A. SUMMARY
USNH departments must pay any individual for services provided through the USNH payroll system if they are currently an employee of USNH, or were an employee during the current calendar year. Applicable tax withholdings, overtime pay rates and fringe benefit allocations apply to each position.
B. SCOPE
USNH faculty, professional/administrative/technical staff, operating staff, student workers and all other employees are covered by this policy. It also applies to individuals at all levels who were employed by USNH in any capacity during the current calendar year. With limited exceptions as approved by the USNH Vice Chancellor for Finance and Administration, a USNH employee will be paid as an employee for all services provided to any USNH campus.
C. EMPLOYMENT NEGOTIATIONS
Before engaging any individuals as service providers, each department must ask applicants if they are currently, or were at any time during the current calendar year, employed at any of the USNH campuses. The hiring department is responsible for confirming an applicant’s USNH employment by contacting their campus HR office. If the answer is yes, the individual is hired as an employee with all payments for services treated as wages paid through the USNH payroll system. The fact that services provided through one position are substantially different than another has no bearing on how payments for the additional position will be executed. Since it is likely that we already have an existing approved position doing similar work at another location, this process will ensure equitable treatment for the provision of similar services. While there is no maximum dollar limit on individual transactions of this nature, hiring departments must be cognizant of potential issues such relationships could cause with labor unions and/or the general public.
D. TIMING OF PAYMENT
Payment for services provided in the additional position will be paid when the hours/services are reported, as part of normal payroll procedures.
E. PROCESSED THROUGH PAYROLL
All payments for additional positions are paid through the Payroll system, taxable as additional or hourly pay, and follow all normal Payroll procedures. In short, an employee is always paid as an employee regardless of any difference in work assignments, campuses, or departments.
F. REQUIRED COMMUNICATION WITH EMPLOYEE
The hiring department is responsible for communicating information regarding these payments and their taxability to employees. To accomplish this the following paragraph should be included in the employment agreement or offer letter:
DISCLOSURE
All payments to you for services rendered to USNH will be made through the USNH Payroll system, net of applicable taxes and other withholdings. USNH will match applicable FICA withholdings for applicable employees and a single Form W2 will be issued each year. If the additional position increases your total USNH employment to more than 20 hours per week we recommend that you consult with the HR office at your campus regarding potential eligibility for certain USNH employee benefit programs.
G. EFFECTIVE DATE
This policy is effective 7/1/2019, for all payments made to USNH employees. Earlier application is encouraged.
H. ADDITIONAL GUIDANCE
1. Criteria for charges to sponsored programs:
(a) Must be “reasonable” and justified with written documentation prepared and maintained by the secondary hiring department, based on comparable industry or survey data for each individual employee; and
(b) Must be “allocable” for proportional benefit, according to the terms of the employee’s appointments. If any appointments are for work on USNH grant awards, please consult your campus sponsored programs office for assistance; and
(c) Must be “consistently applied” such that the average charges to federal funds are not materially and substantially higher than the amounts charged to other USNH funds; and
(d) The amount of each employee’s payments must adhere to the pertinent sponsor rules and regulations and to Uniform Guidance when federal funds are involved.
2. Pre-Approval requirements
(a) Prior approval by the campus Office of Sponsored Programs Administration is required for employee secondary payments, as with all other forms of additional pay when charges are proposed for USNH sponsored programs. (See USY V.F.7.2.2, USY V. F. 7.2.3, USY V. F. 7.4.1, UNH V. F. 7.4.2, UNH V. F. 7.3.5, UNH V. F. 7.3.6, UNH V. F. 7.4.1, and UNH V. F. 7.5.1).
3. References:
(a) Uniform Guidance § 200.463 Federal requirements related to recruiting costs
(b) https://www.usnh.edu/usnh-financial-services-policies-and-procedures/06-purchasing. See section 050 for information related to independent contractors.
(c) http://www.unh.edu/purchasing/independent-contractor.pdf. See page 3 for independent contractor’s determination checklist.
4. In the event that a current employment relationship is terminated during the fiscal year, but some services will continue to be provided to USNH by the individual through their own business entity, such changes should be made at the start of a new calendar year to limit possible tax consequences.
