Personal & Professional Services
A Personal/Professional Services Contract (PSC) is used to procure personal/professional services where selection criteria include skill, knowledge, reputation, creativity of contractor, etc. Price may be a secondary factor in selection. A PSC should not be used for trade services (plumber, electrician, locksmith, etc.).
Independent Contractor vs. Employee
The Common Law Rule: An employer/employee relationship exists when the person or persons for whom the services are performed have the right to control and direct the individual who performs the services, not only as to the result to be accomplished but also as to the details and means by which that result is accomplished.
Employee: An individual subject to your direction and control who can be dismissed (Employer provides a workplace and tools, Workers’ Compensation, and carries insurance).
Independent contractor: An individual/firm who is not subject to your direction and control and who hires or dismisses own associates (Contractor provides tools and equipment, advertises, is free to choose work methods, and carries own insurance).
A former PSU employee cannot be contracted with under a PSC during the same calendar (tax) year that they were paid on payroll as an employee. A prior employee should not be contracted with to do the same, or significantly similar job, under contract as the work they performed while an employee. Due to potential tax liability to PSU and employee, a former employee must not receive a W-2 and 1099 tax reporting form within the same tax year.
A Short Form PSC MAY be used under the following circumstances:
- For services not to exceed $5,000.
- When only one payment will be made on the contract.
- When a Banner Direct Pay Invoice is used in conjunction with the contract.
- When a contract end date does not extend more than three weeks into the future.
A Long Form PSC MUST be used in the following circumstances:
- For services that exceed $5,000.
- When multiple payments will be made on the contract
- When a Purchase Order is used in conjunction with the contract.
- When a contract end date extends more than three weeks into the future.