Independent Contractor Reporting SB542

Independent Contractor Reporting – SB542 Escape Manual Chapter 8 – Independent Contractor Vendors When to Report -Should be reported within 20 days of making payment -Should be reported when payments in the aggregate equal to $600 -Should be reported when a contract is entered into for more than $600 What to Report -Full name, address, SSN of service provider (vendor) -Service recipient’s name, business, address and phone number (district) -Service recipient’s federal employer ID number (district) -Dates of either the contract or payments made in the aggregate of $600 to any one service provider -Total dollar amount of contract, if any, and the contract expiration date Escape Activities Needed to Report SB542 Information -Finance – Purchasing – Vendors at an edit level -Finance - Purchasing – Independent Contractors at an edit level Escape Independent Contractor Reporting Process 1. Check vendor records 2. Collect Independent contractors (IC) vendors with direct payments/requisitions totaling $600 or more 3. Edit Vendor Contact Information 4. Run preliminary Independent Contractor Report (Req/Pay17) 5. Edit Initial Independent Report information 6. Run final Independent Contractor Report (Req/Pay17) 7. Select Independent Contractor Snapshot 8. Provide Information to EDD **Process assumes you are completing the reporting cycle in a single day. **If the process takes more than one day, you will need to use the date range when searching for records.

1. Check Vendor Records (Finance-Purchasing-Vendors)

Independent Contractor Page 1 a. Verify that the Independent Contractor flag is set to Yes b. Verify that there is either a Social Security number listed in the either the Federal Tax Id Field or the State Tax Id Field b.i. Independent Contractors must have a social Security number listed in at least the State field or the System will not report them as an Independent Contractor. c. Vendor Name and Address will be taken from address line flagged for the 1099 remit. If there is no 1099 flagged address the system will use the last name/address used in the last remittance.

Independent Contractor Page 2 Independent Contractor Page 3 2. Collect Independent Contractor(IC) vendors with direct payments/requisitions totaling $600 or more (Finance-Purchasing-Independent Contractors) The initial search will pick up vendor information based on the criteria selected as follows: a. All vendors marked as independent contractors b. Requisitions /Direct payments within the specified date range you selected c. Requisitions/Direct payments that have accumulated amounts of $600 or more d. Vendors that have not been previously reported to EDD for the year

The search criteria shown in the example above is a sample only. The report shown below would be the resulting report/list to begin your editing for final reporting to EDD.

Independent Contractor Page 4 The data reported on the report/list shown above comes from the Vendor History record (payments) or the Vendor Record (contracts) for the period specified. You may need to edit the list before you run your final report for EDD.  To review the vendor information for each vendor -Highlight the line on the list -Select Open from the task bar

Possible edits you may need to review the list for include: 1) Many vendors do not have State Tax Id’s. a. Vendors 005821, 005812 and 006495 are examples from our list b. The system is looking for a ssn formatted id number in either the Federal or State Tax Id fields 2) Several vendors do not have ssn ‘s for either the federal or state tax id a. Vendors 002056, 005843 and 005781 are examples from our list b. The system is looking for a ssn formatted id number in either the Federal or State Tax Id fields or it will report as 000-00-0000 and it will be incorrect raising a red flag 3) Several vendors on the initial list do not appear to be Independent Contractors a. Vendors 005843, 006710 and 004673 are possibilities needing review from our list b. New W9’s may need to be sent to verify that the vendor is an independent contractor 4) Review the vendor addresses a. Vendor 000061 has an out of state address (NV) and the SB542 report should only report data for California based vendors b. Out of State vendors should not be flagged as Independent Contractors 5) Vendor you know is an Independent Contractor and they are not showing on the list a. Vendors may not have the Independent Contractor flag set to Yes 6) Contracts that have been entered into/approved that have not been setup on the specific vendor a. Could have happened during a board meeting, formal or informal b. Any contract amounts would be entered manually on the vendor record

Independent Contractor Page 5 3. Edit Vendor Contact Information (Finance-Purchasing-Vendors) While you can view all vendor information from the list, to edit the vendor information you will need to open the Finance-Purchasing-Vendor activity. a. Enter a valid SSN including the dashes in the State Tax Id field a.i.If you do not have a SSN for the vendor and they need to be reported as an independent contractor, you will need to get one from the vendor (W9) a.ii. The EDD does require a valid SSN for independent contract reporting b. If you do not have a SSN by the time to report, you will need to remove the independent contractor flag on the vendor record prior to the running of the final EDD report b.i.Once you receive the SSN, enter the ssn in the vendor record and then the vendor will report on the next report cycle c. If you need to add a vendor that did not previously show up on your list, modify the vendor record to display the Y in the Independent Contractor flag field c.i. The vendor will report on the next report cycle d. All changes to the vendor record are immediate and will be reflected the next time you run your search criteria from the Finance – Purchasing- Independent Contractor activity

You can run this listing and continue to edit the vendors reported until you feel good about the list. The ultimate goal of the vendor editing is to get to a list that contains all the information you need to report to the EDD for the reporting period you are working on.

4. Run the Independent Contractor Report (Finance–Purchasing–Independent Contractors) The list/report shown below is now my final list. a. Note that all the non SSN vendors are no longer present on the list b. My out of state vendor (000061) is no longer present. c. We did not have any requisition or direct vendor payments to report out this period. As you report them in previous cycles the EDD Reported Date will include a date and this type of entry will also not be present on the final list. d. There is now a contract amount listed for two of the vendors. These were manual entries made to the vendor record.

The actual EDD report and file are created as you select the snapshot icon from the tool bar above your final list. ***Note the activity producing the report and EDD file is from the Finance-Purchasing-Independent Contractor activity***

Independent Contractor Page 6 5. Provide Information to EDD

As you select the snapshot icon from the list you will receive the message shown below. Select Yes and shortly a report will be viewable on your screen.

This report does contain everything the EDD needs for reporting. I have also included the EDD instructions for SB542 reporting on the next page for your review.

Independent Contractor Page 7 Independent Contractor Page 8 Independent Contractor Page 9