Payroll Compliance

Scope

This policy applies to all Indiana University units and employees. 

In the event of a conflict, this policy shall supersede all campus, school and college, program, department, center, institute, and unit policies on any core or regional campuses of Indiana University.

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Policy Statement

It is the policy of Indiana University to ensure that all employees are paid timely and accurately in compliance with applicable laws and regulations. All compensation for services rendered by employees must be processed and recorded through the university’s official payroll and timekeeping systems.  

The Office of the University Controller (UCO) has established the IU Accounting Standards, which detail procedures that support compliance and controls to ensure timely, accurate payment to employees. These procedural standards, while not exhaustive, are mandatory and must be followed for all payroll-related activities.  

Special Considerations  

• Additional employment and payroll restrictions may apply to U.S. citizens and permanent residents working internationally, nonresident aliens and, employees living and working in states other than Indiana. 

• Payments to individuals who will be paid as independent contractors and meet the criteria as defined in policy FIN-ACC-630 must be processed through the university procurement system. 

• This policy does not govern employee compensation levels or university benefit programs, which fall under the direction of University Human Resources. Compliance with human resource policies and procedures is essential to ensuring timely and accurate payroll processing.

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Reason for Policy

Timely and accurate payroll is critical to IU employees and comprises the university’s largest operating expense. Payroll is subject to extensive state and federal regulations, which requires significant compliance oversight. As a vital function of the university, strong internal controls—particularly segregation of duties—are essential to mitigate risk and prevent fraud.

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Additional Contacts

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History

This policy was established in 2017.

Substantive revisions on November 18, 2025. This policy replaces policy FIN-PAY-010.

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