Payroll Laws and a Clarification of Hiring Practices
- Issue Date: March 5, 1981
- Primary Contact: Director of Human Resources
- Responsible Member of Directorate: President and Director
- Responsible Office: Human Resources
A. As an employer, the Institution is
responsible for deducting the proper amount of income and Social
Security taxes from the pay of covered employees and for making
the required employer contributions for Social Security and Unemployment
Compensation. In addition, the Institution is a Federal contractor
and our Equal Employment Opportunity commitments require that
all positions which become available be posted.
II. Employer/Employee Relationship Criteria
B. All matters dealing with the hiring of employees
in the Institution must be processed through the Human Resources
Office, which is set up specifically to handle that function
and service at the Institution. Purchase Orders are not to be
used to hire employees. Questions concerning compliance with
Equal Employment Opportunity, nepotism policy, insurance protection,
tax withholding requirements, and tax contributions by the employer
are matters that the Institution, as an employer, must respond
to promptly as a matter of record.
C. Hiring practices are outlined in Hiring
Process , as well as in Institution Memoranda. Any question
or assistance in these matters should be addressed to the Human
D. If there is an immediate need for an individual
to be hired as an employee and sufficient time is not available
for the normal hiring procedure to be implemented, a waiver
should be requested by the department chair or group manager
by way of the Human Resources Office. Once approval has been
obtained from the Human Resources Office, an individual hired
on this basis may be employed on a temporary basis for not more
than three months. Further information about this waiver of
hiring practice can be obtained from your Human Resources Representative.
The criteria that are used to establish employer/employee
relationships, and several definitions, and statements about
employees and compliance with payroll laws are listed
A. Employee: The common law definition
of "employee" is anyone who performs services for you subject
to your will and control as to what shall be done and how.
B. Independent Contractor: Probably the most
frequent question of coverage under the payroll withholding
laws is whether an individual is an employee or an independent
contractor. In answering a question such as this, the payroll
tax laws refer in large part to the common-law rules for drawing
the line between "employees" and "independent contractors".
As a general rule, an independent contractor is hired to do
a specific job and is paid a fee or a lump sum at its conclusion.
People in business for themselves are not employees. For example,
doctors, lawyers, veterinarians, construction contractors and
others who follow an independent trade in which they offer their
services to the public are usually not employees.
The basic common-law test is the "right to control".
An employer/employee relationship exists if you have the right
to control both the result to be accomplished and the manner
and means by which the result is reached. Whether or not you
exercise this right is immaterial. What is decisive is that,
shown by the circumstances, you possess the right. If an individual
is free from control as to the means and methods for attaining
the results, he or she is not an employee.
C. Any further information or clarification regarding
payroll laws and hiring practices can be obtained from your
Human Resources Representative.
you require assistance in the interpretation of this procedure,
please contact your Human Resources Representative.
Last updated: May 7, 2008