Engaging Independent Contractors

This type of arrangement is most often appropriate when a project is limited in length and scope. Contractors are typically paid a fixed rate per project after a deliverable or upon receipt of an invoice for services.  To use this option, the Program may identify an Independent Contractor. 

Classification of Independent Contractors/International Context

In most countries, a worker is assumed to be an employee unless he or she qualifies as an independent contractor by meeting certain criteria. The criteria vary from country to country, but the following qualities tend to be globally important for independent contractor determination:

  • Control over how, when, and where the work is done

  • A business of doing similar work for other clients (also as a contractor)

  • Use of own office, other facilities, and equipment

  • Payment of own business expenses

  • Pay based solely on services rendered (e.g. no vacation pay)

  • Defined project or contract end date

FAQs
Can I engage an international student working overseas as an independent contractor?

Please refer to the grid below:

Role Student Classification Independent Contractor? Additional Requirements
Teaching Assistant Penn Undergraduate No  
  Penn Graduate No  
  Non-Penn Undergraduate No  
  Non-Penn Graduate No  
Research Assistant Penn Undergraduate No  
  Penn Graduate No  
  Non-Penn Undergraduate No  
  Non-Penn Graduate Yes

Preference is to engage the individual through their home institution.  This involves an agreement between the Penn School and the other institution; Penn pays the other institution to engage the student.

If this engagement is not possible, IC classification may be approved if:

  • Engagement no longer than one semester (for exceptions contact GSS)

  • Research is independent

  • Payment terms by deliverable (not hourly rate)
Can I engage an instructor working overseas an independent contractor?

No, independent contractor classification is not appropriate for teaching positions. Contact GSS to discuss other ways to engage these individuals, either through their home institutions or through an external payroll provider. 

Can I engage a postdoctoral fellow working overseas as an independent contractor?

If the same criteria are met as those outlined for non-Penn graduate student RAs:

  • Engagement no longer than one semester (for exceptions contact GSS)

  • Research is independent

  • Payment terms by deliverable (not hourly rate)

Contact GSS for assistance.

Can I pay an international independent contractor an hourly rate?

No, independent contractors should be paid by project deliverable.

Penn's Service Provider Classification

The Program must be aware of both home and host country labor classification laws as a worker could be reclassified by either country’s legislation.  Penn’s Service Provider Questionnaire (SPQ) – completed by the potential service provider, and Service Provider Evaluation Worksheet (SPE) – completed by the hiring manger in concert with the school/center HR director, are used to evaluate the relationship of the service provider and the University.  In recent years, the US Department of Labor (DOL) has strengthened US domestic classification regulations for independent contractors.  Although the modifications of the US guidelines are based on work in the US, Penn will use these forms, along with the host country’s regulations, when determining the appropriate worker status for individuals performing services outside of the US.