The non-employee compensation determination process must be completed any time a person is to be paid for services as an Independent Contractor or provided with an Honorarium. This must be achieved before engaging the person.
Effective January 1, 2020, AB 5 enhanced California's already rigid standards for classifying workers as independent contractors. Under a previous ruling (commonly referred to as the Dynamex case), the California Supreme Court ruled that companies must use a three-pronged test (known as the ABC test) to determine if a person should be classified as an employee or independent contractor.
Workers must be classified as an employee unless the employer can prove
• The worker is free to perform services without the control or direction of the company.
• The worker is performing work tasks that are outside the usual course of the company's business activities.
• The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Human Resources facilitates the classification approval process but does not ensure payment to the worker. Independent contractors and honoraria are paid through University Corporation Accounts Payable. Below are the steps that must be completed before engaging a worker, and before UCorp AP will process payment.
Department submits appropriate form to HR (based on guidance below)
HR reviews paperwork and makes determination
HR sends determination back to department and copies UCorp AP
If approved, the department completes additional documents required for payment, and works with UCorp AP for the remainder of the process. If not approved, HR will provide additional options, such as hiring the individual as an employee.
Employee: The majority of workers fall well into this category. Engaged in a traditional employment relationship performing duties under the direction of the employer, within the normal scope of business activities. An employee is paid a salary through payroll and may be eligible for benefits.
Independent Contractor: Meets the ABC test requirements. Independent contractors may provide services over a long period of time.
Honorarium: An honorarium is a one-time token payment made to bestow recognition to an individual for services they perform, for which payment is not required. Typically, an honorarium is issued when custom or propriety forbids a price to be set. Therefore, payment to the recipient is at the discretion of the payer. The arrangement between the recipient and the university is informal and does not require a contract. Because payment is not required, honorarium recipients do not provide an invoice to the university. This gratuity is offered to honor their time, not in payment for services performed.
Volunteer: A person who desires to volunteer their time and services to perform the duties or activities for University Corporation. Volunteers are not compensated for the services they provide.
If you know what type of non-employee you would like to engage, please click below to complete the appropriate form. If you need additional guidance, please continue reading.
Employee: (Student Workers and Temps only- for Full Time and Part Time Regular position, please complete an RTR). Volunteer
- Independent Contractor
Is the individual eligible to Perform work as a non-employee?
- Is the individual a current CSUMB, CSU, or CSU Auxiliary employee?
- Is the worker free from the control and direction of the hiring agency in the performance of work?
- Does the worker perform work that is outside the usual course of the Corporation's business?
Determining Independent Contractor versus Honorarium
An honorarium is:
- One-time payment showing goodwill or appreciation
- Payment is not required and at the discretion of the payer
- No informal agreement does not require a contract
- No invoice
- To honor the recipient's time, not in payment for service
- Paid to persons of scholarly or professional standing
- Always defined by the University, not the recipient
- Judge in a writing or photo contest
- Making a speech
- Publishing an article
- Special lecture
- Participation in a workshop
- Panel discussion
An honorarium is not:
- Payment made to a corporation, business, or partnership
- Payment is negotiated and agreed upon (contractual agreement)
- To replace or circumvent procedures for paying independent contractors
- Payments requiring a signed contract
- Payments for a recurring activity, events or services
- Activities stretched over several months
- Payments to faculty, staff or student employees for their services
- Performance fee payments to individuals or groups for professional services not directly related to academic
- Note: If parties enter into a formal agreement on price, the transaction constitutes an agreement/contract, not an honorarium. Honoraria correspondence does not include terms and conditions or result in the receipt of an invoice for Agreements/contracts are subject to procurement policies and procedures.
Speaker fees: Speaker fees are payments in which the amount to be paid for a specific service is determined by the speaker.
- Speakers may include subject-matter experts, guest authors, artists, and performers.
- The speaker must provide an invoice as documentation for payment of the fee.
Does this qualify as an honorarium?
You must be able to answer NO to all of these questions:
- Is the individual a business, corporation, or partnership?
- Was the payment amount negotiated between the University and the individual?
- Is there a contractual agreement?
- Are the individual's services recurring?
- Is the individual an employee or student employee?
- Did the individual set the price?
- Does this job/classification already exist?
If you answered yes to any of the above questions, the payment does not qualify as an honorarium. The individual performing the work may not be paid via the direct payment process. Please use the IC worksheet if you would like to pay the individual as an independent contractor.
If you are ready to proceed, please complete the appropriate form below. Once it is signed by the appropriate administrator, email the form along with any supporting documents to ucorp_independent_
firstname.lastname@example.org. Please refer to the attached process map for further direction and allow 5-7 business days for determination.
Please feel free to email us with any questions regarding the process.
For questions please contact: ucorp_independent_
All independent contractor's agreements must have the IC questionnaire in order to be processed.