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A contract, or an agreement, is necessary Joanna. It certainly does not have to be a 25-page monster. Most of mine are 4-6 pages long, and some are done by email. But these protect you AND the contractor by outlining deliverables, timetables, fee schedules, etc. You do not need an "employment contract," and that might be what your board member is thinking about. But you do want an agreement or memorandum of understanding executed by both parties. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Wed, Mar 27, 2019 at 4:39 PM Bob Swanson <rswanso@bgsu.edu> wrote: > From a business perspective only. You contract with independent > contractors (IC) as they are an independent business and you need to > outline the work product/service expectations and the payment for whatever > those deliverables are. > > Further, you need to be concerned that you are not exercising sufficient > actual or economic control over the IC or can unduly influence their > activities or you actually have an employee and violate DOL regulations, > etc. The major problem with treating what should be an employee as an IC is > that you begin to accrue FICA taxes which are trust taxes and their payment > to the federal government can be required from any person who should have > remitted those taxes. It becomes a personal liability. > > A contract with an IC helps defend your position that they are a true IC. > > Bob Swanson, CPA > Controller > Bowling Green State University > 1851 N. Research Drive > Bowling Green, Ohio 43403 > > rswanso@bgsu.edu > w 419.372.8597 > > > > >

From a business perspective only. You contract with independent contractors (IC) as they are an independent business and you need to outline the work product/service expectations and the payment for whatever those deliverables are. Further, you need to be concerned that you are not exercising sufficient actual or economic control over the IC or can unduly influence their activities or you actually have an employee and violate DOL regulations, etc. The major problem with treating what should be an employee as an IC is that you begin to accrue FICA taxes which are trust taxes and their payment to the federal government can be required from any person who should have remitted those taxes. It becomes a personal liability. A contract with an IC helps defend your position that they are a true IC. Bob Swanson, CPA Controller Bowling Green State University 1851 N. Research Drive Bowling Green, Ohio 43403 rswanso@bgsu.edu w 419.372.8597
Original Message----- From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG> On Behalf Of Joanna Cacciola Sent: Wednesday, March 27, 2019 2:30 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG Subject: [EXTERNAL] [FUNDSVCS] Independent Contractor Contract I volunteer for a small nonprofit and we recently "hired" an independent contractor to coordinate our programs. One of our board members has argued that because this individual is contracted and not employed with benefits that a contract between the organization and the contractor is not necessary, is this true? I was under the impression that the individual and the organization would have to sign a contract that outlined the expectations of both the organization and the contractor.