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EFFECTIVE OCTOBER 23, 2008
In January 2007, the University updated and posted its policy for Independent Contractors. By May 1, 2008 departments were advised that all independent contractors were to have the new contracts in place by September 1, 2008. We are now ready to move to the 3rd phase of implementing this policy.
Effective October 23, 2008, the ICQ Administrator will only be reviewing transactions of $5,000 or more. If the total of the payment(s) for the contract are expected to be less than $5,000.00 the manager (or appropriate signing authority) is now responsible for making the decision. The manager is still required to complete the ICQ and follow the same payment processes, however there is no requirement to get the ICQ (IC questionnaire) signed off by the ICQ Administrator or obtain and HR Approval Number.
With this change, the PROCESS, as outlined in section 6 of the Policy will be as follows:
Review the policy, the criteria listed above, and the chart in Appendices “B”, “C”, and “D” as applicable. These Appendices provide guidance on how certain specific engagements have already been characterized for purposes of this Policy.
If the relationship does not meet the criteria for an independent contractor, then an employee/employer relationship exists and you should hire this person as an employee using the appropriate Payroll and Human Resources policies and procedures and in accordance with the terms of collective agreements.
If the relationship seems to meet the independent contractor criteria, complete the ICQ form (Appendix “E”). This form must be completed by the “Account Signing Authority” (i.e., the person seeking to purchase the services) and by the Service Provider.
The information will then be evaluated by the Account Signing Authority or by the ICQ Administrator, as appropriate according to the criteria below. The ICQ need only be completed once, even if the Service Provider is engaged multiple times to provide the same kind of service. However, if the nature of the service to be provided by the same Service Provide changes, then a new ICQ must be completed and submitted to the appropriate person for evaluation.
The person wishing to purchase the services, must answer ALL questions on the ICQ form that are highlighted in orange BEFORE providing the ICQ to the Service Provider. The Service Provider must then answer the remainder of the questions.
The ICQ form is an EXCEL document with drop-down menus for each response. To complete the form: (i) fill out the orange sections, (ii) re-name and save the document, and then (iii) e-mail it to the Service Provider.
Once completed by the Service Provider, the ICQ is e-mailed back to the Account Signing Authority by the Service Provider.
The account signing authority then takes one of the following actions depending on the situation:
(a) If the total value of the contract is less than $5,000.00 and the Service Provider IS NOT a current McMaster employee: The Account Signing Authority evaluates the ICQ to determine whether the nature of the engagement meets the criteria for independent contracting or whether an employment relationship exists. If the information on the form supports that the relationship is properly that of independent contracting, he/she obtains appropriate signatures on the form, retains the original in his/her Department and sends a copy of the signed ICQ to Internal Audit.
(b) If the total value of the contract is $5,000.00 or more: The Account Signing Authority e-mails the completed ICQ to the ICQ Administrator at icqadmin@mcmaster.ca for review and evaluation. The review and evaluation will normally take 2 - 3 business days and the result will be communicated to the Account Signing Authority. If the ICQ Administrator determines that that the relationship is properly that of independent contracting, the ICQ will be given an HR Approval Number and will be returned to the Account Signing Authority with a note confirming this status in the “CONCLUSIONS/COMMENTS section of the form. The ICQ form will only be returned with an HR Approval Number if theICQ Administrator confirms that the Service Provider is an independent contractor.
(c) If the Service Provider is a current McMaster employee OR a retiree within the last 6 months: The Account Signing Authority e-mails the completed ICQ to the ICQ Administrator at icqadmin@mcmaster.ca for review and evaluation. The review and evaluation will normally take 2 - 3 business days and the result will be communicated to the Account Signing Authority. If the ICQ Administrator determines that that the relationship is properly that of independent contracting, the ICQ will be given an HR Approval Number and will be returned to the Account Signing Authority with a note confirming this status in the “CONCLUSIONS/COMMENTS section of the form. The ICQ form will only be returned with an HR Approval Number if theICQ Administrator confirms that the Service Provider is an independent contractor..
The Service Provider, the Account Signing Authority and his/her Manager (the Senior Administrator of Unit responsible for approving the expenditure) must each sign the ICQ form.
If the relationship is properly one of employment, it will then be up to the Department to follow proper payroll and Human Resources procedures to hire the Service Provider as an employee.
More details and specifics can be found in the policy (Payments to Individuals (Independent Contractor vs. Employee) and its appendices at: http://www.mcmaster.ca/bms/policy/finance/icq08/icq08_policy_v3.pdf.
The ICQ Form is Appendix “E” to the Policy. A copy of the Form can be found on the Business Management Services website at:
http://www.mcmaster.ca/bms/policy/finance/icq08/icq08_app_e_individual_cont_question.XLT
As always, you are asked to retrieve the ICQ Form from this website each time you need to fill one out, because the form is often updated with new information. Only current versions of the form will provide the appropriate information for this simplified process.
If you have questions, please contact either the ICQ Administrator (icqadmin@mcmaster.ca, phone extension 23694), or Nancy Gray (graynan@mcmaster.ca); phone extension 27464).
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