好色先生

WORK MUST NOT COMMENCE UNTIL A PURCHASE ORDER HAS BEEN EXECUTED

Every supplier with the legal structure of Individual, Sole Proprietor, or Single-Member LLC is treated as an individual for tax purposes (per IRS), so it is imperative that the campus Human Resources perform several validations to ensure federal compliance as well as job classification review. This occurs during the Independent Contractor Review step in CSUBUY P2P. The requisitions of all suppliers with those legal structures route to this workflow step for evaluation.

Importance of Proper Classification

It is important to determine the correct classification of workers as employees or independent contractors. This distinction is significant because an incorrect determination could result in the following:

• Wage liability, including overtime
• Benefit liability, including retirement
• Loss of reimbursement under Federal contract and grant funds
• Penalties/fines for violation of State and Federal tax withholding laws
• Penalties/fines for violation of Federal laws pertaining to the employment of nonresident aliens (Form I-9)

In addition, the following employment-related requirements may be violated:

• State Oath of Allegiance, as required by the California Constitution
• State Political Reform Act financial conflict of interest rules
• Workers' compensation and unemployment insurance coverage requirements

Department Processing Instructions

1. Prior to entering a requisition, the requester will need to confirm if the supplier has an existing profile. To confirm, go to the Suppliers menu option, and search for a supplier. Ensure the status is set to 鈥淎ll鈥� and enter the full or partial supplier name to conduct a search.
   
   NOTE: The Independent Contractor (IC) Form must be submitted if the supplier is classified as an IC. You can make this determination if you see the US Flag icon in the Supplier Classes. If the US Flag does not appear, do not proceed with the IC Form process, and enter the appropriate Form Request.
2. If the Supplier has an existing profile, select the supplier link to open the supplier profile, select the 鈥淎ctive Business Units鈥� link to confirm if the supplier is available for CSUDH use (DHXMP = CSUDH).
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3. If the supplier does not have an existing profile, you will need to request a new supplier profile. Select Home and select 鈥淩equest New Supplier鈥� and completing the requested information.
   NOTE: Please ensure the supplier contact you include is someone within the organization who is authorized to provide or manage company structure, tax, and banking information. This designated contact will receive a personalized invitation to register the supplier on the CSUBUY P2P Platform. Please note that this invitation cannot be forwarded and must be completed by the individual who received the invitation.听
   
4. If the supplier has an active profile, but CSUDH (DHXMP) does not show up in the Active Business Units, you will need to submit a Supplier Extension Request, to extend that supplier to CSUDH.
   
5. Once the supplier is onboarded, you can proceed to Step 6.
   REMINDER: The Independent Contractor (IC) Form must be submitted if the supplier is classified as an IC. You can make this determination if you see the US Flag icon in the Supplier Classes. If the US Flag does not appear, do not proceed with the IC Form process, and enter the appropriate Form Request.
   
6. Login to P2P to submit an Independent Contractor (IC) Form in P2P. To locate the IC form, go to Home, and select 鈥淕eneral鈥� in the Showcases.
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7. Complete the information requested in the IC Form and Questionnaire.
   Note: You many need to work with your vendor to obtain responses for certain questions.
8. Ensure the IC Form includes details on the scope of work being performed, service timeframe, and cost. Once all the questions are answered and cost details are entered, select 鈥淎dd and go to Cart鈥�. NOTE: Ensure your cart is empty.听
   
9. Select department location from the list, and enter a Cart Name (optional). If your department location is not on the list, open an to request an addition.
   
10. Once you Proceed to Checkout, your cart will be converted into a Draft requisition. The Requestor will make necessary adjustments to the Draft requisition, such as adding/modifying the chartfield, attaching a signed liability waiver, quote or estimate, and adding any necessary comments/notes to assist Procurement and Contracts with processing. Once completed, select SUBMIT. The requisition will then be issued a requisition number and be routed for Delegation of Authority approval. You can check the processing status by selecting the process workflow.
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11. After the DOA is approved, the requisition will route to Human Resources for review and approval.

After a requisition is approved, HR will conduct the following process to ensure the supplier is properly classified.听

• Step 1: Review Independent Contractor Request for scope of work.
• Step 2: Review Independent Contractor Request for any relationship to the CSU as reported by the requestor.
• Step 3: Review Supplier Profile for any relationship to the CSU as reported by the supplier
• Step 4: Review Supplier Profile to identify EAD cardholders or foreign individuals who require a tax analysis

NOTE:

• HR will render a final decision on Independent Contractor or Employee after reviewing submitted documentation.
• HR may request additional documentation if required, inclusive of background check if applicable.
• HR may contact the requesting department if the candidate is deemed an employee.

Once all approvals are completed, the requisition will be routed to Procurement and Contracts for processing.

Review the CSUBUY P2P Training Resources, February 3, 2026 recordings for IC instructions, csudh.edu/procurement-contracts/csubuy.

• PowerPoint Week 2, Day 1, PowerPoint [PDF]

• Technical Letter HR/Salary 2021-07 [PDF]

1. What is an Employee vs. Independent Contractor?
   • Employee: An individual in an employment situation in which the employer has the right to control and direct the individual with regard to the result to be accomplished and the process by which the result is accomplished.
   • Independent contractors: Individuals who render a service and meet contractor conditions established by the IRS. They typically have a separate workplace, are not supervised, and have a particular set of skills not available elsewhere within the organization. They are not entitled to employee benefits, are not covered by workers' compensation.
2. What is AB 5 and what does it do?
   • AB 5 is a bill the Governor signed into law in September 2019 addressing employment status when a hiring entity claims that the person it hired is an independent contractor. AB 5 requires the application of the 鈥淎BC test鈥� to determine if workers in California are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the Industrial Welfare Commission (IWC) wage orders. The California Supreme Court first adopted the ABC test in Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903. Among other things, AB 5 and later AB 2257 added a new article to the Labor Code addressing these issues (sections 2775-2787).
3. What is the Dynamex ABC Test?
   • Under the ABC test, a worker is considered an employee and not an independent contractor, unless the hiring entity satisfies all three of the following conditions:
     1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
     2. The worker performs work that is outside the usual course of the hiring entity鈥檚 business;听and
     3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
4. What are the Procurement and HR review timelines?
   
5. Public Contract Code Restrictions for CSU Employees - FAQ
   
   • Important: This FAQ addresses restrictions resulting from Senate Bill 41, IRS rules and CSU Conflict of Interest Code. Additional and outside employment opportunities for CSU employees also may be limited by restrictions in other state laws and collective bargaining agreements, not addressed in this document.
     • Restriction 1

       A CSU employee, except for those employees with teaching or research responsibilities, may not 鈥渃ontract on his or her individual behalf as an independent contractor with any 好色先生 department to provide services or goods.鈥� (PCC 10831)
       Can a CSU employee contract with a state agency other than the CSU to provide a needed service? 听	No, because the state agencies all make payments to employees as a single employer through the State Controller鈥檚 Office. The Internal Revenue Service (IRS) requires that all payments made by a single employer to an employee be reported on a W-2, not on Form 1099. 听
       Can a CSU employee with a specialized skill or expertise contract with the CSU to provide a needed service? 听	No. This violates the CSU Conflict of Interest Code. Additionally, as noted above, the IRS would require that payment be reported to the individual as an employee on a W-2. 听
       Are there any exceptions?	No. 听
       How can a CSU employee provide a needed service to the CSU?	The CSU employee can be hired as an employee of the CSU (e.g., utilizing the 鈥渟pecial consultant鈥� classification), as long as the employment is not funded by a CSU contract with a vendor to perform services for or on behalf of the vendor).
       Can a CSU employee be employed by and/or contract with a CSU foundation or auxiliary to provide a needed service or expertise?	CSU employees can be employed by or contract with the CSU foundation or an auxiliary, provided that the employees鈥� activities are not funded by a CSU contract between the CSU foundation or auxiliary and meet the definition of Independent Contractor.
       Can a CSU employee receive a 鈥渟tipend鈥� or 鈥渉onorarium鈥� payment though Accounts Payable for services provided to another CSU campus?	No.

     • Restriction 2

       A CSU employee, except for those employees with teaching or research responsibilities, may not engage in any employment or activity for which the employee receives compensation through or by a CSU contract, unless the employment or activity is within the course and scope of the employee鈥檚 regular CSU employment. (PCC 10831)
       Can a CSU employee have his/her activities funded by a CSU contract? 听	No. 听
       Can a CSU employee provide a needed service or expertise to the CSU if the employee is hired by a private sector entity to do work that is funded by a CSU contract? 听	No. 听
       Does this restriction apply to employee contracts with a CSU auxiliary, where the auxiliary has contracted to perform a service for CSU? 听	Yes. 听
       What determines if an employee鈥檚 work on an activity funded by a CSU contract is within the course and scope of the employee鈥檚 regular CSU employment? 听	A CSU employee's position description or employment agreement may identify activities that the employee might be required to perform on an activity funded by a CSU contract. However, it may be that an activity is only an occasional part of the employee鈥檚 job, and not specifically identified in the position description, but is within the course and scope of the employee鈥檚 regular employment. The CSU, as the employer (not the employee), appropriately determines whether the activity is within the course and scope of the employee鈥檚 regular CSU employment. If the CSU appropriately designates the activity as within the course and scope of employment, the employee can be compensated as an employee. 听

     • Restriction 3

       For two years following retirement or separation from CSU employment, no former employee may enter into a contract 鈥渋n which he or she engaged in any of the negotiations, transactions, planning, arrangements, or any part of the decision-making process relevant to the contract while employed in any capacity by any CSU department.鈥� (PCC 10832 (a))
       Do 鈥渘egotiations, transactions, planning, arrangements, or any part of the decision-making process relevant to the contract鈥� include technical support? 听	If the separated employee provided limited technical support to the planning or procurement process as requested, but did not participate in planning or decision-making, the restriction does not apply.
       Can a separated/retired employee be rehired by the CSU as an employee to provide a service related to the selected vendor鈥檚 contract?	Yes. However, the timing of the hire must not conflict with CalPERS re-employment restrictions. 听
       Can a separated/retired employee who participated in the planning or procurement process contract with the CSU to provide a service related to the selected vendor鈥檚 contract?	Yes. 听
       Can a CSU employee who participated in the planning or procurement process relevant to a proposed contract enter into that same contract after he/she retires or is otherwise separated from CSU employment?	No. 听
       Can a separated/retired employee who participated in the planning or procurement process contract with the selected vendor to assist the vendor in meeting its CSU contract obligations?	Yes. 听
       Can a separated/retired employee be hired as an employee by the selected vendor to assist in meeting the contract obligations?	Yes. 听

     • Restriction 4

       For 12 months following retirement or separation from the CSU, no former employee may contract with the CSU if he or she was employed by the CSU 鈥渋n a policymaking position in the same general subject area as the proposed contract within the 12-month period prior to his or her retirement鈥�or separation.鈥� Exempted are contracts for expert witness services and contracts to continue attorney services. (PCC 10832 (b))听
       What is a policymaking position?	An employee in a policymaking position sets or recommends CSU policy. Management Personnel Plan administrators are in policymaking positions. Network analysts generally are not in policymaking positions. Each campus must review a separated/retired employee鈥檚 prior position to determine its policymaking impact.
       What does 鈥渋n the same general subject area鈥� mean?	This language should be interpreted broadly. If an employee specialized in one area of, for example, human resources, that employee would be subject to the 12-month restriction from all areas of human resources. If a campus academic administrator managed the Business school, s/he could not contract for work developing a business curriculum. 听
       Can a CSU employee in a policymaking position who retires/separates provide services in his/her subject area on a contract basis to the CSU within 12 months of separation?	No. There are two limited exceptions: Contracts for expert witness services and contracts to provide continuing attorney services
       Can a separated/retired employee in a policymaking position contract with a different CSU campus to provide services in the same general subject area?	No. Even though CSU campuses and the Chancellor鈥檚 Office are separate employers, for the purpose of this restriction, a systemwide preclusion applies. 听
       How can CSU secure needed expert services or skills of former employees?	CSU can hire former employees as continuing CSU employees. This restriction does not prohibit the rehire of former employees or retirees. However, the timing of the retiree hire must not conflict with CalPERS re-employment restrictions. 听
       Can a CSU employee in a policymaking position who separated/retired provide contract services to another state agency other than the CSU within 12 months of separation in any area of expertise?	Yes. This restriction applies only to CSU contracts. 听
       Can a former employee in a policymaking position be employed by or contract with a foundation or other auxiliary to provide services to CSU in his/her subject area?	Yes. However, if the former employee is retired, the timing of the retiree hire and work to be performed must not conflict with CalPERS re-employment restrictions. 听
       Can a former employee in a policymaking position provide needed service or expertise to another state agency, if that agency has a contract with the state?	Yes. However, if the former employee is retired, the timing of the retiree hire and work to be performed must not conflict with CalPERS re-employment restrictions. 听