Please review the following Occidental College policies and procedures.
General Contract Guidelines
The College requires a written contract for any activities that:
- Commit the College to receive or spend certain funds
- Commit the College to purchase or provide goods or services
- Otherwise involve the use by third parties of College resources (including staff, faculty, and student resources) and/or facilities
Contract Review Checklist. Unless using a College-issued or approved template, the person initiating a contract should complete a Contract Review Checklist before finalizing the contract, to verify that all necessary provisions have been addressed. Upon completion, the Checklist should be attached to the contract and sent to the appropriate signatory for review. Additional consultation with the Business Office and/or General Counsel is encouraged when an employee has questions about the application of this policy, when a contract involves a high dollar amount, and/or when it contains irregular terms. Contracts involving the hiring of an independent contractor must follow the requirements and procedures set forth in the Independent Contractor Agreements section.
Submission of Completed Contracts to the Business Office. All fully executed contracts must be submitted to the Business Office (firstname.lastname@example.org) for record retention.
Contracts Involving Use or Purchase of Technology. All contracts involving the use or purchase of technology (including information systems, software, and physical devices) must be reviewed and approved by the Chief Information Officer prior to contract execution.
Contracts Involving Use or Purchase of Facilities, Furniture, and Campus Spaces. All contracts that require use of specific campus spaces or facilities (other than where the signatory has exclusive control over the proposed space or facility), or involve the use or purchase of furniture, must be reviewed and approved by the Director of Facilities prior to contract execution.
Mandatory Provisions. All contracts must contain adequate protections for the College and its students, faculty, staff, and trustees. The following provisions are mandatory and must be addressed in every contract. See the College’s internal Templates for a list of the College’s standard contractual terms and complete contract templates.
- Insurance: The College requires certain levels of insurance coverage to be provided by other parties contracting with the College, and requirements may vary based on the type of work, level of risk to the College (including buildings and people), and value of the contract. The standard insurance requirements for contracting parties, which the College requires at a minimum, are available in the Standard Terms (Oxy Only) provided on the Templates page.
- Indemnification: The College requires that contracts protect the College from liability based on the contracting party’s negligent acts or omissions or willful misconduct.
- Independent Contractor Status: Contracts that involve hiring a person or entity, other than for employment, must include a provision designating the other party as an independent contractor. (Refer to Independent Contractor Agreements section).
- Governing Law and Venue: Contracts must specify that the laws of California shall govern the contract and that venue shall be established in Los Angeles County or the United States District Court for the Central District of California.
- Default: Contracts must specify what would constitute a default or material breach and (where applicable) the manner and length of notice and opportunity to cure.
- Term/Termination: Contracts must specify the (1) term / duration of the contract and (2) the method of termination, including whether notice and/or cause are required.
- General Terms: In addition, all contracts must contain certain terms, including those regarding integration (“entire agreement”), severability, written modifications, non-assignment, force majeure, authority to enter agreement, and execution in counterparts. (Refer to list of Standard Terms (Oxy Only) on Templates page).
Mandatory Exclusions. It is against College policy for a person to enter into a contract containing the following terms, except with express approval from the Business Office or General Counsel:
- Automatic Renewal. Automatic renewal of a contract upon expiration of the initial term is not permissible, without express approval and a program to monitor the renewal option before expiration of the contract.
- One-Way Indemnification Benefitting Only Non-College Party. Indemnification clauses that protect only the contracting party are against College policy.
- Limitation of Non-College Party’s Liability. Limiting the College’s ability to recover for losses, damages, fees, injuries, etc. is not permissible.
- Liquidated Damages. Provisions awarding liquidated damages to the other party are not permissible.
Other Provisions. The following provisions will apply to most contracts and should typically be addressed, consistent with this Policy and the Standard Terms provided on the College’s Templates page.
- Applicability of College Policies against Discrimination, Harassment, and Retaliation
- Protection of Trade Secrets and Confidential Information
- Distribution of Intellectual Property Rights
- Forum for Resolution of Disputes / Arbitration
Legal Review. If a contract includes provisions that are irregular or pose a substantial risk to the College, the General Counsel should be contacted to ensure the contract protects the College and is consistent with applicable law.
The College offers Standard Terms (Oxy Only) as well as complete Templates for certain types of regularly occurring agreements, which are linked on this page. These templates comply with College policies and best practices and may be used to help ensure compliance with this Policy. These templates are updated frequently: each time you use a template, you should download the most recent version. Do not reuse old versions of templates or completed contracts.
In addition to the Chair of the Board of Trustees and the President of the College, the Chief Operating Officer, Vice Presidents, and other officers may act as Designated Agents of the College, to the extent annually authorized by the Board of Trustees. Such Designated Agents have authority to sign legal documents consistent with the By-Laws and this Policy. Authority to sign legal documents has no bearing or implication on the College’s budgetary process. Designated Agents, and any approved delegates, are required to ensure any contract obligations created by their actions fall within their approved budgets.
Delegations. Designated Agents may delegate their authority to up to four other employees ("Delegates") to sign legal documents on the College’s behalf if, and only if, all of the following conditions are met:
- A delegation of authority must be in writing and approved by the Chief Operating Officer.
- A delegation must specify the scope and limitations of the authority delegated, including (a) maximum dollar value; (b) duration; and (c) subject matter.
- Maximum dollar value shall not exceed $30,000.
- Duration shall not exceed either one year or the period of a Delegate’s appointment to the position held at the time of delegation (if longer).
- Subject matter must be consistent with the roles and responsibilities of the employee to whom authority is delegated.
- The Delegate must fully review this Policy and agree to abide by the provisions herein.
- No Delegate may further delegate their authority to another person.
Contracts that commit the College to a financial obligation exceeding $30,000 or duration of more than one year must be signed by a Designated Agent and cannot be delegated. In addition, any contracts that would commit the College to a financial obligation of $50,000 or more must be signed by the Chief Operating Officer.
Responsibilities of Signatory
The person(s) signing a contract on the College’s behalf is responsible for:
- Reviewing this Contract Policy and understanding the requirements herein
- Utilizing (when applicable) the Contract Review Checklist, Independent Contractor Worksheet, and any relevant Templates when initiating a contract or when reviewing a contract generated by another party
- Modifying the contract (always in "track changes") to conform to this Policy and applicable checklists and templates, to the best of your ability
- Elevating any remaining questions to the General Counsel and/or Business Office (email@example.com) for review, at least 14 days before the effective date of the contract
- Consult with the Business Office on questions involving payment terms, invoicing, tax implications, and related issues
- Consult with the General Counsel on all other questions
- Ensuring that all required reviews and approvals have been obtained before making any contractual commitment
- Ensuring the funds necessary for the contract have been allocated or are available within the departmental budget
- Ensuring that the contract is executed by both parties through either handwritten (scanned or photographed copies are acceptable) or verified electronic signatures (DocuSign, Adobe E-signatures, or similar)
- Confirming that the contract complies with Occidental’s policies governing potential conflicts of interest (see Staff & Administrator Employee Handbook; Policy on Conflict of Interest Related to Sponsored Projects; Conflict of Interest Policy for Trustees, Institutional Officers and Key Employees)
- Providing a copy of the completed contract to the Business Office
Independent Contractor Agreements
In California, a worker is presumptively an employee unless the hiring entity demonstrates otherwise. Due to recent changes in California law, a new test was established to determine whether a worker may be classified as an independent contractor. This section outlines Occidental College’s policy and procedures for securing the services of an independent contractor, where such services may not readily be provided by existing Occidental personnel within the scope of their employment. Generally, current students are not permitted to work as independent contractors; any exceptions must be approved in advance by the Office of the General Counsel.
A. Process for Determining Independent Contractor Status
Independent contractor agreements must (1) be in writing, (2) comply with this policy and California law, and (3) be approved by the Business Office. Before entering into any services contract or allowing services to be performed by an independent contractor, the hiring department must complete the Employee / Independent Contractor Worksheet and submit the materials requested therein to the Business Office at firstname.lastname@example.org for review. For certain narrow categories of independent contractors (see Pre-Approved Independent Contractors below), the department may simply provide the contract and an invoice to the Business Office for approval and payment and skip the step of completing the worksheet.
Independent contractors are not permitted to start work for Occidental until the review process described above has been completed. The hiring department should initiate this process at least 14 days before the work is scheduled to begin, to allow time for review. Misclassification of an independent contractor may subject the College to penalties, injunctive relief, and other remedies, and violation of this policy may result in discipline.
Before executing a contract for services or allowing any independent contractor services to be performed, the hiring department must confirm that an independent contractor relationship exists in accordance with AB 5, AB 2257, and other applicable law. The department will complete the Independent Contractor Worksheet and submit it to the Business Office at email@example.com. The Business Office will work with you to make the determination as to (1) whether the services may be performed by existing Occidental personnel within the scope of their employment, (2) whether a contractor relationship exists and, if not, (3) whether the individual needs to be hired by the college as an employee to perform the work. In order to determine whether an individual should be hired as an independent contractor or an employee, the Business Office will work with you to apply the appropriate test below to determine a worker’s status.
i. Pre-Approved Independent Contractors
For the following types of contractors—and where the proposed independent contractor is not otherwise a College employee and is not subject to the College’s supervision or control in the performance of work—the hiring department does not need to complete the Independent Contractor Worksheet. You may simply submit a proposed contract and invoice for these services to the Business Office for approval and payment:
- Businesses which are "C Corporations" (often indicated by the use of "Inc." or "Incorporated" in the business name - refer to the contractor's W-9 to determine the corporate type)
- Guest speaker or lecturer, when providing services during a period of 1 week or less
- Note: This does not include those speakers who are receiving an honorarium in place of consideration for the speaking engagement. Speakers receiving an honorarium are instead covered by the Honorarium Policy.
- Article reviewer/editor or content contributor to an journal, book, or other academic publication (for one-time or occasional contributors)
- Technical/class demonstrator, when providing services during a period of 1 week or less
- Sports referee
- Certain service providers who are hired for a single-engagement event: (1) sole proprietors or independent business entities, (2) performance artists, and (3) musicians (other than for recording or theater production). "Single-engagement event" means a stand-alone non-recurring event in a single location, or a series of events in the same location no more than once a week.
ii. ABC Test
In most cases, the Dynamex / “ABC” test will apply to determine whether a person may provide services to the College as an independent contractor. The hiring department must confirm that all three factors of the ABC test are met, or that the proposed services are subject to an exemption under AB 5 or AB 2257
To meet the ABC test, the College signatory must confirm that:
A. The person is free from the control and direction of the College in connection with the performance of the work, both under the contract for the performance of the work and in fact;
B. The person performs work that is outside the usual course of the College’s business; and
C.; The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
If any one of the factors above is not satisfied, and no exemption applies, then the person providing services must be hired through the normal process established by Human Resources and paid via payroll.
iii. Borello / “Economic Realities” Test
The following situations are generally exempt from the ABC Test, and the Borello test will apply, as described below.
- Professional Services Contracts, including:
- Services for marketing, human resource administration, graphic design, grant writing, and fine art;
- Services provided by a photographer, photojournalist, videographer, photo editor, digital content aggregator, freelance writer, translator, editor, copy editor, or illustrator (unless the worker primarily works at Oxy or is directly replacing an existing employee);
- Services provided by a content contributor, advisor, producer, narrator, or cartographer for a journal, book, periodical, evaluation, other publication or educational, academic, or instructional work in any format or media (with certain restrictions); and
- Services provided by a licensed real estate appraiser
- Business-to-business contracting relationships, where the business service provider is formally registered as a business entity (e.g. corporation, LLC, sole proprietorship) and is not an individual, and where the provider is free from the control/direction of Oxy, provides services directly to Oxy, maintains a separate business location, can negotiate its own rates, and sets its own hours and location, among other things.
- Services for the creation, marketing, promotion, or distribution of sound recordings or musical compositions, including for the services of: recording artists, songwriters, lyricists, composers, musical engineers, musicians, etc.
- Services Provided by Certain Types of Professionals:
- Musicians or musical groups engaged for a single-engagement live performance event;
- Individual performance artists;
- Insurance brokers, securities broker-dealers, and investment advisers;
- Licensed professionals, including lawyers, physicians, architects, landscape architects, engineers, private investigators, and accountants;
- Competition judges with specialized skills, including amateur umpires and referees
For these exempt categories of services, the Borello / “economic realities” test will be applied to determine independent contractor status. The Borello test requires the employer to consider multiple factors in determining a person’s status, including:
- Whether the hiring entity has the right to control the details of the work, or the manner and means of accomplishing the work;
- Whether the worker holds themselves out as being engaged in an occupation or business distinct from that of the hiring entity;
- Whether the work is a regular or integral part of the hiring entity’s business;
- Whether the worker has invested in the business, such as in the equipment or materials required;
- Whether the service provided requires a special skill;
- The kind of occupation, and whether the work is usually unsupervised or done under the hiring entity's direction;
- The worker’s opportunity for profit or loss depending on their managerial skill;
- The length of time for which the services are to be performed;
- The degree of permanence of the working relationship;
- The method of payment, whether by time or by job;
- Whether the worker hires their own employees;
- Whether the hiring entity has a right to fire at will; and
- Whether the worker and hiring entity believe they are creating an employer-employee relationship.
Under this multifactor test, no single factor controls the determination, and the relationship instead depends on the “circumstances of the whole activity.”
B. Template for Independent Contractor Agreements
The College has generated a template that hiring departments may use to engage the services of an independent contractor, which is available on the Templates page.
An honorarium is a one-time payment, which should generally be a nominal amount, granted in appreciation of an individual’s voluntary special service. Honorarium payments are typically associated with guest lectures, workshops, research, and participation in panel discussions, and may be paid to persons of scholarly or professional standing in conjunction with an academic activity. Payment of an honorarium is at the College’s discretion and does not involve a contract, purchase order, or invoice. If a particular payment amount is agreed upon, this constitutes a contractual agreement and should not be treated as an honorarium.
Stakeholders wishing to pay for a speaker's travel, lodging, or other expenses in addition to providing an honorarium should obtain a signed Speaker Agreement (see the Contracts Template page) in advance of the speech/presentation. In most cases, these expenses should be included in the flat rate speaker fee, rather than reimbursed. (E.g. where a speaker will receive a $400 honorarium and anticipates $300 in travel and lodging expenses, the agreement should state that the speaker will be paid $700, inclusive of all expenses).
Honorarium payments may not be issued to business owners, partnerships, sole proprietors, independent contractors, consultants, performers, actors, entertainers, models, artists, or temporary or casual laborers. The College employee facilitating an honorarium payment must submit a check request with any other supporting documentation such as a flyer or email announcing the individual’s participation in a speaking event, workshop or panel discussion to the Business Office for payment.
Honorarium payments are considered income and must be reported to the Internal Revenue Service and Franchise Tax Board. All necessary tax documents (typically a Form W-9) will be collected from the payee to determine appropriate tax application. Honorarium payments over $600 are reported to the speaker and the IRS using Form 1099-MISC. Honorarium payments are in lieu of reimbursement for any travel expenses or any other payment of fees.