Paying Individuals from Externally Funded Projects

Faculty employing staff members who will be paid on a grant/contract, whether part-time or full-time, must follow the policies and procedures of Human Resources. Hiring for a new position, replacement position, or changing FTE on any position (grant or non-grant funded), requires putting the position through the applicant tracking system (accessible only by the hiring administrator; workflow includes approval of the department head/chair, VP/Dean, Provost and President, including Compensation and SPA/Budgeting Offices).  For those units reporting to the Provost, prior approval of any new or change in FTE should be pre-approved. Forms can be found here.

Procedures for merit awards for graduate students are found here. Graduate students who have full-time status with a 9 month stipend of at least $14,000 paid by an external grant/contract are eligible to receive tuition remission paid by the university up to 18 credit hours. Graduate students who have full-time status with 12 month stipend of at least $16,000 paid by an external grant/contract are eligible to receive tuition remission paid by the university up to 21 credit hours. Such tuition costs are partially covered by means of the applicable graduate student fringe benefit rate used in the grant/contract budget. Once an award is made and an accounting unit is established, a merit award application must be submitted to the Graduate School for each supported Graduate Student. For any graduate student with less than full-time status, contact your Research Administrator to determine the applicable fringe benefit rate(s).

Faculty are responsible for initiating the process to charge staff to grants and contracts, and for inactivating their appointment at the end of a project (or earlier, if their employment is ending). Vacation earned/accrued by full-time or part-time staff who are supported by grants should be encouraged by Principal Investigators to take time off before funds are depleted or the grant expires. Otherwise, earned vacation time becomes a liability for the department.

Information on faculty salary charges on externally funded projects is available here.

According to IRS rules, payments can either be made to employees, independent contractors (IC) or human subjects. There is no other type of individual that can be paid. Thus, invited speakers, outside consultants of any type, outside advisors, outside paid reviewers, etc., must be paid as an IC.

CONSULTING AGREEMENTS COSTING LESS THAN $5,000

1. Prepare a Worker's Classification Form (Microsoft Word) and submit it to Accounts Payable at ACCOUNTS-PAYABLES@luc.edu for processing. For additional information, see http://www.luc.edu/finance/workersclassificationprocedure/. If the proposed individual is approved as an independent contractor, proceed to Step 2. If the individual is NOT approved as an IC, contact your Research Administrator (RA) in the Office of Research Services (ORS) to see if rebudgeting is needed on the grant in order to hire the person as an employee.
2. Contact your RA to initiate preparation of an IC agreement (known as an “Agreement for Consulting Services”) and to make sure the payment is allowable under the terms and conditions of the grant, especially on federal and federal flow through awards. Information needed by the RA to prepare the IC agreement can be found here. Once the IC agreement is fully executed, Research Services will upload a copy to the PTAP and notify Sponsored Program Accounting (SPA) that a new IC agreement for that grant has been executed.
3. When it comes time to pay the independent contractor, submit a payment requisition, signed ‌W-9 Form, and supporting documentation (original invoice, flyer or brochure with speaker's name, etc.) to Accounts Payable at ACCOUNTS-PAYABLES@luc.edu for processing. Accounts Payable will import the request into the necessary systems and route the request to Sponsored Program Accounting for approval. [NOTE: A new W-9 form is not required if Accounts Payable already has assigned a vendor number to the IC: contact the Accounts Payable Department (312-915-8760 or e-mail at ACCOUNTS-PAYABLES@luc.edu) in order to ascertain if the individual has an existing form on file.]

CONSULTING AGREEMENTS COSTING $5,000 OR MORE

1. Prepare a Worker's Classification Form (Microsoft Word) and submit it to Accounts Payable at ACCOUNTS-PAYABLES@luc.edu for processing. For additional information, see http://www.luc.edu/finance/workersclassificationprocedure/. If the proposed individual is approved as a independent contractor, proceed to Step 2. If the individual is NOT approved, contact your (RA) in the Office of Research Services (ORS) to see if rebudgeting is needed on the grant in order to hire the person as an employee.
2. Prepare a Purchasing Checklist and Bid Summary Form and submit it to Purchasing at purchlsc@luc.edu. Normally, hiring of independent contractors where the cost will be $5,000 or greater requires a competitive bidding process; however, the Checklist has provisions for documenting that the independent contractor is eligible for selection without competitive bidding (e.g., named in the grant award/sole source). Purchasing will send a copy of the approved checklist to you, as well as to your RA for uploading to the PTAP as part of the IC agreement (see Step 3).
3. Contact your RA to initiate preparation of an IC agreement (known as an “Agreement for Consulting Services”) and to make sure the payment is allowable under the terms and conditions of the grant, especially on federal and federal flow through awards. Information needed by the RA to prepare the IC agreement can be found here. Once the IC agreement is fully executed, Research Services will upload a copy to the PTAP and notify Sponsored Program Accounting (SPA) that a new IC agreement for that grant has been executed.
4. When it comes time to pay the independent contractor, submit a payment requisition, signed W-9 Form‌, and supporting documentation (original invoice, flyer or brochure with speaker's name, etc.) to Accounts Payable at ACCOUNTS-PAYABLES@luc.edu for processing. Accounts Payable will import the request into the necessary systems and route the request to Sponsored Program Accounting for approval. [NOTE: A new W-9 form is not required if Accounts Payable already has assigned a vendor number to the IC: contact the Accounts Payable Department (312-915-8760 or e-mail at ACCOUNTS-PAYABLES@luc.edu) in order to ascertain if the individual has an existing form on file.]

For policy and procedure guidance on payments to research subjects, click here.