U.S. Citizen Non-Employee Payments

Transcription

1 U.S. Citizen Non-Employee Payments 1 Tuesday, September 25, 2018, 9:00am 11:00am MEB Library Computer Lab

2 Disclaimer 2 This presentation only covers U.S. Citizen Non-Employee payments Generally, payments to these individuals do not involve IRS reportability. This presentation does not cover: Foreign and Student Non-Employee payments Payments to these individual types involve IRS reportability and additional requirements which may vary on case-by-case basis. UH and RCUH Employee reimbursements KFS: Process on Disbursement Voucher RCUH: Process on Authorization for Payment Please consult with your Fiscal Administrator on all non-employee payments from inception to completion.

3 Goals: To understand 3 Examples of Non-Employee Payments Classification of Individuals Definitions of Non-Employee Payment Types Required Documents Workflow Processing: KFS Requisition Format KFS Vendor Record Setup

4 Examples of Non-Employee Payments 4 Interviewee External Advisory Committee Review Accreditation Review Guest Speaker Lecture Research Study Participant Incentive Payments UHP (University Health Partners) Employee Reimbursements Alternative: Use PCard/PO to purchase supplies.

5 Policy/Procedure References 5 U.S. Dept. of Treasury IRS Pub. 15-A UH / RCUH UH AP RCUH P&P 3.225

6 Employee, Non-Employee, & Independent Contractor (EIC) Review 6 Question What is this? Why is this important? How is this accomplished? Answer UH/RCUH must properly classify individuals, who receive payment, in one of three categories: 1) Employee 2) Non-Employee 3) Independent Contractor For IRS Tax considerations. Misclassifying an individual exposes UH/RCUH to liability as well as financial penalties, including back-payment of employment taxes (e.g. workman s comp, unemployment insurance, etc.). UH: Submit memo and UH Form 78 (Independent Contractor Questionnaire) to UH System OHR in accordance with AP 8.230, unless individual qualifies under one of the approved exceptions. RCUH: Submit Request for EIC Determination at least 7 working days prior to event to RCUH HR in accordance with P&P 3.225, unless a Master EIC is applicable.

7 UH Exceptions & RCUH EIC Masters/Templates 7 Individual Type UH RCUH Exception Memo + Form 78 UH System OHR Master Template RCUH HR Independent Contractor X 1 X 2 Guest Speaker X X 2 Non-Compensated Project Support X Research Study Participant X 3 X Special Duty Police Officer X X 1. Refer to Exception List. If particular Independent Contractor is not listed, submit Memo + Form 78 to UH System OHR for a determination. 2. Request EIC Determination from RCUH HR no later than 7 working days prior to event. No retroactive EIC Determinations will be granted. If you re unable to get an EIC determination in time, process thru UH (KFS). 3. Submit Memo + Form 78 to UH System OHR for a determination.

8 Definitions of Employee, Non-Employee, & Independent Contractor 8 Employee Non-Employee Independent Contractor Definition / Keywords Control what and how it will be done No control/supervision Payment Method Hire through HR office UH: Requisition RCUH: Non-Employee Expense Payment Form (reimbursement) or Requisition (advance) Payment Type(s) Wages / Salary Compensation Fee for Service Honorarium Reimb. Travel Exp. Only direct what will be done, not how it will be done Requisition Fee for Service Subject to procurement source selection procedures? No, but follow applicable recruitment procedures Yes, but only Fee for Service portion Yes

9 Definitions of Non-Employee Payment Types 9 Honorarium Fee for Service Reimb. Travel Exp. Definition Nominal payment to confer distinction on or to demonstrate respect, esteem or admiration for the non-employee Payment in exchange for services, e.g. guest lecture, external advisory committee review, etc. Payment to reimburse travel related expenses, e.g. airfare, lodging, M&IE, car rental, etc. Things to Consider Not a payment for service, e.g. guest lecture, external advisory committee review, etc. If greater than thresholds below, then process in accordance with procurement source selection procedures, e.g. Exemption #21 + Cost Price Reasonableness Form Two options: 1. Receipt Method: Non-Employee provides receipts to substantiate expenses. 2. Lump Sum Method: Non-Employee receives a lump sum payment. No receipts needed. Dollar Amount UH: <$500 RCUH: <$750 UH: <$2,500 RCUH: <$10,000 Federal Allowable Rates & other employee CBU guidelines Object Code Receipt Method: Respective object code(s) 2. Lump Sum Method: 4541 (US Citizen) Reportable JABSOM to Office Yes of Central Fiscal & Human Resources Yes No: Receipt Method IRS? Yes: Lump Sum Method

10 Documents for Non-Employee Payments 10 Document Completed By Purpose Comments / Tips WH-1 Non-Employee Establishes vendor record in financial system Only needed if non-employee does not have an existing vendor record Letter of Invitation Event Announcement EIC Determination Federal Allowable Rates Principal Investigator, Department Chair, or Executive Along with purpose, agenda, and business dates of visit, authorizes expenses to be covered Required by UH Disbursing for payment Department/Program Supports Letter of Invitation Flyer/Agenda/ acceptable Department/Program HR Office properly classifies individual Only needed if individual does not qualify for an Exception (UH) or Master EIC (RCUH) Department/Program Supports M&IE calculations (if M&IE is being offered) Available on DOD website: Non-Employee Invoice Non-Employee and Department/Program Summarizes all expenses to be paid Obtain Non-Employee s signature while they are here. Fill in amounts after receipts are received (if utilizing Receipt Method). RCUH: Not needed if using the Non-Employee Expense Payment Form (reimbursement). Receipts Non-Employee Substantiates expenses to be reimbursed Only needed if utilizing Receipt Method

11 Letter of Invitation 11 Addresses: Who? What? When? Where? Costs? Name, Title, and Affiliation of Non-Employee Role of Non-Employee in the Event Dates of Event Location of Event Costs to be covered for Non-Employee Reimbursement/Payment guidelines: Unlike employees, non-employees are not subject to collective bargaining union (CBU) agreements, i.e. they can be paid as much or as little as department/program deems reasonable. As a suggested guideline, employee CBU standards, e.g. Federal Allowable Rate, should be applied to the non-employee s payment. Alternatively, departments/programs may set lower fixed rate amounts.

12 Non-Employee Payments Workflow 12 Dept/Prgm HR Acct Sup/PI Fiscal Disbursing Prepare docs UH: Generate KFS Requisition RCUH: Generate Non- Employee Payment Form (reimbursement) or Requisition (advance) UH: Review Memo + UH Form 78 (or Exception) RCUH: Review Request for EIC Determination (or Master EIC) Classify individual as Non-Employee Review and approve transaction Review and approve transaction UH: Issue KFS PO RCUH: Issue RCUH PO (advance) [Dept/Prgm: Generate PO Payment] UH: Review, approve, and process check payment RCUH: Process check payment

13 Research Study Participant Incentives 13 UH: Disbursement Voucher (Cash Advance) Memo to UH Disbursing Memo to UH System OHR Maintain disbursement log Collect and maintain WH-1s RCUH: Petty Cash or Requisition Master EIC Non-Employee Research Study Participant Maintain disbursement log Collect and maintain WH-1s

14 KFS Processing: Requisition Format 14

15 KFS Processing: Vendor Record Setup 15 Vendor Record Setup See excerpt from manual

16 Questions? 16 Thank you for attending! Please complete an evaluation form before you leave. Mahalo!