Vendor Policies

Apereo Foundation: Vendor Policies


The Apereo Foundation vendor policies are intended to provide guidance on whether services fall into employment or vendor relationships, further define vendors and invoice requirements, and tax documentation requirements.

The Apereo Foundation does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consult your tax, legal, and accounting advisors before engaging in any transaction.

Employee vs contractor


To provide a policy to determine whether a service provided to the Apereo Foundation is done by an employee or a contractor.


In general, if control falls to the Apereo Foundation, an individual is an employee. If the individual is independent, they are an independent contractor.

In determining employee vs. contractor status, the Apereo Foundation considers the following criteria:

  1. Does the Apereo Foundation control or have the right to control what the worker does and how the worker does his or her job?
    1. Independent contractors decide for themselves how and where they work, and what tools should be used to complete the work. They assume the risk for their own profit/loss on a project.
    2. The Apereo Foundation has the right to control employee’s work and conducts regular reviews of employee performance to ensure that the work product is following management’s expectations.
  2. Are the business aspects of the worker’s job controlled by the Apereo Foundation? (these include things like how the worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
    1. Employees are salaried or hourly employees paid bi-weekly by the Apereo Foundation.
    2. Independent contractors are paid on a contract basis with the frequency of payment set by the contract.
    3. Employees are reimbursed for expenses and are provided supplies for completing work.
    4. Independent contractors are responsible for their own expenses and must provide their own tools and supplies. In some cases, direct expenses as determined in the contract, such as travel, may be reimbursed by the Apereo Foundation and not affect the contractor’s status.
  3. Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)?
    1. Prospective hires are given an offer letter providing general terms of employment including annual salary, benefits eligibility, and start date.
    2. The Apereo Foundation assumes responsibility for worker’s compensation insurance, unemployment insurance, and any employer federal or state payroll taxes for employees. The Apereo Foundation is not responsible for paying employer taxes for contractors. However, if the contractor is a non-US national, then the Apereo Foundation may be responsible for withholding and remitting taxes to the IRS.
    3. The Apereo Foundation’s general liability insurance policy covers all employees and contractors who are performing business on the Apereo Foundation’s behalf and is not considered an employee benefit.
  4. Will the relationship continue and is the work performed a key aspect of the business?
    1. Employees are generally hired for an undetermined length of time. Independent contractors are generally hired for a predetermined length of time and for a specific project or projects as stated in their contract.
    2. Work that is a key aspect of business should not be contracted out and should be performed by an employee.

law in California limits the work a contractor can do for a company. Work that is in a company’s normal course of business cannot be contracted out. Additionally, contractors cannot be hired for more than 35 individual projects during a year.

Form SS-8

If, after reviewing these categories of evidence, it is unclear whether a worker is an employee or an independent contractor, Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, can be filed with the IRS. The form may be filed by either the business or the worker. The IRS will review the facts and circumstances and officially determine the worker’s status.

Vendor Definition

Vendors include various legal entities that provide goods and services to the Apereo Foundation. Typical legal entities include individuals/sole proprietors, S-Corporations, C-Corporations, partnerships, and LLCs.

Vendors include legal entities that are paid for invoices or independent contractor agreements, as well as awards and honorariums.

For more information about the tax documentation and implications for various types of vendors, see the Vendor Tax Documents section.


The Apereo Foundation generally requires an invoice in order to process a vendor payment unless a fully-executed letter of agreement or contract provides payment information. Invoices should be submitted by email to within 5 days after the end of a calendar month.

Invoice Contents

Invoices should contain the following information:

  • Vendor name
  • Vendor address
    • street, city, state/province, postal code, country
  • Invoice date
    • MUST BE within the same month the work was completed
  • Invoice number
  • Payment terms
  • Description of goods or services provided
  • Amount of the invoice and currency (such as “USD” for US dollars)
  • Form of payment desired and related payment instructions

Invoice Example

free invoice template can be found here.

Payment Terms

Payment terms are defined as the number of days an invoice is due after the invoice date or an event specified by a contract or letter of agreement.

If an invoice does not include payment terms and/or the invoice due date is not specified by a letter of agreement or contract, the Apereo Foundation assumes the following payment terms from the invoice date:

  • 7 days for grants and awards
  • 15 days for individuals
  • 30 days for organizations

All invoices must be approved and complete tax documents submitted before payment is issued.

Please contact the Apereo Foundation accounting team with any questions about payment terms.

See: Payment Options for Vendors

Approval Process

All invoices must be approved before payment is issued.

Grants, including financial aid, awards, and honoraria, are approved in advance.

Invoices related to software development or user experience must be approved by the appropriate project manager; project managers are encouraged to approve invoices within 7 days of receipt. All other invoices, including project management, must be approved by a Apereo Foundation employee. The Apereo Foundation accounting team currently acquires approval using an electronic signature software or email.

OFAC Sanctioned Countries

The United States Office of Foreign Assets and Control (OFAC) publishes lists of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. The US government prohibits US citizens, US-based entities and US branches of foreign companies from doing business with countries or parties on these lists. The lists include individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. The Specially Designated Nationals (SDN) list contains names of individuals, banks, businesses, etc. that have been blocked from doing business in the US. OFAC lists change often and are published on OFAC’s site.

The Apereo Foundation complies with OFAC regulations to avoid both civil and criminal penalties. Before the Apereo Foundation accounting team adds new vendors to its system, the Apereo Foundation checks the OFAC lists to confirm that the new vendor is compliant. Non-compliant vendors will not be issued reimbursements, grants, or other payments.

Vendor Tax Documents

In order to receive payment for a service, the Apereo Foundation requires complete tax documents to be submitted by mail to Tax document requirements vary depending on where the vendor resides, the type of legal entity the vendor uses, and whether the vendor has a US tax identification number.

All vendors receiving payment from the Apereo Foundation are required to provide one of the following completed tax forms:

  • W-9: for domestic individuals and organizations
  • Form 8233: for foreign individuals with a US TIN
  • W-8BEN: for foreign individuals without a US TIN
  • W-8BEN-E: for foreign organizations

Please contact the Apereo Foundation accounting team if you have questions about tax documents and we will try to assist you.

Tax Withholding for Contractors

Domestic Individuals and Organizations

Tax Withholding

Payments made to domestic individuals and organizations are not subject to tax withholding by the Apereo Foundation.

Form 1099

The Apereo Foundation issues one Form 1099 per vendor by January 31 of the year after vendor payments are made. The Apereo Foundation sends Form 1099 by physical mail; vendors may opt in to receive the form by email.

Payments reported to vendors on Form 1099 may be taxable; please consult your tax advisor and refer to the IRS’s 1099 page for more information.

Foreign Individuals and Organizations

Tax Withholding

Payments made to foreign individuals are subject to 30% US federal tax withholding, unless all of the following conditions are met:

  • The vendor’s country of residence has a tax treaty with the US.
  • The vendor has a US tax identification number, such as an EIN, SSN, or ITIN.

Foreign vendors may claim lowered or reduced US federal withholding rates if a tax treaty exists between their country of residence and the United States.

  • First, the vendor must determine whether the US has a tax treaty with the foreign vendor’s country of residence using the current list of US tax treaties.
  • Second, the vendor must determine whether the tax treaty applies to services provided to the Apereo Foundation.

Please refer to IRS summaries of available tax treaty benefits here or Publication 901 (US Tax Treaties) for additional information.

  • US tax identification numbers include the Employer Identification Number (EIN), Social Security Number (SSN), or Individual Taxpayer Identification Number (ITIN).
Obtaining a US ITIN

A US ITIN is a 9-digit number issued by the U.S. Internal Revenue Service to individuals who do not have and are not eligible to get a US EIN or SSN.

Generally, all foreign individuals claiming reduced withholding under an applicable income tax treaty must have an ITIN (see Regulations section 1.1441-1(e)(4)(vii)(A)). Also see Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.

Foreign individuals may obtain a US ITIN by completing Form W-7. This form is filed with the US IRS by mail, through acceptance agents, and other methods. For more information, see the W-7 instructions.

Exceptions to US TIN requirements

To qualify for the substantial presence test, the Apereo Foundation as withholding agent would be responsible for tracking a contractor's movements in and out of the United States for all Apereo Foundation and non-Apereo Foundation projects for two years. This is an undue burden on both the Apereo Foundation and the vendor and cannot be projected at the time the payment is made, so the Apereo Foundation does not allow this exception to be used to avoid US federal tax withholding.


Please consult a tax expert for the best option for you. Below are two common approaches:

  • Foreign individuals may file a tax return with the United States Internal Revenue Service after the end of the year the payment was made. All US income must be included in the annual tax return.
  • Foreign individuals may be able to apply for a credit for taxes paid to the US if the income was also taxed by the vendor’s country of residence.

The Foreign Account Tax Compliance Act (FATCA) is a United States Federal Law intended to improve tax compliance.

Payers such as the Apereo Foundation must:

  • Have procedures to categorize foreign payees and identify payments that are subject to withholding.
  • Have procedures to report and withhold tax from payments that are subject to withholding.
  • Receive appropriate documentation, such as forms W-9, 8233, or W-8 series, to verify the payee’s FATCA status.

Form 1042-S

The Apereo Foundation issues one Form 1042-S per vendor by March 15 of the year after vendor payments are made. The Apereo Foundation sends Form 1042-S by email and will send a physical copy if requested by the vendor.

Payments reported to vendors on Form 1042-S may be taxable; please consult your tax advisor.