If nothing else, this can present an IRS issue. An organization should not (cannot?) issue a 1099 and a W2 to the same person in the same calendar year. The IRS may come knocking, to ask why the same person was classified both ways (consultant AND employee) at the same time.

Option 1 below seems like the more reasonable way to go in your scenario. You may want to check with your HR department to ensure you don't have any internal issues with having an employee sign a secondary contract for the grant work.

Cira Mathis, CRA | Program Specialist
Office of Competitive Research Funds
office: +966 (2) 8082241
mobile: +966 (0) 54 4700475
email: xxxxxx@kaust.edu.sa

-----Original Message-----
From: Research Administration List [mailto:xxxxxx@lists.healthresearch.org] On Behalf Of Gauhar Nguyen
Sent: Sunday, July 21, 2013 2:07 AM
To: xxxxxx@lists.healthresearch.org
Subject: [RESADM-L] employee and contractor

Dear all,

I am hoping for the collective wisdom to either set me or the situation straight.

Situation: An org. has a grant. They hired a contractor to support certain functions. However, the contractor didn't work out. So they went separate ways. Meanwhile, an employee, who is paid by the org. general funds, not by the grant, said that she can do it. She really can do it. However, she is 100% on the general funds. The org. went and signed a contract with her, so she can come on the weekend and do things for the grant. The contract under the grant is for 10-15 hours a week (weekends). I had all kinds of bells and flags going on in my head. But I can't seem to find any regulations that refers to an employee being a contractor at the same time for the same org, but being paid from different funds. Am I wrong to have the Pacific Tsunami Warning going on in my head? Could someone maybe point me to any reg? I think it also goes into the org. HR manual.

Solution: The employee is hourly. She can charge the overtime. So I was thinking of 1. Putting her as on the grant as an employee (10 or 15%) and the rest is paid by the general funds. If she is going over her 40 hours, she can charge overtime to the general funds.

or

2. The org. is thinking of switching her to non-hourly, giving her a raise, and putting on the grant as an employee (10-15%) and the rest is paid from the org fund. If she has to work over 40 hours, she still gets paid the same increased amount.

Is there a better solution? They can't hire another person right now, since the extra hours won't warrant a part-time employment and would require a specialized set of skills, which they didn't find in the contractor before (so they let the contractor go).

I would appreciate all and any advice and guidance. I do not wish to burn the employee for doing the work. However, I would like the org. to formalize the relationship and work properly.

Thank you, Gauhar

======================================================================
 Instructions on how to use the RESADM-L Mailing List, including  subscription information and a web-searchable archive, are available  via our web site at http://www.healthresearch.org (click on the  "LISTSERV" link in the upper right corner)

 A link directly to helpful tips:  http://tinyurl.com/resadm-l-help ======================================================================

________________________________

This message and its contents including attachments are intended solely for the original recipient. If you are not the intended recipient or have received this message in error, please notify me immediately and delete this message from your computer system. Any unauthorized use or distribution is prohibited. Please consider the environment before printing this email.

======================================================================
 Instructions on how to use the RESADM-L Mailing List, including
 subscription information and a web-searchable archive, are available
 via our web site at http://www.healthresearch.org (click on the
 "LISTSERV" link in the upper right corner)

 A link directly to helpful tips:  http://tinyurl.com/resadm-l-help
======================================================================