Before procuring services, first determine if the worker is an employee or an independent contractor. The attachments provided in this bulletin provide guidance in making the worker status determination and documenting the procedures used in accordance with IRS criteria. If there are no material differences in the factual circumstances that apply to a group of similarly situated workers, then agencies may make and document one worker status determination for the group of workers as a whole, rather than make an individual determination for each worker.
Attachment A - IRS guidelines for determining whether a worker is an employee or an independent contractor.
Attachment B - Employee/Independent Contractor Status Determination Worksheet to use in conjunction with Attachments A and C. This worksheet may be used “as is”, or as a template to create a determination form specific to your agency’s needs.
Note: In lieu of using this worksheet, the agency may request that the IRS determine the worker’s classification by filing IRS Form SS-8.
Attachment C - IRS Publication 963, Chapter 4, provides additional information and examples illustrating worker classifications.
When an agency determines a worker will be providing services as an independent contractor, the agency must procure the services in accordance with the State Finance Law. The agency issues payment to an independent contractor through the Central Accounting System using a New York State Voucher.
When an agency determines a worker is an employee, the agency issues payment through the New York State Payroll System.
When an agency determines a worker will be providing services as an independent contractor, and that worker is also an employee of the state, the agency must, as required by section 73(4) of the Public Officers Law, procure such services through a competitive process. The agency issues payments associated with the independent contractor work through the Central Accounting System using a New York State Voucher.