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Independent Contractors - Stateside

In January of 2020, Assembly Bill 5 (AB5) was passed into law, changing the way independent contractors are categorized and paid.    The Independent Contractor form for the state side listed on the Accounts Payable website has been removed as it is no longer valid.   The following is a guideline for all independent contractor payments.  For detailed information, please refer to Human Resources at this link: 

Human Resources Review

Since the introduction of AB5 in January, a change to the independent contractor process has occurred.  Effective immediately, all requests for independent contractors on the state side need to go through Human Resources for review.  They will determine whether or not the worker can be categorized as an "independent contractor".   

Workers Determined to be Independent Contractors

If Human Resources determine that the worker may, indeed, be categorized as an independent contractor, they will forward the documentation to Procurement.  The requesting department will need to request a standard requisition in order for Procurement to generate a Purchase Order (PO).  For detailed information, please contact Procurement and Contracts at or 909.537.5142.

Independent Contractor Requirements

Performance of Work

No work is to be performed by the worker until a review by Human Resources has been completed and a valid Purchase Order has been rendered and formally accepted by the independent contractor and the University. 

Tax Reporting

Note that in most cases, independent contractors are subject to tax reporting at year-end.   A current 204 form is required before payment will be released.  If the worker is a foreign national or entity, there may be additional tax certifications and treaty analysis that must occur prior to engaging with the independent contractor.


Nonresident Withholding - The Franchise Tax Board requires 7% withholding from California source income paid to nonresidents of California if total payments are greater than $1,500 per calendar year.  Nonresident independent contractors, (those who reside outside California) submitting invoices for payment are required to identify amounts considered California source income.  Invoices failing to specify this information may result in withholding errors and may be returned to the independent contractor for revision.  Alternatively, suppliers may submit a completed California Form 587 to allocate income or certify that payment is not reportable income.  Click this link, then choose to search forms online at the Franchise Tax Board website.  Enter “587” in the forms menu: California Franchise Tax Board Form 592 will be issued to independent contractors for whom State tax withholding has occurred.

Non-resident alien (NRA, aka foreign) independent contractors are handled on a case-by-case basis, as visa status and specific country treaties must be taken into account to determine tax withholding percentages. If you have any questions regarding NRA tax withholding, please contact the NRA Accountant in Accounting Services at 909.537.7575.

Entity Type

The regulations outlined by AB5 does not distinguish between individuals, partnerships or corporations as to the determining factor of independent contractor status.  All workers, regardless of business entity type who provide independent contractor services to the University must be vetted through Human Resources in order to be categorized an "independent contractor". 

Billing Requirements  

In order to pay the independent contractor, the independent contractor must issue and present an invoice for payment.  The university is specifically precluded from creating this invoice for, or providing a form for the independent contractor.  The independent contractor must render their own invoices.   As a courtesy, invoices templates may be found through a standard internet search or through the following link:


The invoice is to include a description of the services performed, the hourly rate or flat billing rate, the total amount billed, etc.  The invoice format is to include the payee or entity name, the remitting address as to where payment is to be sent, telephone number, email address and website address (if any).  The invoice should include an invoice number and the date billed.  The invoice must include the Purchase Order number as issued by the Procurement Department. 


All payments are made in arrears, meaning that all services must be performed satisfactorily before payment is issued.  Note that all payments will be mailed from the Accounts Payable Department directly to the payee.  Once the independent contractor has performed the services, the invoice may be submitted to Accounts Payable through one of the methods below. 

Invoices must be issued to the California State University, San Bernardino

  • Email:   Send a PDF of the invoice to Please include all attachments and supporting documents as a single attachment. 
  • By US Mail:  Invoices are to be submitted directly to Accounts Payable at the following address:

California State University, San Bernardino

Attn: Accounts Payable, SH 105

5500 University Parkway

San Bernardino, CA 92407