Supplemental Payments for Services Provided Outside the Normal Scope of Employment

Scope

Policy applies to all people paid through the University payroll system.

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Policy Statement

In general, all payments for the compensation of services that are made to university employees will be treated as employee wages. This includes both amounts of base pay, as well as supplemental payments of compensation made to university employees for services that they provide to the university, which are outside the normal scope of their employee appointment. Refer to campus Human Resources policies or handbooks for guidance regarding allowable types of employment outside the scope of an employee's university job responsibilities.

In addition to supplemental payments for the performance of services, payments made to university employees for awards, such as outstanding teaching awards or other forms of employee recognition awards, will be treated as employee wages. In circumstances where an employee is given a choice between accepting a cash payment or having those funds directed into a university account, the tax law requires that the amount of the award be treated as employee wages, regardless of whether the employee elects to receive the cash or not.

Retired faculty or staff members will still be considered to be employees unless they provide evidence that he/she has an established trade, business, or professional entity having a tax identification number separate and distinct from the individual's social security number.

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Reason for Policy

To designate payment methods for services that employees provide to the university that are outside the normal scope of their employment, and to assist in avoiding any appearances of conflict of interest with respect to employment status.

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Procedures

1. Regular Payroll Voucher Process - overtime hours worked in an employee's department or in a secondary department are to be compensated for at a time and one-half rate, using the regular payroll voucher process, as noted below.
2. Biweekly/Supplemental Payroll Voucher Process - if the overtime hours are (a) worked in a department other than were the employee is normally employed, (b) the additional hours worked are of a sporadic and infrequent nature, and (c) do not exceed twenty (20) hours, the hours worked may be compensated at a straight time and one-half hourly rate by using the Biweekly/Hourly Supplemental Payroll Voucher.
3. Supplemental Payroll Voucher Process - if the additional work is of an academic nature (teaching, course development, direct research projects) and the employment contract states that the payment is to be a flat amount based on the completion of the task(s), the employee may be paid through the use of the Supplemental Pay Voucher.

FLSA-Exempt Employees Additional services of a temporary nature provided by FLSA-exempt employees are to be compensated by using the Supplemental Payroll Voucher. All such payments to employees will be subject to the normal tax withholdings and W-2 reporting, even if the employee voluntarily redirects or assigns those payments to research or development accounts through the Indiana University Foundation, or to other university accounts.

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History

This policy was established on August 1, 1996.

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