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MSUE Administrative Handbook: Human Resources
  
SUBJECT: EMPLOYEE/CONTRACTOR
 
POLICY: It is important for MSUE employees to understand the distinction between an employee and a contractor.
 
APPLIES TO: All MSUE employees.
 
PROVISIONS/RESTRICTIONS:
 
  1. The difference between an employee and a contractor is the amount of control exercised by the individual/organization retaining the employee/contractor.

  2. The Employee/Contractor Checklist is applied to a situation to determine the status of an individual as an employee or contractor.

  3. If the application of the tests indicate substantial control, the individual is likely an employee; if the application of the tests indicate substantial independence, the individual is likely a contractor.

  4. Considerable liability can accrue to an individual and/or an organization which mistakes an employee for a contractor.  If an employee, taxes, social security, workers’/unemployment compensation are considerations.  Substantial financial penalties can accrue if these items are not addressed for an employee.

  5. If there is a question whether an individual is an employee or a  contractor, it would be better to treat a contractor as an employee rather than an employee as a contractor.

  6. Under no circumstances should an MSUE county office enter into either an employment or contractor arrangement on its own. Either MSU, the county or some other entity should assume the employer responsibility.
 
PROCEDURES:
 
Questions can be directed to the ANR Human Resources Office.  NOTE: This policy is under review and questions may be addressed to MSUE Human Resources.
 
DATE:    April 2009