This guidance provides specific details on the established financial threshold and the incorporation requirement for independent contractors.
ALA often uses independent contractors to conduct specialized business or to supplement capacity needs. There are IRS regulations relating to the definition of a independent contractor versus an employee. The American Library Association Unit Managers are responsible for adhering to all guidelines to ensure compliance with applicable laws and regulations.
Unit Managers are responsible for supervising and monitoring all independent contractors according to the provisions of the Independent Contractor Agreement.
All Unit Managers must require the use of the approved independent contractor template. Legal review is necessary if the contractor amends any template elements. The work to be completed is usually described in an amendment which should be attached to the contract.
To ensure compliance, ALA units that hire independent contractors must estimate the total costs of the services rendered per calendar year before the contract is signed.
- If the independent contractor is estimated to be paid up to $10,000 in a calendar year, they can be hired as an independent contractor. (The social security number is the taxpayer ID on the W-9 form).
- If the independent contractor is estimated to earn more than $10,000 in a calendar year, they will be required to incorporate to do business with the American Library Association.
- If the Unit Manger hires an independent contractor expecting the cost to be under $10,000 in a calendar year, but a continuation or increase in services will cause the total to exceed the threshold, the Unit Manager must notify the contractor to incorporate and submit an updated W-9 form.
- ALA does not provide guidance on the process of incorporation, which differs by state.
- ALA may not hire former employees of ALA as independent contractors within 6 months of their leaving ALA.