How To Pay Consultants and Contractors

To determine when to pay someone as an employee versus a consultant/contractor, read through the Paying People for Services document. A detailed description on the difference between an employee and a contractor is also available at the Fingate web site. Here is a brief summary:

  • An employee is someone who works directly for Stanford, is on the payroll, reports to a supervisor, can quit or be terminated at any time, and whose work is subject to control by Stanford (both as to what services shall be performed and as to how they shall be performed).
  • An independent contractor (or consultant) is paid for the work determined in the contract, must complete the work specified, and does not report to a supervisor at Stanford (so the way services are performed are not necessarily controlled by Stanford).

 

Use the Consultant/Contractor Checklist to verify an individual qualifies as an independent consultant or contractor, and submit it with the contract paperwork. More information in the Administrative Guide 2.2.3 and the Setting Up a Contract memo.