If a U.S. Citizen or Permanent Resident
- Employees are engaged as an employee and paid through Payroll
- Independent Contractors are engaged as a contractor and paid through Accounts Payable
Independent Contractor Policies
Although most Northwestern activities will be carried out by regular and temporary employees, independent contractors or consultants may be used when necessary services cannot be provided by regular and temporary employees within the scope of their employment or in emergency temporary circumstance.
Determining method of payment
Two determinations must be made before engaging a person in work for which Northwestern is to pay the person: Is the person an employee or an independent contractor? Is the person a U.S. citizen or resident, or is the person a non-resident foreign national?
If a Foreign National without Permanent U.S. Residence
- Employees are engaged as an employee and paid through Payroll
- Independent Contractors are engaged as a contractor and paid through Payroll to apply the required taxation
Differentiating between employees and independent contractors
Other requirements to engage non-employee services
Engaging an independent contractor
Persons other than regular Northwestern employees may be used as contractors and paid from Northwestern funds only if all of the following conditions are met:
- Employee unavailable. The services are needed and cannot be met by using a regular employee within the scope of his or her employment.
- Selection process. A selection process has been used to secure the most qualified person available, considering the nature and extent of services required.
- Appropriate fee. The fee is appropriate considering the qualification of the person to be used, his or her normal charge, and the nature of the services to be rendered. When the fee is charged to a sponsored project, it must conform to any limitation established by the award and funding agency.
- Not already on payroll. The person has not been paid as a regular employee or temporary employee of Northwestern within the current calendar year.
- Specified single period of engagement. The arrangement will last for a specified period and it is understood that no employment arrangement or repeated/extended arrangement will result.
Engaging an employee as a consultant
Persons who are regular employees of Northwestern may be used as consultants, and Northwestern funds may be charged for their activities, only if all of the following conditions are met:
- Department employee unavailable. The services are needed and cannot be met by using a regular department employee within the scope of his or her employment.
- Selection process. A selection process has been used to secure the most qualified person available, considering the nature and extent of service required.
- Employee is outside of department. The services must be performed in a department that is not the usual department of the employee and must be an operation that is separate or remote from usual employment duties.
- Appropriate fee. The fee is appropriate considering the qualifications of the person to be used and the nature of the service to be rendered. When the fee is charged to a sponsored project, it must conform to any limitation established by that award and funding agency. The fee must be appropriate for the job being performed and set in close relation to the average rate paid by Northwestern for similar work, even if not closely related to the employee's regular pay. The Compensation Division of Human Resources should be contacted for guidance in setting fees.
- Prior review of fees. All fees are subject to provisions of the Fair Labor Standards Act, requiring among other things that premium rates be paid to non-exempt employees for overtime hours, and prior review of the Compensation Division of the Department of Human Resources.
- Honorarium. An honorarium awarded to an employee is paid using the Additional Pay Request process.