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Consultant vs. Contractor Overview
Independent contractors and consultants provide services to UCSF. IRS1 and UC policy2 require that UCSF classify these service providers correctly and disclose their relationship with UCSF before hiring. If you are certain that your service provider is to be a Consultant, please proceed to Independent Consultant Agreement: How-to Guide. If you are not certain about how to classify your service provider, please read the definitions below in “How to Differentiate between a Consultant and a Contractor”.
How to Differentiate between a Consultant and a Contractor
In a nutshell, Consultants provide advice, while Contractors "do" things.
The differences between a Consultant and a Contractor can seem like you’re splitting hairs, but doing so is required under the law. As a first step, you should fill out the Pre-Hire Worksheet form, because it is helpful in determining whether, based upon the services and/or work to be provided, the person whom you wish to engage is a Consultant or Contractor and to ensure that they are not more properly classified as an employee. Besides being a good first step, you will need to submit this form each time you request a contract with an individual or entity.
A Contractor relationship exists when UCSF has the right to control only the end result of a service, not the way it is performed.2 And, UCSF generally receives something, e.g., transcription services, programming services. So, though part of a Contractor’s services may include advice, a Contractor is in the end a “doer.”
In contrast to Contractors/“doers”, Consultants generally offer only advice or propose solutions to problems, but they do not direct, carry out, or implement solutions. UCSF cannot control either the result of the Consultant’s service or the way it is performed.3 A Consultant requires little or no guidance in providing input. Caveat: Though individuals or companies that provide professional or personal services may refer to themselves as “Consultants,” under University policy they may actually be “Contractors.”
NOTE: Under Senate Bill 14674, a Consultant who has participated in developing a recommended course of action cannot be employed to implement any aspect of the recommended solution.
|INDEPENDENT CONTRACTOR||INDEPENDENT CONSULTANT|
|Entity may be either an individual or an organization.||Entity is usually an individual, but may be an organization.|
|The services are of a specialized nature which cannot be performed by a regular employee.||The services are primarily advisory in nature requiring professional expertise to solve a clearly delineated problem. The advice cannot be obtained from campus resources.|
|Entity may be given responsibility for the conduct of part of a sponsored project.||Entity may provide advice, recommendations, analysis and resources based upon their background, education, experience, knowledge and expertise. Entity may not be given responsibility for any part of conduct of a sponsored project.|
|Entity may be given credit in any published report or other documents.||Entity may not be given credit in any published report or other document as other than "consultant" to the project.|
|The department retains the right to control the results of services performed, but not the manner of performance. The department has the right to reject the services/products provided.||The department retains neither the right to control the results nor the manner of performance.|
Need an expert? Contact David Pendergast at (415) 514-9649.
1 IRS Publication 15-A, Employer’s Supplemental Tax Guide
2 UC Business & Finance Bulletin BUS-77, Independent Contractor Guidelines
3 UC Business & Finance Bulletin BUS-34, Securing the Services of Independent Consultants
4 Senate Bill 1467, Conflict of Interest