RPM | REQUIREMENTS AND POLICIES MANUAL

    Title:

    Non-Employee Payments (Affiliates and/or Visitors)

    Publication date:

    1/5/2023

    Effective date:

    1/5/2023

    BRIEF

    Policy Summary

    This policy provides guidance for payments made by Lawrence Berkeley National Laboratory (Berkeley Lab) to non-employees (affiliates and/or guests), in accordance with the U.S. Department of Energy (DOE) Contract No. DE-AC02-05CH11231 (Contract 31) and all other applicable regulations. This replaces the policies for Honoraria Payments and Stipends for Non-Employees.

    Who Should Read This Policy

    This policy applies to Laboratory employees involved with requesting and processing fellowships for affiliates and/or guests.

    To Read the Full Policy, Go To:

    The POLICY tab on this wiki page

    Contact Information

    Disbursement Accounting Services Manager, OCFO

    Title:

    Non-Employee Payments (Affiliates and/or Visitors)

    Publication date:

    1/5/2023

    Effective date:

    1/5/2023

    D. Policy Statement

    D.1 Overview

    D.2 Payment Types

    D.3 Recipient Types

    D.4 Determination of Payment Mechanism Flowchart

    D.5 Payment Determination Table

    D.6 Invitation Letters

    D.7 Tax Implications

    POLICY

    A. Purpose

    This policy provides guidance for payments made by the Lawrence Berkeley National Laboratory (Berkeley Lab) to non-employees (affiliates and/or guests), in accordance with the U.S. Department of Energy (DOE) Contract No. DE-AC02-05CH11231 (Contract 31) and all other applicable regulations. This replaces the policies for Honoraria Payments and Stipends for Non-employees.

    B. Persons Affected

    Any Berkeley Lab employee involved with requesting, approving or processing fellowships for affiliates and/or guests.

    C. Exceptions

    None

    D. Policy Statement

    D.1 Overview

    Prior to making a payment to a nonemployee through the FMS Payment Request process, the division must define the activities the nonemployee will be involved in and, as appropriate, work with Berkeley Lab resources to determine if another payment mechanism is more appropriate.  For any stipends, the affiliate/guest must be under a valid, pre-approved LBNL fellowship program.

    • A worker classification review assists the divisions in determining if the individual is performing services appropriate for an employee relationship. The Human Resources (HR) division partner will serve as the primary point of contact and subject-matter expert for worker classification reviews (see Worker/Affiliate Classification Guide).
    • If a fee for services is negotiated or prescribed with the affiliate, it does not qualify for an honorarium or fellowship payment. Under these circumstances, Procurement should be contacted for guidance.

    Reimbursements for lodging, meals, and incidental expenses are processed through Berkeley Lab's TRavel and EXpense (TREX) System and are subject to the requirements in the Berkeley Lab Travel policy.
    For Workforce Development & Education (WD&E) Program participants at Berkeley Lab, see education.lbl.gov.

    D.2 Payment Types

    There are two types of payments that can be made to non-employees:

    1. Honorarium Payment. A token payment in recognition of a one-time event for a voluntary, short-term service (usually one to two days) on which custom or propriety forbids a price or fee to be set. Payments in excess of $2,500 up to $5,000 require Lab Director approval. Payments in excess of $5,000 require UC approval. Examples include lectures, sharing of technical knowledge or expertise, participation in a workshop, or serving on a panel discussion. Honorarium payments are not to be made in lieu of reimbursement of expenses or travel. Honorariums are not to be paid in lieu of a salary for past, present, or future research or other services to LBNL.
      1. Payments to University of California (UC) employees require special handling and are subject to home campus approval.  Notification should be sent to the home campus and payment will be made via UCPath, and will be subject to appropriate tax withholdings.
      2. To process an honorarium payment for non-UC recipients, the requestor must submit an FMS Payment Request with the proper documentation.
    1. Fellowship Payment. There are three main categories of fellowship payment at Berkeley Lab:
      1. Student Fellowship. Awarded by Berkeley Lab to support a student's independent research or studies. The award can cover the following non-qualified fellowship expenses: room and board, travel, research, clerical help, or equipment. Students must remain enrolled and under the general direction of an advisor at their home educational institution. A student fellowship is not to be paid in lieu of a salary for past, present, or future research or other services. Student fellowships are subject to annual renewal (resubmission of the FMS Payment Request).
      2. LBNL Fellowship Program. Documented fellowship program endorsed by division management and approved by designees from the Controller’s Office, Human Resources, Legal and Procurement. A thorough review of the program addresses issues of worker classification as it relates to scientific collaborations. This fellowship program is not to be paid in lieu of a salary for past, present, or future research or other services to LBNL. LBNL fellowships are subject to annual renewal (i.e. resubmission of the FMS Payment Request for payments longer than a year).
      3. Strategic Partnership Program (SPP) Fellowships. SPP fellowships are awards provided to support an individual's independent research or studies.  The terms of the fellowship award are stated in the award document. An SPP fellowship is not to be paid in lieu of salary for past, present, or future research or other services. Examples of SPP fellowships include the National Institute of Health (NIH) National Research Service Awards Fellowship and the Einstein Fellowship Program. SPP fellowships are subject to annual review (i.e. resubmission of the FMS Payment Request for payments longer than a year).
      4. Non-employee long-term travel payment. The traveler is on long-term travel if assigned to one location away from his or her primary work location for 30 days or more. Travelers on long-term travel should use establishments catering to the long-term visitor (e.g., weekly or monthly rentals).  Reimbursement for travel longer than 30 days is limited to a daily amount of up to 55% of the applicable federal per diem rates, for lodging and M&IE, once the long-term stay location has been occupied. All payments must comply with the Lab’s Travel policy.

    D.3 Recipient Types

    The following types of recipients may receive an honorarium or fellowship, subject to the restrictions of their visa classification (if applicable):

    • U.S. citizens, Permanent Residents (PRs), or Resident Aliens (RAs).
    • Nonresident aliens.

    International persons (resident or nonresident aliens) may receive one of the payment types above, subject to the restrictions of their visa classification. Information on inviting a foreign national to Berkeley Lab, including eligibility and processing requirements, is available on the Berkeley Lab Affiliate Processing website or the Visa and Immigration Services Office.

    D.4 Determination of Payment Mechanism Flowchart

    For assistance with the worker classification, please contact your HR Division Partner.  For assistance with the payment mechanisms, please contact the Controller’s Office at [email protected].

    D.5 Payment Determination Table

    Activity

    Honorarium*

    Fellowship

    Non-employee Long-Term Travel

    1. Division Preliminary Planning

    Prior to the division’s initial interaction with the affiliate or visitor, the division financial or administrative representative should work with their HR Division partner to determine the worker classification for the affiliate or visitor.  This will determine how the individual will be paid.

    After a determination has been made, contact the Controller’s Office ([email protected]) to discuss preliminary details and obtain guidance on the process.

    UC employees require special handling for honoraria payments. The Controller’s Office ([email protected]) must be contacted for guidance.

    Employees of the U.S. Government or other institutions may be prohibited from receiving an honorarium. The division must notify the recipient that he/she is responsible for confirming his/her ability to accept an honoraria payment, based on the policy of the recipient’s institution. Acceptance of payment by the recipient confirms their eligibility.

    Prior to the division’s initial interaction with the affiliate or visitor, the division financial or administrative representative should work with their HR Division partner to determine the worker classification for the affiliate or visitor.  This will determine how the individual will be paid.

    After a determination has been made, contact the Controller’s Office ([email protected]) to discuss preliminary details and obtain guidance on the process.

    The HR Service Center prepares a letter to the recipient that addresses applicable visa requirements.

    Prior to the division’s initial interaction with the affiliate or visitor, the division financial or administrative representative should work with their HR Division partner to determine the worker classification for the affiliate or visitor.  This will determine how the individual will be paid.

    After a determination has been made, contact the Controller’s Office ([email protected]) to discuss preliminary details and obtain guidance on the process.

    The HR Service Center or Division Host prepares a letter to the recipient that addresses applicable visa, reimbursement, and time requirements.

    Non-employee long-term assignments cannot exceed 36 months. Time restarts after a 12-month break in assignment with the Laboratory.

    Verify that the affiliate or guest is not currently receiving a fellowship payment. Verify that affiliate or guest has not received a fellowship payment in the last 12 months

    2. Division Approval *

     

     

    Authorization form MUST be completed and approved prior to the arrival of the affiliate.

    -Business Manager

    Up to and including $500 w/delegation of authority in writing

    Per Signature Authorization System (SAS)

    Host/PI: Assignments up to 12 months

    -Division Director

    Up to and including $500

    Per Signature Authorization System (SAS)

    Division Director (or designee): Assignments over 12 months up to 24 months

    -Associate Lab Director

    Over $500, up to and including $1500

    Per Signature Authorization System (SAS)


    -Lab Director

    Over $1500, up to and including $2500

    May grant exceptions up to $5000

    N/A

    Lab Director AND Site Office:  Assignments over 24 months up to 36 months

    3. Invitation Letter

    An invitation letter (or email) is sent to the recipient by the hosting division in advance of the event or planned visit. Required instructions, including a template are provided, (see Attachment A).

    An invitation letter (or email) is sent to the recipient by the hosting division. Required instructions, including a template are provided, (see Attachment A).

    Formal invitation letter on Laboratory or Division letterhead is sent to the recipient by the hosting division. Required instructions, including a template are provided, (see Attachment B)

     

    Once the invitation letter is sent, the Berkeley Lab Affiliate Specialist, or division, provides the recipient’s email address and a signed copy of the invitation letter to, 1) Controller’s Office ([email protected]), and 2) IRSO, if applicable.

    Once the invitation letter is sent, the Berkeley Lab Affiliate Specialist, or division, provides the recipient’s email address and a signed copy of the invitation letter to, 1) Controller’s Office ([email protected]), and 2) IRSO, if applicable.

    Once the invitation letter is sent, the Berkeley Lab Affiliate Specialist, or division, provides the recipient’s email address, a signed copy of the invitation letter, non-employee long-term travel authorization and lodging attestation (if applicable) to, 1) Travel Services ([email protected]), and 2) IRSO, if applicable.

    These documents must be received prior to the arrival of the affiliate or guest.

     


    For SPP Fellowships, a copy of the SPP award and applicable sponsor documents describing the fellowship must be provided to the Controller’s Office with the invitation letter.


    4. Visa and Tax Documentation

    For recipients who are U.S. citizens not already established in the supplier/vendor database, the division submits a completed IRS W-9 form and Fax to AP Supplier Desk, 1-510-486-6975 or mail to MS971-AP.

    For recipients who are U.S. citizens not already established in the supplier/vendor database, the division submits a completed IRS W-9 form and Fax to AP Supplier Desk, 1-510-486-6975 or mail to MS971-AP.

    For recipients who are U.S. citizens not already established in the supplier/vendor database, the division submits a completed IRS W-9 form and Fax to AP Supplier Desk, 1-510-486-6975 or mail to MS971-AP.

     

    For international persons, the division submits the recipient’s name and email address to the Controller’s Office (APHelp@lbl.gov). The Controller’s Office will contact the recipient directly via GLACIER (LBL’s tax compliance software), and collect the appropriate documentation.

    For international persons, the division submits the recipient’s name and email address to the Controller’s Office ([email protected]). The Controller’s Office will contact the recipient directly via GLACIER (LBL’s tax compliance software), and collect the appropriate documentation.

    For international persons, the division submits the recipient’s name and email address to the Controller’s Office ([email protected]). The Controller’s Office will contact the recipient directly via GLACIER (LBL’s tax compliance software), and collect the appropriate documentation.

    5. Reimbursement/ Payment Method

    For both U.S. and international persons, once event participation is completed by the recipient, the division submits a Payment Request in FMS.

    Request for Berkeley Lab to provide an honorarium for UC System-wide employees requires special handling. Submit a Payment Request in FMS. Payment is subject to home campus approval.

    For both U.S. and international persons, the division submits a Payment Request in FMS. The request cannot exceed 1 year in length.

    Any changes, (i.e., project ID or monthly amount) to an existing Fellowship request will require a new Fellowship request.

    Non-employee long-term travel is reimbursed in TREX.

    Approval limits on honoraria meet requirements of UC Accounting Manual, Chapter D-371-35, III.3, Allowable Rates* or designee (in writing).

    D.6 Invitation Letters

    Invitation letters must contain the following elements:

    Honorarium

    Fellowship

    Non-Employee Travel
    • A statement that the individual is performing a service as a guest speaker/collaborator.
    • The date and time of the event or length of activity.
    • The amount of the honorarium to be given to the individual as a token of appreciation for their contribution.
    • A statement that additional documents may be required prior to payment if the individual is a foreign national (resident or non-resident alien).
    • A statement that honorarium payments may have tax implications and that the recipient may need to consult a tax advisor.
    • A statement that the honorarium will require special handling if the recipient is a UC employee.
    • A statement that the fellowship payment supports the individual’s focus on independent research or study.
    • A statement identifying the individual’s home organization, and faculty advisor contact name (student fellowships only).
    • The fellowship payment amount per month and applicable time period, not to exceed one year.
    • A statement that fellowships will be renewed on an annual basis.
    • A statement that additional documents may be required prior to payment if the individual is a foreign national (resident or non-resident alien).
    • A statement that fellowship payments may have tax implications and that the recipient may need to consult a tax advisor.
    • A statement supporting the reason and necessity of this collaboration with division/Laboratory.
    • A statement identifying the individual's home organization, contact name and what monetary support is being provided by home organization.
    • The travel payment amount per month, reimbursable limits, and applicable time period.
    • Frequency of reimbursement (e.g. payment every 30 days).


    Do not make any reference in the letter to employment (e.g., salary, wages, compensation), as honoraria and fellowship payments are not part of an employee/employer relationship.

    D.7 Tax Implications

    1. Honoraria
      1. Honorarium payments for short-term services performed in the U.S. are considered income and may be taxable and/or subject to withholding in accordance with Internal Revenue Service (IRS) and California's Franchise Tax Board (FTB) regulations.
      2. U.S. Citizens, PRs, or RAs. U.S. citizens, PRs, and RAs may receive an IRS Form 1099-MISC depending on the amount received. California nonresidents may receive an FTB Form 592-B from Berkeley Lab as applicable. Recipients will use these forms in preparation of their federal and California state tax returns.
    1. Nonresident Aliens
      1. Nonresident aliens will receive an IRS Form 1042-S to use in preparation of their federal tax return.
      2. California nonresidents may also receive an FTB Form 592-B, as applicable, to use in preparation of their California state tax return.
    2. Fellowship Payments
      1. U.S. Citizens, Permanent Residents (PRs), or Resident Aliens (RAs)
        1. Fellowships for U.S. citizens, PRs, or RAs are considered taxable income by the IRS but are not reportable or subject to withholding by Berkeley Lab.
        2. For California residents, Berkeley Lab will not report to the FTB.
        3. For U.S. residents/citizens, Berkeley Lab will not report to the IRS.
        4. For California nonresidents who are students, Berkeley Lab currently does not report to the FTB due to an exception granted to the University of California by the FTB.
      2. Nonresident Aliens. Fellowships for nonresident aliens are considered taxable income by the IRS. Berkeley Lab will report and withhold, as applicable, and will issue an IRS Form 1042-S.
        1. For California nonresidents who are students, the Laboratory currently does not report to the FTB due to an exception granted to the University of California by the FTB.
        2. Personal travel for nonresident alien fellowship recipients reimbursed or paid by Berkeley Lab (i.e., travel to the Laboratory, return trip home, and any personal trips in between) is taxable and reportable to the IRS and the FTB, as applicable.
    3. Additional Information Regarding International Persons
      1. Individuals from countries with which the U.S. has a tax treaty may be eligible to exclude some or all of their income under the terms of an income tax treaty. California does not recognize tax treaties, so California withholding will apply.
      2. The division must provide the recipient's email address in the FMS Payment Request to enable the Nonemployee Desk to work directly with the international person to obtain required tax documentation prior to Berkeley Lab issuing the payment.
      3. The Laboratory utilizes GLACIER, a secure, Web-based tax compliance system that international persons use to provide their immigration and tax data information via the internet. This system is available to users 24 hours per day. GLACIER assists in determining tax residency, withholding rates, and income tax treaty eligibility.

    E. Roles and Responsibilities

    Role

    Responsibility

    Hosting Division
    • Ensures the request complies with Laboratory policy and procedures.
    • Consults with the Human Resources Department to determine worker classification, as needed.
    • Ensures adequate funding is available.
    • Contacts the Controller's Office ([email protected]) early in the process for guidance on requirements and documentation.
    • Ensures invitation letter(s) are prepared (see Attachment A).
    • Ensures all of the appropriate approvals are obtained prior to submitting the following documentation to the Controller's Office ([email protected]).
    • For international persons, provides the recipient's name and email address to [email protected].
    • Prepares the FMS Payment Request (See Reimbursements: The Payment Request Center on the Accounts Payable web site).

    HR Division Partner
    • Provides guidance to the Hosting Division to determine worker classification and payment types according to the Lab and UC regulations.

    Controller's Office
    • Provides oversight of Laboratory policy requirements.
    • Responsible for processing nonemployee payments.
    • Works with the nonemployee to ensure questions are answered and documentation is completed and received (for international persons, verifies tax treaty exemption status).
    • Issues Monthly Recurring Payment Report to divisions by the fifth of each month.
    • Prepares and issues IRS Form 1042-S, as appropriate, for nonresident aliens.
    • Prepares and issues FTB Form 592-B, as appropriate, for California nonresidents.
    • Issues IRS Form 1099-MISC, as appropriate, for U.S. citizens, permanent residents (PRs), and resident aliens (RAs).

    F. Definitions/Acronyms

    Term

    Definition

    Affiliates

    Non-Laboratory employees engaged in on-site Laboratory activities. Affiliates are subject to training in safety and other subjects. They are also issued a Berkeley Lab identification badge. Affiliates may receive system accounts, research access to facilities, and a per diem allowance for housing and living expenses. Examples: Facility users, scientific collaborators, and students.

    California Nonresident

    In general, under the California Personal Income Tax regulations, an individual who spends more than nine months of the tax year in California is presumed to be a resident of the state. Refer to FTB Publication 1031, Guidelines for Determining Resident Status, for additional information on making a determination of residency status.

    Fellowship

    A payment to aid in the pursuit of the individual's independent research or studies

    GLACIER

    A secure, Web-based tax compliance system used by international persons to provide their immigrant and tax data via the Internet

    Internal Revenue Service (IRS)

    Responsible for administering United States personal income and corporation tax laws

    Long-Term Travel 

    The traveler is on long-term travel if assigned to one location away from his or her primary work location for 30 days or more.

    International Person

    An individual who is a citizen of any country other than the United States
    Nonresident Alien An individual who is not a citizen, permanent resident, or resident alien of the United States

    Permanent Resident (PR)

    An individual who possesses an Alien Registration Receipt Card (green card), which is provided to those who become legal permanent residents of the United States

    Resident Alien (RA)

    An individual who is not a citizen or national of the U.S., but meets either the green card test or the "substantial presence test" for income tax purposes for a particular calendar year

    Student

    An individual pursuing a degree at an eligible education institution

    Tax Treaty

    An agreement between two countries specifying what items of income will be taxed by the authorities of the country where the income is earned

    U.S. Citizen

    Citizenship granted at birth to individuals born in the U.S., persons born abroad with at least one U.S. citizen parent, individuals granted permanent residence, or individuals who have been naturalized

    G. Recordkeeping Requirements

    As honoraria and fellowship payments are made through the FMS Payment Request disbursement mechanism. Back-up is stored in FMS.

    H. Implementing Documents

    Document number

    Title

    Type

    IRS Form W-8BEN

    IRS Form W-8BEN — Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding (Individual)

    Form

    FTB Form 592-B

    FTB Form 592-B — Resident and Nonresident Withholding Tax Statement

    Form

    IRS Form 1042-S

    IRS Form 1042-S — Foreign Person's U.S. Source Income Subject to Withholding

    Form

    IRS Form 1099-MISC

    IRS Form 1099-MISC — Miscellaneous Income

    Form

    IRS Form 8233

    IRS Form 8233 — Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual

    Form

    IRS Form W-9

    IRS Form W-9 — Request for Taxpayer Identification Number and Certification

    Form

    IRS Publication 519

    IRS Publication 519 — U.S. Tax Guide for Aliens

    Manual

    IRS Publication 901

    IRS Publication 901 — U.S. Tax Treaties

    Manual

    IRS Publication 970

    IRS Publication 970 — Tax Benefits for Education

    Manual

    11.05.005.001

    Create FMS Payment Request

    FMS

    11.05.005.002

    Attachment A (Invitation Letter Instructions/Templates)

    Template

    11.05.005.003

    Worker/Affiliate Classification Guide

    Guideline

    I. Contact Information

    Disbursement Accounting Services Manager, OCFO

    J. Revision History

    Date

    Revision

    By Whom

    Revision Description

    Section(s) Affected

    Change Type

    7/1/2012

    0

    M. Mock

    Re-write for wiki

    All

    Major

    7/27/2016

    1

    T. Carlson

    Periodic review

    All

    Minor

    9/10/2020

    2

    J. Walton

    Periodic review

    All

    Minor

    1/5/2023

    3

    M. Hutchins

    Period review

    All

    Minor

    DOCUMENT INFORMATION

    Title:

    Non-Employee Payments (Affiliates and/or Visitors)

    Document number

    11.05.005.000

    Revision number

    2

    Publication date:

    1/5/2023

    Effective date:

    1/5/2023

    Next review date:

    7/31/2026

    Policy Area:

    Payroll, Accounting

    RPM Section (home)

    Financial Management

    RPM Section (cross-reference)

    none

    Functional Division

    OCFO

    Prior reference information (optional)


    Source Requirements Documents

    Implementing Documents

    Document number

    Title

    Type

    IRS Form W-8BEN

    IRS Form W-8BEN — Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding (Individual)

    Form

    FTB Form 592-B

    FTB Form 592-B — Resident and Nonresident Withholding Tax Statement

    Form

    IRS Form 1042-S

    IRS Form 1042-S — Foreign Person's U.S. Source Income Subject to Withholding

    Form

    IRS Form 1099-MISC

    IRS Form 1099-MISC — Miscellaneous Income

    Form

    IRS Form 8233

    IRS Form 8233 — Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual

    Form

    IRS Form W-9

    IRS Form W-9 — Request for Taxpayer Identification Number and Certification

    Form

    IRS Publication 519

    IRS Publication 519 — U.S. Tax Guide for Aliens

    Manual

    IRS Publication 901

    IRS Publication 901 — U.S. Tax Treaties

    Manual

    IRS Publication 970

    IRS Publication 970 — Tax Benefits for Education

    Manual

    11.05.005.001

    Request for Issuance of Check (eRFIC) for Payments to Nonemployees Form

    Form

    11.05.005.002

    Attachment A (Invitation Letter Instructions/Templates)

    Template

    11.05.005.003

    Worker/Affiliate Classification Guide

    Guideline



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