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Policy and Procedure ManualChapter 380, Personnel--General Responsible Department: Accounting and Financial Services This section outlines procedures for making honorarium payments and providing additional compensation for other types of activities outside the scope of an employee's regular responsibilities. Honorarium payments--An honorarium is a payment or an award granted to an individual in recognition of a special service or distinguished achievement for which custom or propriety forbids any fixed business price (e.g., hourly rate) to be set. Payments to persons governed by the Academic Personnel Manual (APM) are made in accordance with Section 666 of that manual. A. Within the University community the types of activities for which honorarium payments may be made include, but are not limited to: 1. A special lecture or short series of such lectures. 2. Conducting a seminar or workshop of no more than two-week duration. (If an employer-employee relationship exists, the payment must be processed through normal payroll channels. See II.B, below, and Section 380-70.) 3. A musical demonstration related to Music Department instruction. 4. A guest speaker at a commencement exercise or other similar function. 5. An appraisal of a manuscript for the University Press. (See APM Section 665.) 6. An appraisal of an article to be submitted to a professional publication. 7. Continuing Education of the Bar (CEB) authors and lecturers. 8. Distinguished teaching. B. The following activities cannot be compensated via honoraria. 1. Travel and living expenses Travel and subsistence expenses are authorized, reported, and reimbursed in accordance with University travel policies. (See Section 300-10.) 2. Performance fee payments Performance fee payments are made to individuals or groups for professional services not directly related to academic functions under the sponsorship of UC Davis Presents or similar campus nonacademic organizations. 3. Independent consultant An independent consultant is an individual not employed by the University of proven professional or technical competence who provides primarily professional or technical advice to the University and the University does not control either the manner of performance or the result of the service. (See Section 380-70.) 4. Independent contractor An independent contractor is an individual not employed by the University of proven professional or technical competence who provides primarily professional or technical advice to the University and the University has the right to control only the result of the service, not the manner of performance. See Section 380-05.) 5. Faculty consultant A faculty consultant is an individual who holds a faculty appointment and who provides specialized professional or technical advice to a UCD extramurally supported project or to a UCD activity supported from University funds. Such services must be extraordinary to the consultant's normal activities and responsibilities during his/her academic-year) or fiscal-year faculty appointment. (See APM Section 664.) C. The following University activities, covered in APM Sections 660 through 667, are other sources of additional compensation that may be paid to individuals holding faculty appointments. These activities are not appropriate for the payment of honoraria. 1. Summer Session teaching. 2. University Extension teaching. 3. University Extension correspondence courses. 4. Extramurally funded research. Generally, honoraria are paid to persons of scholarly or professional standing in conjunction with an academic activity. University employees are eligible to receive honoraria in accordance with the provisions of APM-666 (academic employees) or PPSM 30 and II-30 (staff employees). Individuals not employed by the University are also eligible to receive honorarium payments. Honoraria may be paid to foreign visitors in accordance with University policy and subject to the restrictions of their visa classification (see III.B, below). For restrictions on honorarium payments to individuals in any health sciences compensation plan, refer to the UC Accounting Manual, Chapter H-214-75. A. Payment to University individuals Honorarium payments must be approved by the Vice Provost--Academic Personnel for payments to academic employee or by the Associate Vice Chancellor--Human Resources for payments to staff employees. Payment is subsequently made by processing a One-Time Payroll Payment Authorization (UPAY564-3, Calcode 71461-277) or On-Line Payroll Time Reporting System (OPTRS) form EDFT. 1. Honorarium payments require standard approvals in accordance with established delegations of authority prior to processing by the Payroll Division. Any honorarium payment to an academic employee requires preapproval by the Office of the Provost. 2. Honorarium payments should be charged to the General Assistance object consolidation (SUBG) using Description of Service Code "HON." The amount is subject to withholding for Federal and State income taxes and Social Security taxes. B. Payment to non-University individuals 1. Tax implications in paying nonresident aliens Nonresident aliens are bound by the limitations of the visa type issued to them by U.S. Citizenship and Immigration Services (USCIS). a. Honorarium payments are compensatory in nature, and the University must report them to the State of California and Federal governments for income tax purposes. b. Most honorarium payments to nonresident aliens are subject to Federal income tax withholding at a flat 30% rate on the entire amount and State income tax withholding at a flat 7% rate on any amount in excess of $1,500 in a calendar year. c. In order that Accounting & Financial Services may determine the correct income tax withholding rates, nonresident aliens must complete and sign a Statement of Citizenship Status. The form should be attached to the DaFIS Request for Document Action--Honoraria and forwarded to the Accounting Office. If this form is not attached, income taxes will be withheld at the rates described in b, above. (See B.2, below.) d. Some nonresident aliens may be exempt from Federal income tax withholding because a tax treaty exists between their country of residence and the U.S. Nonresident aliens claiming a tax treaty exemption must also complete an IRS Form 8233 (available from Accounting & Financial Services--Accounts Payable Division, 530-754-5936) and attach it to their Statement of Citizenship Status form. Refer to Section 380-66 for additional information regarding taxation of nonresident aliens and a list of current tax treaties. 2. Direct Charge The department prepares a DaFIS Direct Charge document and routes it to Accounts Payable. Honorarium payments should be charged to object code 7900. The department must also send the following documents to Accounts Payable. a. Request for Document Action--Honoraria (http://accounting.ucdavis.edu/forms). This form must include the payee's Social Security Number or, for nonresident aliens, the Individual Taxpayer Identification number. b. If the payee holds a B-1, B-2, WB, or WT visa, a Certification of Academic Activity form (available from Accounts Payable). c. Statement of Citizenship Status (Calcode 71461-238). C. Payments charged to Federal funds The Federal government defines an honorarium as a payment or a reward where the primary intent is to confer distinction on, or to symbolize respect, esteem, or admiration for, an individual. As a general rule, honorarium payments are not allowable charges to Federal funds. 1. Payments for conducting seminars and workshops and for giving special lectures are allowable charges to certain Federal contracts and grants, but the nature of the service must be described in sufficient detail to establish how the service benefits the project. 2. Payments for all other types of honoraria are not allowable charges to Federal funds unless the contract/grant specifically authorizes such payments. When honorarium payments are anticipated, they should be specifically included as a direct cost item in the contract/grant proposal. For questions about visas and regulations governing payment to noncitizens, call Services for International Students & Scholars (530-752-0864). Questions concerning specific procedures or tax matters may be directed to Accounting & Financial Services (530-754-5936). VI. References and Related Policies A. Academic Personnel Manual: 1. Sections 660-667, Additional Compensation. 2. Sections UCD-660 and 666, Additional Compensation. B. UC Accounting Manual: 1. Chapter D-371-35, Honorarium Payments. 2. Chapter H-214-75, Health Sciences Compensation Plans. 3. Chapter T-182-27, Taxes: Federal Taxation of Aliens. C. UCD Policy & Procedure Manual: 1. Section 380-64, Conditions of Visas for Alien (Noncitizen) Students, Scholars, and Visitors. 2. Section 380-66, Income Tax Withholding and Reports of Earnings for Nonresident Aliens. 3. Section 380-70, Independent Consultants. D. Personnel Policies for Staff Members: 1. Policy and UCD Procedure 30.K (Restrictions). 2. Policy II-30.J (Restrictions--Senior Managers). Copyright © 2006 The Regents of the
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