TRS 'Full Payroll' rules require Reporting Employers (REs) to provide monthly reports on eligible and ineligible employees via the Regular Payroll (RP) report, and all TRS Retirees on the Employment After Retirement (ER) report.
To clarify TRS reporting requirements related to Independent Contractors, consider the following guidelines to help you determine whether an individual is an Independent Contractor and whether they should be reported to TRS.
Independent Contactor Guidelines & FAQs
An independent contractor is typically an individual who is retained by the RE to perform a service or complete a project.
- under the day-to-day control of the RE (duties for a position that are established in employer policies, laws and/or rules indicate that the person is under the day-to-day control of the reporting employer);
- required to keep “office hours” or “work hours” as does an employee (teaching a class or meeting with students at an established time is considered keeping “work hours”);
- utilizing the RE’s facilities, equipment, or materials to perform services; or marketing their services to only one employer.
- Positions such as superintendents, principals, assistant principals, teachers, administrators, and coaches cannot be considered as independent contractors. Simply changing a position’s title to include any form of “independent contractor” doesn’t suffice for classification.
REs should seek advice from their own legal team to determine if the arrangement is an independent contractor or employee.
A TRS retiree and employer must carefully assess whether their work arrangement as an independent contractor meets all the legal criteria for this type of relationship. Federal income tax and social security laws play a role in determining whether a retiree is an independent contractor.
In some cases, TRS can review the contract between the retiree and employer to determine Independent Contractor in relation to Employment After Retirement.
If a TRS Retiree is employed by third-party entity to perform duties related to employment by a Texas public education employer, they are subject to the Employment After Retirement laws and rules. An RE and retiree should not rely on the name of the company or the work contract to determine if reported to TRS.
If an RE does not outsource 100% of the duties or services of a position, the retiree must be reported on the ER report, subject to Employment After Retirement (EAR) laws and rules.
If the TRS retirees perform work as an independent contractor or volunteer for a TRS-covered employer during the first 12 consecutive[1]calendar months after their effective retirement date and that work would normally be done by an employee, they will be considered an employee instead of a volunteer or independent contractor. This means their work will be subject to the EAR restrictions.
Please reach out to your RE Coach if you need assistance.
Independent contractors (non-TRS retirees) are not reported on Employee Demographic (ED) or Regular Payroll (RP) reports.