Question

Statutory employee versus independent contractor versus employee

A University considers its adjunct professors to be employees, and as employees the University withholds employee taxes on earnings. Full-time professors, unlike the adjunct professors, pay into their own retirement system and not social security.

There is a private letter ruling which states online instructors should or could be considered statuary employees. A statuary employee is one that gets no taxes withheld other than social security and still receives a W-2. A statutory employee can then use Schedule C to deduct any expenses. The advantage of being a statutory employee is that the employee can then write off any expenses directly associated with teaching, including the cost of laptops, internet service, software and other expenses. In other words, a statutory employee would not be limited to the Schedule A limitation of deducting expenses that only exceed 7.5% of adjusted gross income.

The University does not make this distinction between statutory employee versus employee.

Share your thoughts on whether the University is treating its adjunct professors correctly. Share your thoughts on whether its adjunct professors (or anyone else that is doing work for the benefit of an organization on a part time basis) would be better off being treated as a statutory employee, employee or independent contractor.

Answer 1

An adjunct professor is a type of academic appointment in higher education. Also known as part-time or contingent instructors. adjunct professors usually have no benefits, and are paid by the course at about one-third of the rate tenured professor would receive.

Adjuncts are typically contracted to teach on a course by course basis but are considered W2 employees for tax purposes, so they don't ae to pay self-employment taxes on income earned. but because they aren't classified as 1099 independent contractors, adjunct cannot deduct te some of the cost associated with teaching, like printing, paper, pens, and home office space. The difference between 1099 workers are employed as independent contractors or freelancers, while W2 workers are employees of an institution.

Though there is a movement to classify adjuncts as a part of their paid work as independent contractors, the law as not changed and most often adjuncts are classified as W2 employees for tax purposes.

A statutory employee is an independent contractor who is treated as an employee for purposes of tax withholdings. For a standard independent contractor, an employer cannot withhold taxes. They are allowed a greater tax deduction for business expenses. it is not better to treat adjunct employees as a statutory employee.