The majority of people who work for and provide services to the State or participating employers are considered public employees. Those who provide services as independent contractors or consultants are not permitted to join NYSLRS or receive service credit for consultant or independent contractor services.
To determine if a person you hired is an employee or an independent contractor, you should first determine if an employer/employee relationship exists.
Sections 315.2 and 315.3 of regulations, which were effective on April 1, 2008, identify factors that could indicate an individual is an employee rather than an independent contractor. Some of these factors include:
- The employer controls, supervises or directs the individual as to how assigned tasks are to be performed;
- The employer sets hours to be worked and maintains time records;
- The employer prepares performance evaluations;
- The employer provides permanent work space and facilities;
- Taxes and employee benefits are deducted from the individual’s paycheck; and
- The individual is entitled to fringe benefits such as vacation, sick leave, personal leave, health insurance and grievance procedures.
The regulations also identify factors that may indicate an individual should be considered an independent contractor, including, but not limited to:
- The individual has a personal employment contract with the employer;
- The employer pays for the individual’s services through the submission of a voucher;
- The individual concurrently performs substantially the same service for other public employers; and
- The individual is also employed or associated with another entity that provides services to the employer by contract, retainer or other agreement.
These are just some of the factors you should take into consideration when classifying an individual.
The regulations require that you send us a completed Certification for Individuals Engaged in Certain Professions (RS2414) for each person you hire as an attorney, physician, engineer, architect, accountant or auditor on or after April 1, 2008. The form must be signed by your primary chief fiscal officer (CFO), alternate chief fiscal officer or chief executive officer (CEO). You can designate an alternate CFO by:
- Completing a Designation of Alternate CFO form signed by the CFO or CEO; or
- Sending a letter to our Pension Integrity Bureau. The letter must be on your letterhead and signed by either your CFO or CEO. You can fax the letter to us at 518-486-9577.
You must mail a certification form to our Pension Integrity Bureau by the first of the month after an individual is hired, so it reaches us before you file the first monthly report containing the employee’s earnings and service.
Pension Integrity Bureau
110 State Street
Albany, NY 12244-0001
In addition to the completed certification form, you must send us documentation supporting the individual’s appointment as an employee and your decision to report the individual to NYSLRS, as well as acceptance of the appointment by the local Civil Service Commission, where necessary. If the appointment was made by a governing board, you must submit copies of the minutes from the meeting when the appointment was made. If available, please also include a job description, evaluation or copy of any contract.
For individuals hired prior to April 1, 2008, you would complete a Certification for Determining Independent Contractor or Employee Status (RS2415) for persons you hired as an attorney, physician, engineer, architect, accountant or auditor. You would also complete an RS2415 for other job titles if you need to determine if an individual is an Independent Contractor or at the request of NYSLRS.
All forms and documentation you submit will be reviewed by NYSLRS.
Independent contractors or consultants should not be paid on the payroll, but in some other manner. If, through completing the Certification form, you determine an individual providing services is a public employee, that individual must be paid on your payroll, regardless of whether payment is made on a salary or a fee basis.
If a public employee becomes a NYSLRS member, days worked, earnings, and contributions must be included on your retirement monthly report.
Contractors and consultants should never be included on the monthly report.
Note: If you are hiring a NYSLRS retiree as a contractor or consultant, their earnings would count towards their post-retirement earnings limit. If you are hiring a retiree and they have questions about post-retirement earnings limits, they should read our publication, What if I Work After Retirement?
If you have questions or need further assistance determining an individual’s status, you can email our Pension Integrity Bureau at [email protected].