I ran into this same issue at the last institution I worked at.  Because some of the research participants are already employed by the university, their payment has to go through payroll because of federal regulations regarding taxes, etc.  They are being paid for performing a service for the university, which is considered consulting for non-university employees who will receive a 1099 if their payment is above the threshold.  However, university employees cannot also be consultants.  Since they are already paid by the university, their research participant payment must be taxed and run through payroll.  How you classify their employment, either through the Res. Dept. or not, does not matter.  The process that payroll suggested is probably the easiest, and I cannot think of any other way to do this.

Kristy:)

Kristy Ford
Grant Management Manager
Office of Sponsored Programs/MHUMC
4750 Waters Ave. Suite 212
Savannah, GA  31404
(912)350-6379

>>> Angela Ford <xxxxxx@SFASU.EDU> 8/1/2007 9:31 AM >>>
Hi All,

One of our faculty members has a privately funded grant that allows for a
small payment to each research participant. We have worked out a procedure
for paying many of the participants, but we have run into the issue of how
to pay those participants who just happen to also be employed somewhere on
campus as undergraduate student assistants and graduate assistants. We
believe that tax-reporting purposes would require us to run the participant
payments through payroll. However, payroll has suggested that we need to
actually set up these students as employees (again - and in the researcher's
department), wait for a timesheet to be generated, and then complete the
timesheet to trigger a payment. (We wonder if payroll has really understood
exactly what we are asking, so that's another factor we're continuing to
work on.)

We realize that there are separate debates regarding how to maintain
confidentiality of research participants when their names must be turned in
for accounting purposes, but our main goal at this stage is to find out how
others pay participants who happen to be student employees on campus. We are
hoping that there's a simpler procedure for relaying information to payroll
(or to whomever might process such payments).

Thanks for your help!

Angela

*****************************************************

Angela M. Ford

Grants & Contracts Specialist

Office of Research and Sponsored Programs

Stephen F. Austin State University

P.O. Box 13024, SFA Station

Nacogdoches, TX 75962

phone: 936-468-1171

fax: 936-468-1251

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