Proposal Submission Guide

 

NEW -  Important Information for Investigators with International Collaborations

Consultants

What is the difference between an employee and a consultant/independent contractor?

The distinction between an independent contractor and employee rests upon the degree of control or right to control that the PI/PD exercises over the contractor’s physical conduct in the performance of the work or duties involved. 

If the PI/PD has NO RIGHT to control the way the result is produced, the agent is called an independent contractor.  If the PI/PD HAS THE RIGHT to control the agent’s physical conduct in the performance of the work, he or she is an employee.

The essential analysis is whether the PI/PD has the right, even though they may not wish to exercise that right, to control HOW the tasks are to be performed. 

What is “The Common Law Test”?

The Research Foundation for SUNY reviews all issues concerning the classification of Employee or Independent Contractor in accordance with the rules and regulations of the Internal Revenue Service.

The Office of Grants Management provides an Employee or Independent Contractor Test, also referred to as “The Common Law Test.”   This questionnaire gives some guidance in the determination of the employee’s or the independent contractor’s nature of work.  If you need assistance in making this determination, please contact Stephanie Ammann, Manager, Sponsored Project Expenditures, Office of Grants Management, 632-9071, or e-mail, stephanie.ammann@stonybrook.edu

The federal government uses these 20 questions in analyzing the nature of the working arrangements set forth between the employer and the employee or independent contractor.

What can happen if an independent contractor is misclassified?

If the employer, The Research Foundation for SUNY, unintentionally fails to withhold income taxes for the independent contractor who should have been classified as an employee, the employer’s liability for those taxes will be determined along with penalties.

If someone, or an entity, is misclassified as an independent contractor, charges will be moved from the independent contractor category to salary & wage category on the grant; the grant will be charged for the fringe benefit rate relating to the salary & wages; and The Research Foundation, and in turn, the principal investigator/project director (PI/PD), will be responsible for any penalties resulting from misclassification.

How will a misclassification be detected?

  • IRS or NYS income tax audit
  • Individual applies for Unemployment
  • Individual applies for Disability or Worker’s Compensation
  • Individual completes and submits form SS-8 to IRS
  • Research Foundation Internal Audit
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