May 2017

(This communication appeared in The Bottom Line and Almanac)

In January 2017, to achieve compliance with U.S. Department of Labor and Internal Revenue Service regulations, the University implemented a significantly revised policy and new process for classifying individual service providers who are new to Penn. Beginning July 1, this revised policy and new process must be followed for all individual service providers. 

As this date approaches, here are few important things to note:

  • Beginning July 1, all new and existing individual service providers must follow the policy and process for classification (employee vs. independent contractor) using the Service Provider Questionnaire (SPQ) and the Service Provider Evaluation (SPE) forms, unless it is one-day/one-time service that qualifies as a Limited Engagement. 
    • Independent contractors who are currently working without a contract must go through the classification process by July 1. 
    • Independent contractors who are currently working under a contract are to be classified at the end of the current contract.
  • Independent contractors must be set up by Purchasing and a P.O. must be in place before any work is conducted. 
  • PDA Forms for individual service providers will be rejected by Accounts Payable, with the exception of services falling within the narrow definition of Limited Engagements.
  • We will be reviewing data and addressing issues on an ongoing basis.

When working with Limited Engagement, please also keep the following in mind: 

  • Limited Engagement is designed for individual service providers (independent contractors) providing a one-time service to the University community, such as a speaker, artist, performer, presenter, or special lecturer. The service must be of short duration, meaning one time, maybe two times at most, a year.
  • Once completed and signed by the individual, the Limited Engagement agreement should be sent to Purchasing at for review and signature.
  • The signed Limited Engagement agreement is a returned to the School/Center contact, which then is responsible for preparing the PDA, attaching the W9 and other documents, if needed, and sending to Accounts Payable. 

This new process has been a significant change, and we appreciate the effort to understand and follow the steps for classification to help ensure the University is legally compliant with federal regulations. 

To download the most current SPQ, SPE, and other forms, visit the Individual Service Provider website at If you have questions about this process, please email the Worker Classification Help Desk at

To register for an upcoming Individual Service Provider: Classification and Payment training session, visit