Employee / Independent Contractor Classification

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.