Thousands of nonprofits have done it, including United Ways, right here in Kentucky. You've
just hired an independent contractor or consultant to work on a special
project. Did you first evaluate whether the worker should be treated as
an employee instead? Does it matter?
Yes, it matters because the government makes a distinction between the
two classifications of workers (independent contractor/consultant versus
employee) and requires nonprofits to treat them differently for payroll
and withholding purposes. Also, insurance issues will surface when the
consultant is injured and tries to file a claim for workers'
compensation. Is she covered? It depends on whether she is a consultant -
or not.
Federal and state governments have regulations that define who is an
independent contractor/consultant and who is an employee. If a nonprofit
misclassifies a worker, the nonprofit is at significant risk. There are
serious penalties and back taxes owed when a nonprofit incorrectly
treats someone as an independent contractor/consultant, when in fact
the worker should have been classified and treated as an employee.
Additionally there are risks to misclassifying a worker as an exempt employee, when s/he should be classified as non-exempt. For tips and tools for avoiding misclassifying workers, read more about this topic from the
resources available on the National Council's website.
IRS guidance provides that someone is properly classified as an independent contractor/consultant "when the nonprofit has the right to control or direct only the result of the work done by an independent contractor, and not the means and methods of accomplishing the result."
We hope you feel comfortable with the distinction between independent
contractors/consultants and employees. If you are not sure, here are
some resources to help you classify workers correctly and avoid
associated risks:
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UWKY board member, Tori Molfese, leaves Louisville for Lincoln, Nebraska
 Tori Molfese
departs the University of Louisville at the end of September for the University
of Nebraska - Lincoln where she and her husband, Dennis, start new positions as
Chancellor's Professors. Tori will work with the College of Education and
Human Science's Child Development initiative to further develop partnerships
between university faculty, schools and families to make a difference
in children's learning from preschool and on into the early
elementary grades.
This position allows Tori the opportunity to apply her research on child development and learning to understanding how classroom
environments and
family activities enhance student performance. Dennis will establish
a new brain imaging research center which is a joint venture between academics
and athletics to study how different methods of brain imaging can be used to
provide a more complete picture of how the brain processes information, changes
in brain function due to injury or disease, and developmental changes in brain
structure, function and processes.
Thanks to Tori for her service to United Ways in Kentucky. She will be missed!
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September Birthday Announcements!
 The following is a list of friends of United Way of Kentucky celebrating upcoming birthdays.
Join us in wishing them a healthy and happy year to come!
September 3: Candace Hubbard September 3: Kevin Middleton September 7: Dana Mayton September 11: David Adkisson September 13: James Willis September 14: Barbara Tuck
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