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Service Provider Policy

Introduction

This policy has been developed by The New School (“University”) to ensure the proper classification of Service Providers, including Independent Contractors and Vendors, prior to engaging their services. An “individual” who is paid to provide services to The New School must be hired as an employee unless the engagement meets the requirements for a Service Provider as outlined in the Policy below.

Purpose

Under New York State Department of Labor (DOL) and Federal law, the University is required to meet a number of obligations with respect to the treatment of employees, including wage and hour requirements, payroll tax withholdings, and provision of workers compensation and unemployment benefits. Misclassifying individuals as Service Providers instead of employees may cause the University to fail to meet its legal obligations and give rise to significant financial liabilities, including taxes and related penalties, criminal sanctions, and civil liability. Please refer to the DOL Fair Labor Standards Act and Internal Revenue Service (IRS) guidelines for additional information.

All proposed Service Provider engagements must be reviewed and approved BEFORE engaging the individual, to ensure proper classification.

Scope

This Policy applies to all University students, employees (current and previous), board members, and all individuals engaged directly to perform any service for the University, regardless of the source of funds.

This Policy does not apply when the University is contracting with a third-party entity (e.g., managed service provider, temp agency, payrolling service, IT staffing firm) to obtain personnel who are classified by those firms as employees or contractors to perform services.

Definitions

Conflict of Interest: The University Policy on Conflicts of Interest “prohibits business or financial relationships between the University and its trustees, officers, deans, key persons and/or their family members, and key vendors.” Service Providers must be free of any conflicts or have approval from the Office of Finance & Business to perform work for the University.

Employee: An individual who works for the University under an express or implied contract of hire that gives the University the right to dictate the employee's work duties. Under this classification the University controls the work to be performed, hours worked, as well as where and when such work will be performed. Employees are provided with the facilities and tools necessary to perform their job and are not at risk for profit or loss based on job performance.

At times, an Employee may also act as a Service Provider provided they have an established business and tax ID number that is not their Social Security Number (i.e. EIN). Those who do not have a separate business must wait until the calendar year following their separation from employment to work as a Service Provider. For purposes of this policy, the term “Employee(s)” encompasses the below:

  • Current Employee: An individual who has an active position and is currently on University payroll (receives a W-2).
  • Previous Employee: An individual who was previously on University payroll (received or will receive a W-2) within the same calendar year, including New School retirees.

Honorarium/Guest Speaker: An individual engaged by the University to lecture, present, or otherwise speak on a subject about which they are considered an expert for a limited duration (typically 1-3 days). Such individuals include speakers/presenters at conferences, symposiums or lecture/speaker series, and/or guest speakers in classes or other training events. These individuals receive a nominal honorarium payment of $2,000 or less. See Honorarium Policy for additional details. Individuals engaged for longer durations of time or for negotiated rates of pay are instead considered Service Providers under this Policy.

Service Provider: Service Providers are in an independent trade, business, or profession that offer their services to the general public and are free from the University’s control or direction when providing such services. With the exception of Employees performing services within the same calendar year of employment, Service Providers are not employees of the University and are not eligible for a University ID badge (NewCard). Service Providers may be provided with a temporary University email address and limited access to select systems as outlined below. For purposes of this Policy, Service Providers include Independent Contractors and Vendors (both defined below). See below Policy for specific eligibility criteria. This Policy does not apply to Fellows or other Service Provider types.

  • Independent Contractor: A type of Service Provider. Specifically, an Independent Contractor (“IC” or “contractor”) is an individual, sole proprietor, single-member LLC, partnership, or LLC-P that is engaged to perform a non-routine task or service outside the University’s usual course of business. ICs are not eligible for reimbursement of business and travel expenses, but may include them in the total fee in their contract with the University. All amounts paid to an IC will be reported on IRS Form 1099 if the total exceeds the required IRS reporting threshold.
  • Vendor: A type of Service Provider. Specifically, a Vendor for purposes of this Policy is a corporation, LLC-C, or LLC-S that is engaged to perform a non-routine task or service outside the University’s usual course of business. Vendors may be eligible for reimbursement of business and travel expenses when pre-defined in their contract with the University. Payments to a Vendor do not require IRS reporting.

Responsibilities

Contract Request Approver: These individuals are typically budget managers and departmental administrators who are authorized by leadership to approve contract requests for their department. Contract Request Approvers must authorize any work to be performed before the Hiring Manager engages in the Service Provider determination process, as well as approve all Service Provider contract requests for their areas.

Hiring Manager: The hiring manager or local representative is responsible for initiating the Employee or Service Provider Determination Form. They will work with Human Resources to create a job posting if the role is determined to be that of an Employee, or will work with Finance to engage an eligible Service Provider. Most areas of the University have specified individuals who engage and manage the work of Service Providers.

Human Resources (“HR”): HR Shared Services is responsible for reviewing the Employee or Service Provider Determination Form and determining whether the role is that of an Employee or Service Provider. If HR determines that the role is that of an Employee, they will work with the Hiring Manager to create a job posting.

Information Security & Privacy Office (“ISPO”): ISPO reviews all contracts where a Service Provider is to be provided with a temporary University email address and/or limited access to select systems if the request involves personally-identifiable or sensitive information, critical or sensitive business information, and/or critical academic information.

Office of Finance & Business: If a role is determined to be a Service Provider, Procurement Services will offer existing approved options, if available, or evaluate a proposed new provider to determine whether they should be engaged as a Vendor or an IC and initiate the appropriate contract. They will also review any reported conflicts of interest.

Service Provider: All Service Providers, including IC and Vendors, must be eligible to work as a Service Provider for the University in accordance with the below Policy. They must communicate truthfully to the Hiring Manager about the nature of their business and services, must submit a copy of their W-9 or W-8 BEN and FNIC, and complete other documentation as requested such as a Supplier Registration Form and contract.

Policy

It is expected that University activities will be carried out to the maximum extent possible by ongoing or temporary Employees. Service Providers, including IC and Vendors, may be used when necessary services cannot be provided adequately by ongoing or temporary Employees within the scope of their University employment.

Service Providers may be engaged by the University to complete work if the following criteria are met:

  1. The work is not part of our core or regular business of educating students and conducting research
  2. The work will occur over a period of six (6) months or less
  3. The work to be completed is not a full-time position, defined as 35 hours or more per week
  4. The work is performed remotely or without a prescribed location, except where approved for short-term research, guest speakers, presenters, videography, photography, etc.
  5. No instruction or training is provided by the University regarding how to complete the work
  6. The Service Provider is not required to work exclusively with the University
  7. The University will not directly supervise the Service Provider
  8. The work does not include supervision of students or University employees
  9. There are no prescribed hours or schedule for completion of the work, except as similarly defined in #4
  10. The work will not be completed with University equipment or supplies
  11. The Service Provider will not receive a University ID badge (NewCard)
  12. The Service Provider offers their services to the general public as a trade or business and/or advertises their services to the public
  13. The Service Provider has invested in facilities or equipment with which to complete the work
  14. The Service Provider is not an Employee within the same calendar year of their employment unless they have an established business and separate tax ID number that is not their SSN
  15. The Service Provider is not a current board member
  16. The Service Provider is free of any Conflicts of Interest or has approval from the Office of Finance & Business

Service Providers are not employees of the University. As such they are not eligible for University benefit plans, are not covered by the University’s workers compensation program, and are not eligible for unemployment benefits following the contract performance period.

A Service Provider’s preference is not relevant to the classification determination, nor is that of the local college or department wishing to engage the Service Provider.

Procedure

See Service Provider Engagement Procedure for details.

Additional Information

Responsible University Officials: CFO and VP of Human Resources

Responsible Office: Procurement Services

Contact Information: Please contact HR Help with any questions related to hiring someone to perform work at The New School. Contact iccompliance@newschool.edu for assistance only after your role has been confirmed to be that of a Service Provider.

Forms

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