University changing Faculty status from "Employee" to "Independent Contractor"

Discussion in 'Online & DL Teaching' started by graymatter, Jul 6, 2016.

  1. graymatter

    graymatter Member

    One of the online universities that I've done curriculum development and course facilitation for (since 2008) sent us (by snail mail) written contracts today. Until now, we've digitally signed course contracts on a course by course basis.

    This contract runs July 1, 2016 through June 30, 2017. My title remains "Adjunct Professor." Compensation remains the same. The course-by-course (no tenure, no guarantees, etc) scheduling remains the same. EVERYTHING remains the same.

    Except for one thing.

    "Appointee is and shall remain an independent contractor with respect to all Services performed under this Agreement, and shall assume all risks attendant thereto. Appointee agrees to and does hereby accept full and exclusive liability for the payment of any and all contributions or taxes for, by way of example and not limitation, social security, unemployment insurance, retirement or medical benefits, pensions, or annuities, now or hereafter imposed under any state or federal law or regulation, that may be measured by compensation paid or work performed under the terms of this Agreement. Appointee further agrees to comply with lawful rules and regulations and to meet all lawful requirements which are now, or hereafter may be, issued or promulgated by any duly authorized state or federal official or legislative body. Appointee acknowledges and agrees that the university is interested only in the Services, and the conduct and control of Appointee's performance of this Agreement and provision of the Services will be solely within the reasonable discretion of Appointee. Nothing contained in this Agreement shall be deemed or construed to place the Parties in the relationship of partners, joint venturers, principal-agents, or employer-employee, it being understood that the Parties are and will remain independent contractors in all respects and neither party shall have any right to legally obligate or bind the other in any manner."

    So... how does this work? How can they change our status while keeping titles, pay and expectations the same?

    I thought that there were legal reasons that I've been an employee all these years at all these schools. What practical ramifications will there be if all of my employers follow suit?

    What benefit do they receive? Any benefit for me?

    Full disclosure: I've been considering resigning this school for a while as it's undergrad-only and relatively low paying. I stay for lower-than-average facilitation wages because the curriculum development (which I haven't done for years) has been higher-than-average.

    Thanks for your insights.
  2. graymatter

    graymatter Member

    I found this elsewhere:
    " In 1989, the IRS issued Private Letter Ruling 8925001 which advised schools and universities to treat adjunct faculty members as employees for purposes of FICA and income tax withholding. The word adjunct, as used in this PLR, means professors or instructors who are part of the teaching staff without having full-time or permanent status. This PLR is applicable to teaching situations where the university recommends the books, teaching materials, establishes working hours and determines which courses are to be taught. In this situation a form W2 should be issued. "
  3. Bruce

    Bruce Moderator

    Hopefully one of our lawyers jumps in, but from what I know about labor law, unless you have some sort of tenure (school tenure, civil service, etc.), you would have to show that you were harmed in some way (financially) in order to have standing to sue.

    Perfect example of why I'd never depend on adjuncting for a paycheck, the winds are fickle and blow often.
  4. Neuhaus

    Neuhaus Well-Known Member

    I cannot speak about having standing to sue.

    However the IRS is pretty strict about employee misclassification. And you don't need any standing to file a complaint (there is a standard form and it is available online). The IRS will investigate and can impose penalties if they find employees have been misclassified as independent contractors.
  5. graymatter

    graymatter Member

    Oh, I don't intend to sue either way. As I noted, this is one of the slowest horses in my stable - I'll just drop them if this is a(nother) disadvantage to working for them.
  6. Davewill

    Davewill Member

    It makes a big difference. You'll have to pay self-employment tax, which is the employer's contribution to Social Security and Medicare, so you just got a 13+% pay cut. Plus the fun of making estimated tax payments during the year. On the upside, any unreimbursed expenses you incur can be deducted fully. :ugh2: Someone should turn them in.

    There are other downsides that probably don't mean much in this situation, like access to worker's comp, and unemployment benefits.
    Last edited by a moderator: Jul 6, 2016

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