The University of Texas at Arlington

General Policy

The University, in the course and scope of normal business, will contract professional services on a temporary basis from individuals outside the University. These individuals fulfill a variety of services that cannot be performed in an efficient and timely manner by the University personnel.

1. Approval of payment is obtained by completing an Authorization for Professional Services (APS) (PDF) form.

2. The APS form is not to be used for salary supplements. Salary supplements are submitted on Personnel Action Forms (PAF).

3. If the contract is to be paid from a grant or contract, 26 account, the Vice President for Research and Dean of Graduate Studies must approve the contract.

4. Professional services to be performed by a nonresident alien will be in accordance with IRS & INS rules and regulations. (See procedure Payments to Nonresident Aliens, 1-20)

IRS Classification Guidelines

It is critical that payment for all such services be handled in a manner that is consistent with IRS guidelines. The IRS requires that all individuals providing services to others must be classified as either an independent contractor or an employee.

1. The University must be concerned with making the proper worker classification of individuals engaged to perform services. If the institution improperly classifies an individual as an independent contractor, rather than an employee for tax purposes, the institution will be responsible for the applicable employer and employee portions of employment taxes, as well as, penalties and interest on these payments. Unfortunately, this classification is not easy and the distinction is not always clear.

   1. The IRS classifications of workers are independent contractors or employees according to the "common law" standard. The common law standard holds that if an employer controls and directs, or has the right to tell a worker how, when, and where to work, then the worker is an "employee".

   2. A worker free from such direction and control can be classified as an "independent".

   3. If the business merely reserves the right to control the worker, but doesn't actually exercise control, the worker can still be classified by the IRS as an employee.

2. The University has attempted to make the evaluation and classification easier for departments by creating the "Employee/Independent Contractor Classification Checklist" which is found on the back of the Authorization for Professional Services form. Complete the Employee/Independent Contractor Classification Checklist and determine the proper classification for the person who is to perform the desired services prior to completing the APS form.

Types of Classifications and Definitions

An individual is paid either as an independent contractor or as an employee. Authorization for procurement of services is obtained via the Authorization for Professional Services (APS) (PDF) form.

1. Independent Contractor Classification (Consultant)

   1. Consulting Services - Use of the term "consultant" is restricted to only those situations meeting the State of Texas strict definition of the term:

      "A study conducted for a state agency/institution or advice provided to a state agency/institution under contract that does not involve the traditional relationship of employer and employee."

   2. The term "consultant" does not include routine services that are necessary for the functioning of a state agency/institution's programs. Consultants are considered independent contractors.

   3. If the compensation to an independent contractor for services that meet this strict definition of "consultant" is expected to exceed $15,000 cumulative total in a fiscal year, prior approval from the Governor's Planning and Budget Office is required. This prior approval requirement will be strictly enforced without any exceptions.

2. Other Professional Services Professional services are performed by an individual with whom the University does not have an employer/employee relationship as determined by the Employee/Independent Contractor Classification Checklist on the back of the APS form, and the individual does not meet the definition of "consultant" as stated above.

3. Current Employees with an Official University Appointment

   1. Exempt Employee "Lump Sum Payments", are made for work which is performed in addition to the normal duties of the UTA employee with a full-time appointment.

   2. Non-exempt Employee To qualify as a "Lump Sum Payment" for services performed in addition to the normal duties for which an overtime rate is not required:

      1. The duties to be performed must be in a completely different capacity from the employee's appointed duties,

      2. the duties must be sporadic or occasional, and

      3. the employee's decision to work in a different capacity must be made freely and without coercion, implicit or explicit, by the employer.

      If the above requirements are not met, the additional hours worked in excess of 40 hours will be considered overtime and paid at the overtime rate based on the employee's regular appointment. A timecard must be completed and attached to the APS to substantiate the overtime hours worked.

   3. Casual Employee A casual employee is an individual who performs temporary services for the University and does have an employee/employer relationship with the University as determined by the Employee/Independent Contractor Classification Checklist on the back of the APS form.

      1. The casual employee also does not have an official appointment at UTA. This classification may include students, if the services provided are within the casual employee definition.

      2. An individual who maintains a continuing relationship with the University should be appointed via a Personnel Action Form (PAF).

      Note: A former employee of UTA who provides any type of temporary services to the University is considered an employee rather than a casual employee for 12 months after any payment to that individual.

Procedures for Payments

The procedures and paperwork necessary to pay an individual providing services to the University depends exclusively on the classification of the individual as either an employee or an independent contractor. Refer to paragraphs 6, 7, & 8 of this procedure.

General Provisions for Approval

The following University administrators must approve the APS forms:

• Department Chair or Director
• Dean or Vice President summary
• President or designee (Provost, Senior VP for Finance and Administration, Vice President for Research and Dean of Graduate Studies)
  
  

1. If an individual is classified as an independent contractor, the Associate Vice President for Employee Services must approve.

2. If a payment is going to be from a federal grant or contract, the Principal Investigator, Office of Grant and Contract Services, and the Vice President for Research must approve.

3. If payment is a lump sum payment to a current UTA employee, the chair or director of the department in which employee is appointed must give an approval.

4. Once the approval process is complete, the APS will be returned to the department for processing when payments are due.

Travel Reimbursements

1. If the Consultant/Speaker/Independent Contractor is not incorporated or does not have a Federal Identification Number, the department must process an Authorization for Professional Services via Travel Services prior to travel dates, even if travel is the only reimbursement. If they are incorporated, an APS is not required. If the consultant travel is a mileage only reimbursement, an APS form is not required.

   1. An Authorization to Travel (VE5) should now be created using Traveler Type "N".

   2. The department may arrange for the hotel bill to be direct billed to the department. Telephone charges, movies, room service and other miscellaneous charges are not reimbursable by the University. The traveler and the hotel should be informed of these restrictions in advance by the department making the arrangements. When the direct billed invoice is received from the hotel, the department will process an Electronic Reimbursement Voucher (VP2), attach the invoice, and send to the Travel Desk in Accounting Services.

   3. The department may arrange for the airline ticket to be direct billed to the University by use of the CBA (Corporate Business Account) through the University authorized travel agency, when there is a benefit to the University for travel. The travel agency is contacted and airfare booked by providing the Travel Authorization number (TV#). The Travel Desk will use TV# to charge the appropriate department.

      Exception: International consultant payments must be processed through the Payroll Office.

   4. Upon completion of travel, an Electronic Travel Payment Voucher (VP5) should be processed. Attach all receipts to the APS form and forward to Travel Services. Travel Services will review to insure the expenses are in accordance with University travel policy.

   5. CODING THE VOUCHER Consultant, speaker, and independent contractor travel is coded to the 75 budget line. The VP5 will correctly assign object code 1260.

2. If travel is to be reimbursed and original receipts will not be presented, include the estimated travel expense in the Proposed Payment field on the APS form and check the appropriate section pertaining to Non-Employee Travel.

   1. Reimbursement will be included with the payment for services and will be paid through Payroll Services.

   2. The amount reimbursed, including the expenses for travel, will be reported as compensation to the IRS and is subject to taxation at the applicable rate.

Payments to Independent Contractors (Professional Services)

Complete the Authorization for Professional Services (APS) (PDF) form and route for approval.

1. All individuals receiving payment as an independent contractor must complete a Payee Information Form (PIF) (PDF). A copy of a Social Security card, Individual Tax Identification Number or a copy of a photo ID is required and must be submitted with the PIF to the Office of Payroll Services before a vendor file will be established.

2. If nonresident alien status is indicated on the PIF, review Payroll Services procedure "Payments to Nonresident Aliens" for additional information.

3. Once the services have been performed, the independent contractor signs the approved APS that has been returned to the department. The Chair/Director approves the APS under the signature of the independent contractor and forwards it to Payroll Services for payment.

4. Independent Contractors providing services for a Federal grant or contract must sign the "Terms and Conditions for Federally Sponsored Projects". (Refer to the reverse side of the APS form.)

5. If there are multiple payments to an independent contractor on one APS, forward the original APS to the Payroll Services for the first payment. Indicate which payment is being made (i.e. 1 of 4) and the correct amount of that payment. For subsequent payments, forward a copy of the original APS indicating the correct amount to be paid and the number of the payment (i.e. 2 of 4).

6. Checks will be mailed to the independent contractors by US mail.

Payments to Casual Employees

1. Authorization for Professional Services (APS) (PDF) form

   Complete the APS form and route for approval. If the casual employee is to be paid from a grant or contract, the principal investigator must ensure that funds are available to pay the salary and fringe benefits not to exceed the approved fees. At completion of the approval process, the APS will be returned to the department for processing.

2. Casual employees do not have an official University appointment. However, an employee record must be established by having the individual complete the documents listed below:

   PO-8	The PO-8 form is used for check distribution instructions. If direct deposit is not elected, the employing department should indicate on the PO-8 that the individual is a casual employee and the check will be mailed to the W-2 mailing address, mail code 50.
   I-9	The Immigration Reform and Control Act of 1986 requires all employees to complete the INS Employment Eligibility Verification, I-9 form. The employee must complete the form and departmental official must view and certify the appropriate identification and employment eligibility documents.

   All completed and certified documents must be sent to the Office of Human Resources.

3. The casual employee's check will be held until these forms have been filed with OHR. If the casual employee already has an active employee record, these forms need not be completed.

4. If nonresident alien status is indicated on the I-9, review Payroll Services procedure "Payments to Nonresident Aliens" for additional information.

5. Payment will be made by the use of Departmental Payroll Voucher. Once the services have been performed, the employee must sign the APS. Attach the approved APS to the voucher.

6. Payments to casual employees are based on the flat rate specified on the APS form.

7. Normal payroll deductions for federal income tax withholding and social security always apply to these payments.

8. The applicable employer-paid fringe benefits, social security, unemployment insurance, and worker's compensation are charged to the same budget group as the payment.

9. Payments are made on the semi-monthly payroll and regular voucher cutoff deadlines apply to these payment documents.

Lump Sum Payments to Current Employees

1. Complete the Authorization for Professional Services (APS) (PDF) form and route for approval.

2. In addition to normal approvals, the APS for employees must be approved by the chair/director of the department in which the employee is appointed. Once the approval process is complete, the APS is returned to the department for processing.

3. Lump sum payments from grants or contracts are permissible only in rare instances. (i.e. Only when the service performed is across departmental lines or involves a separate or remote operation and the work is in addition to the employee's regular departmental workload.) Such arrangements must be specifically approved in writing in the grant document or in writing by the sponsoring agency. The APS must be submitted to the Office of Grant and Contract Services for review and approval by the Vice President for Research.

4. Once the services have been performed, the employee must sign the APS. The chair/director must approve the APS under the signature of the employee and forward the APS to the Payroll Department for processing.

5. If there are multiple payments to an individual on one APS, forward the original APS to the Payroll Department for the first payment. Indicate which payment is being made (i.e. 1 of 4) and the correct amount of that payment. For subsequent payments, forward a copy of the original APS and indicate the number of the payment (i.e. 2 of 4) and the correct amount to be paid.

6. Payments are made on the semi-monthly payroll and regular voucher cut-off deadlines apply to these payments.