (object code 1341)
- Research study participants (object code 1340)
- Non-student trainees attending a workshop or conference (object code 1340)
- Incentive payments for grant-funded training or teacher certification (object code 1340)
- Royalty recipients paid via VP2 or VP3 (object codes 1690 or 1691)
- Cash prizes and scholarships paid through FRMS (SS1)
Former UT employees may only be paid as independent contractors if:
- They are not a TRS retiree
- They have not received a paycheck in the current calendar year
- They are doing work not previously performed as an employee
All three conditions must be met to process payment as a contractor.
Policies / Handbook of Business Procedures
All payments to individuals must comply with UT’s financial policies and object coding standards. Reference the HBP for detailed rules on vouchers, object codes, and exemption categories.
Independent Contractor Policies
Review the HBP for guidance on exempt services, POs, contracts, and payment object codes.
Voucher Processing
Follow University guidance for submitting vouchers and required documentation.
EICCC Guidelines
Learn when and how to complete the Employee/Independent Contractor Classification Checklist.
Existing Employee Training
Step-by-step training on how to determine classification and complete the checklist.
How to correctly classify and pay copyright/patent royalties and cash prizes.
Guidance on using appropriate forms and object codes for human subject payments.
Understand the correct object codes for different types of individual payments.
Training on using the ESA form for paying non-employee individuals.
I Want to...
Employee Resources
Quick link to EICCC Form & Instructions
Quick link to Exempt Services Authorization Form
Quick link to FRMS SS1 Portal
Quick link to Payment Object Code Lookup
Quick link to Voucher Processing Help
Vendor Portal
Access the Vendor Portal for forms, contact information, and process support.
How Can We Help?
EICCC Support
Get help understanding when the checklist is required.
Training Payments Help
Support for training-related incentive or non-service payments.
FRMS System Questions
Assistance using FRMS to process SS1s.
Contractor Payment Guidelines
Help determining the correct object code and documentation.
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Existing Employee Events
Upcoming Employee Opportunities
Upcoming Bid Opportunities
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Upcoming Bid Opportunities
View upcoming contracts relevant to individual services.
Upcoming Bid Opportunities
Stay informed on future bidding timelines.
Original Content
It is expected that The University of Texas at Austin activities will be carried out to the maximum extent possible by using the services of regular and temporary employees. However, independent contractors may be used when the necessary services cannot be provided adequately by regular or temporary employees within the scope of their employment or in emergency temporary circumstances.
Some tax reportable payments to individuals will not require an EICCC. Examples include:
Independent Contractors
- Musical performers - Authorized with a purchase order or contract, to be paid with VP1 or VP2. Use object code 1341.
- Licensed professional individuals, such as CPAs, MDs, attorneys, architects, plumbers, electricians and others licensed by state boards.
Individuals Participating in Research Studies
- Research Study Participants - These payments are typically made through cash advances, Tango, Amazon Mechanical Turk, etc. Use object code 1340.
Individuals Receiving In-Person Training or Training Incentives
- Non-student trainees that do not provide services to the university - Authorized with an Exempt Services Authorization Form as a Workshop/Conference Attendee with a listing of all trainees eligible for the training payment. Use object code 1340.
- Individuals receiving incentive payments funded by grants or individuals completing Teacher Certification. Use object code 1340.
Royalty Recipients
- Patent or copyright royalty recipients - Authorized with a contract to be paid with VP2 or VP3. Use object code 1690 for copyrights, and 1691 for patents.
FRMS System Payments
- Cash prize winners - Authorized with a FRMS SS1 cash prize payment.
- Scholarship recipients - Authorized with a FRMS SS1 scholarship/fellowship payment.
Relocation Allowances
- Authorized by offer letter to the new employee, and requires collection of I-9 from the new hire. Pay with a VP2 and use object code 1280.
The Employee / Independent Contractor Classification Checklist (EICCC) determines if a payment will be classified and paid as an employee payment through payroll or as a contractor payment through accounting.
An EICCC is required to accompany the voucher support for any contractor payments issued for services performed by an individual, sole proprietor, or single member LLC owned by an individual.
The EICCC must be prepared before any work begins and before issuing a purchase order, executing a business contract, or completing an exempt services authorization form.
EICCC Completion Frequency
A new EICCC must be completed with the beginning of each calendar year AND each new fiscal year (i.e., in January and September, or whenever the first payment occurs at the beginning of each period). This is necessary so that TRS retirement and employment information is up to date and accurate on the EICCC.
Employees Classified as Independent Contractors
An employee may be classified as an Independent Contractor if they are a U.S. citizen or U.S. Legal Permanent Resident (Green Card holder) in either of the following situations:
- If the individual is providing a musical performance
- If the individual is providing services as a participant in a research study
Former UT Employees
If an individual is a former UT employee that has worked within the last 12 months, the EICCC must still be completed to determine how to classify the payment. There are exceptions available to pay the former employee as a contractor if the individual is:
- Not a TRS retiree
- Did not receive a paycheck in the current calendar year
- Is performing work they did not previously do as one of their employee duties
All three of these conditions must be met to grant independent contractor status for the work done by the individual.