Independent Contractors & Honoraria

The source guidance states that the IRS considers all workers to be employees and only exceptions may be paid as independent contractors.

The 20 Factors of the Common Law Test assist in determining whether a relationship or evidence of control/right to control (behavioral and financial) exists between the payer and worker. Under IRS rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done, even if freedom of action is granted.

Download the 20 Factors of the Common Law Test (PDF).

Review note: The source’s 20-factor wording is retained for HR review. Current IRS guidance organizes evidence under behavioral control, financial control, and the type of relationship.

• Determines place and sequence of work.
• Is not trained (by the University) for the job.
• Possesses special skills or training.
• Provides a service not related to payer’s normal business activities.
• Has the option to delegate work to others (not University employees).
• Employs own assistants.
• Works by the job.
• Sets own work hours.
• Generally works off-site.
• Can set own schedule (work flow).
• Files reports when job ends; interim reports possible (does not submit regular reports).
• Pays own business and travel expenses; part of job costs.
• Furnishes own tools and equipment.
• Has significant investment in facilities used.
• Can make a profit or suffer a loss if the project is not completed.
• Works for several companies at one time.
• Makes services available to the public.
• Cannot be fired if results satisfy the contract.
• Must complete job according to contract specifications.

• Maintains a continuing relationship with the employer.
• Does the work personally (does not delegate work to non-employees).
• Is required to comply with instructions.
• Usually works full-time for one employer.
• Is subject to dismissal.
• Can quit without incurring a liability.
• Is reimbursed for expenses.
• Is trained by the employer (or supervised).
• Provides services that are a key aspect of regular business (University) activities.

An individual who is already a Stony Brook University (State or Research Foundation) or New York State employee may not be paid as an independent contractor. Employees performing a task different from regular duties and after normal work hours are eligible for overtime or Extra Service/Dual Employment pay. An individual providing training or instructional services may be considered an employee.

A worker may always be classified as an employee even if the worker meets independent contractor criteria. It is illegal to knowingly classify an employee as an IC to avoid Affirmative Action recruitment efforts and/or employment taxes, fringe benefits, and similar obligations. The IRS imposes fines and penalties for misclassification. Liability may include:

• Employer’s share of Social Security and Medicare taxes.
• Employee’s share of Social Security and Medicare taxes.
• Unemployment taxes.
• Interest on money found to be owed.
• Civil fines.
• If found to be a criminal matter, possible imprisonment.

Contracting department: Retain an IC for a specific service for which there are no University employees on payroll to perform. Send all requests to HR at least one month before work begins. Review the checklist for required documentation. Ensure HR approval before work begins and compliance with IRS worker-classification guidelines.

• All State-funded IC payments over $2,500.00 require justification for payee selection and a statement noting the vendor’s fair and reasonableness of price.
• All IC payments over $20,000.00 require a formal contract agreement.
• Multiple payments to an IC require an encumbered purchase order (PO) to secure funds.

Tax-reporting statement retained from the source for review: When issuing payment to an IC, the University must provide the individual with Form 1099-MISC (Miscellaneous Income) when payment exceeds $600 for the year.

HR review required before publication: This form/threshold statement may be outdated. Current IRS information on Form 1099-NEC and 1099 instructions differ. Confirm the applicable tax year and University procedures with HR before relying on this statement.

Independent contractor: Report all income earned and pay applicable federal, state, city, and self-employment taxes.

The source also labels its IRS Form W-9 link as “NYS Substitute Form W-9 (AC 3237-S).” Both destinations are retained above; review that labeling before publication.

IC/Honoraria Payment Checklist · IC/Honoraria Payment Form (PDF) · Submit any SBF-funded IC form.

The source describes these scenarios. Seek HR guidance for situations it does not address.

Former agency: Stony Brook → Hiring agency: Stony Brook; less than two years since leaving. Former State employees are prohibited from appearing before their former agency for two years from their termination date or last date on the payroll.

Stony Brook → Stony Brook; greater than two years since leaving. Must meet the IRS’ Guidelines for an Independent Contractor. Participants in the Stony Brook Voluntary Separation Program may have limitations and should contact hrs_benefits@stonybrook.edu.

Not Stony Brook → Stony Brook; less than two years since leaving. Must meet the IRS’ Guidelines for an Independent Contractor. Voluntary Separation Program participants may have limitations and should contact hrs_benefits@stonybrook.edu.

Stony Brook → Research Foundation; less than two years since leaving. The source states there is no law, rule, or regulation prohibiting a former SUNY employee from joining the Research Foundation as an employee or working for it as an IC, provided the IRS’ Guidelines for an Independent Contractor are met. This includes Graduate/Teaching Assistants who worked as State employees. Voluntary Separation Program participants may have limitations and should contact hrs_benefits@stonybrook.edu.

Current SUNY employee (not Stony Brook) → Stony Brook. Current SUNY employees cannot be hired as an IC by another SUNY agency. They may be able to be paid through the Extra Service process.

Review note: These former-employee and separation-program statements are retained from the source for HR review; they have not been reinterpreted.

This IC guidance is for paying a fee for service. If only reimbursing travel expenses, use Procurement’s Travel Voucher & Instructions.

The source contains these distinct destinations, all retained:

• Travel Voucher & Instructions — travel forms section
• Travel Voucher & Instructions — Travel and Card Programs
• Travel Voucher & Instructions — Procurement form

• Self-Employed Individuals Tax Center
• Independent Contractor Defined
• Independent Contractor or Employee?
• Employee (Common-Law) Defined
• Understanding Employment Taxes

Email hrs_independent_contractors@stonybrook.edu for assistance. Stony Brook Voluntary Separation Program participants with questions about limitations should contact hrs_benefits@stonybrook.edu.