Securing and Paying for Consultant and Independent Contractor Services

Effective Date: January 1, 1995

How to Use this Manual

There are two basic steps involved in securing and paying for consultant and independent contractor services. The first step is to determine the status of the service provider, and the second step is to initiate the appropriate paperwork based on the status determined in step one.

The flow chart illustrates this process.

STEP ONE:

DETERMINE THE STATUS OF THE SERVICE PROVIDER from one of the alternatives below (Caution: Do not assume the provider is an independent contractor. Please review Section I.)

The process used to secure and pay for services will vary depending on the status of the service provider. For example, employees are distinguished from independent contractors since employees are paid through the payroll system and independent contractors are not. Once an independent contractor status is determined, independent contractors would generally be paid through the purchasing system. However, an alternative payment process is described in Section IV for external independent contractors whose primary business is not consulting, and whose fee is less than $5,000.

Following is a list of various types of service providers:

1. Employee: Vanderbilt faculty/staff (paid for services as part of stated annual salary)
2. Internal Consultant: Vanderbilt faculty/exempt staff (paid for services in addition to stated annual salary)
3. Independent Contractor/External Consultant,
   1. firm or individual: Primary business is providing the required service
   2. individual: Primary business is NOT consulting and anticipated fee is $5,000 or more
4. Independent Contractor/External Consultant, individual: Primary business is NOT consulting and anticipated fee is less than $5,000
5. Exceptions: See Section V of this manual for list of exceptions

STEP TWO:

INITIATE THE APPROPRIATE PAPERWORK BASED ON THE STATUS DETERMINED IN STEP ONE.