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Payment Types

Virginia Tech Payment Types Guide

The table below provides an overview of the payment types available at Virginia Tech and serves as a general guide for selecting the most appropriate option. For each payment type, you will find information on when it should and should not be used, along with links to relevant forms, policies, and university resources. This guidance is intended to support informed decision-making and help ensure compliance with university requirements. If you are unsure of the correct payment method for a position or appointment, please consult your HR Partner or the Compensation team for guidance. 

 
Adjunct and Wage Faculty Payment (P-14 Payment) Guidance
When to Use:
  • Stipends that are paid on a per pay period basis over the  course of the performance of professional services or as  one-time fee payments. 
  • Only appropriate for the types of work that would qualify  as exempt executive, administrative, computer or  professional duties under the Fair Labor Standards Act  (FLSA) and are not duties normally performed by staff  employees.
  • Approved uses for P14s are:
    • Payments to faculty and staff employees  participating in non-credit instructional programs  processed through Continuing and Professional  Education.
    • Payments to adjunct teaching faculty members for  teaching credit courses, as the primary  appointment.
    • Overload payments to full-time instructional  faculty who are performing additional professional  continuing ed classes.
    • Payments to current faculty and staff participating  in university-sponsored consulting activities.
    • Payments to part-time, temporary faculty members, for administrative, instructional support, research, extension, or outreach activities.  
      • This particular bullet is one where we want  our hiring managers and HR Partners to pay close attention to the details. What is  the position actually doing? How much is  the employee being paid on a weekly  basis? This will ensure FLSA compliance requirements are being met.

One-time payments such as payments to current Virginia  Tech exempt employees, which would otherwise be paid as  an honorarium. 

Requirements/Limitations:
  • Appointments require a Part-time Appointment Letter  detailing the terms of engagement. 
  • The start and end dates of an appointment should run  concurrent with the salary pay periods to avoid  underpayment/ overpayment.
    • There must be an end date for the appointment,  even if it may be extended.
  • While current faculty and staff employees may have  secondary employment on a P14, staff need additional  review and approval by the Compensation Team.
    • Secondary employment should be paid on a P14  only if it is for work that is in a different capacity from the primary job. 
    • Non-exempt staff typically will not be paid on a P14. Any exception must be approved by the  Compensation Team to ensure compliance with  FLSA.
FLSA Implications:
  • Non-teaching positions must have a per pay period stipend  of $1,482 (or $684/week) to meet FLSA salary threshold  requirement. 
    • If paid on a one-time fee payment, the total fee must be equivalent to at least the minimum threshold established by the Department of Labor for 40 hours of time spent completing the job.
Applicable Policies and Resources:

 

 
Administrative Stipend Guidance:
When to Use:Given to full-time faculty and staff remaining in the same position but taking on additional administrative responsiblities outside of normal job duties.
Requirements/Limitations:For interim appointments that are expected to last one year or greater.
Benefit Implications:Eligible for VRS or ORP credit.
Applicable Policies and Resources:

 
Emergency Hire Guidance:
When to Use:
  • Used only for temporary or seasonal employment.
  • Reasons for hiring an emergency hire employee include:
    • To complete critical work that is not expected to last more than 130 days.
  • To provide temporary support while a vacant position is being advertised.
Requirements/Limitations:
  •  Employment time of the employee is 130 calendar days or  less. 
    • With appropriate approval, appointments may be  extended given extraordinary circumstances, such as maintaining continuity of business and research activities during a recruitment or to meet a deadline.  
  • Exempt from normal recruiting requirements. 
  • Banner Time Entry is used to record employee hours  worked. 
    • Appointments are compensated in accordance  with the Wage Payroll Schedule.
FLSA Implications:
  • All wage employees paid on an hourly basis are considered  to be non-exempt under FLSA and are to be compensated  at a rate of one and one-half times the regular rate of pay  for any time actually worked in excess of 40 hours within  the defined university workweek.
Applicable Policies and Resources:

 
Employee Award and Recognition Guidance:
When to Use:
  • Programs may be established to recognize: 
    • Outstanding accomplishments or performance in  the areas of scholarship, research, creative  achievement, teaching or professional discipline. 
    • Outstanding service to the university,  commonwealth, or nation consistent with the  university’s instructional, research, and outreach  missions. 
    • Employee achievements that contribute to the  mission, goals, and objectives of the university, college or administrative area, or department.
    •  Administrative excellence, leadership, customer service, workplace safety, or other qualities that support university goals.
Requirements/Limitations:
  • Programs may be established as annual programs or one time programs. 
  • Award types can be monetary, non-monetary, and/or  recognition leave. 
    • State policy limits staff monetary awards to $5000  in a fiscal year and up to 40 hours of recognition  leave in the calendar/leave year. 
  • Awards are tax eligible.
FLSA Implications:
  • Monetary and non-monetary awards paid to non-exempt employees may potentially increase the University's overtime liability under the FLSA, which divides bonuses  into two categories: discretionary and non-discretionary.  o If the non-discretionary award is paid to a non-exempt employee to cover a particular length of  time, the employer must examine every work week within that eligible timeframe and recalculate the employee’s overtime rate of pay for any non-exempt employee who was paid for over time.  
    • The Compensation Team will determine whether  an award is non-discretionary when the Award Program Proposal is reviewed, and will notify the  department.
Applicable Policies and Resources:

 
Honorarium Payment Guidance:
When to Use:
  • An honorarium is an ex-gratia payment made to a person for their services in a volunteer capacity or for services where fees are not traditionally required.
  • Guest lecturer/speaker is a common use of an honorarium payment.
Requirements/Limitations:
  • An honorarium cannot be paid to a university employee or a student.
  • The following documentation should be included when submitting to HokieMart to process payments:
    • If over $500, justification from sponsor, which includes the individuals experience, expertise and education.
    • IRS W-9 for US Citizens or W-8 for Foreign Nationals.
    • The Independent Contractor Form.
    • Invitation Letter and/or Agenda.
Tax Implications:
  • Honorarium payments are subject to US federal income tax withholding at 30% unless specifically exempted by an income tax treaty.
Applicable Policies and Resources:

 
In-Band Bonus Guidance:
When to Use:
  • Generally, a bonus should only be given under certain conditions such as:
    • When long-term funding is not available to support a permanent increase.
    • To compensate an employee taking on significant additional duties on a "temporary" basis.
    • When the employee is already being paid a premium salary well above market.
  • There are four justifications allowed by the Commonwealth of Virginia for in-band adjustments and any request must fit into one of the categories:
    • Alignment
    • Change of duties
    • Knowledge, Skills, and Abilities (KSAs)
    • Retention-high turnover, hard to fill positions
Requirements/Limitations:
  •  Can only be used for staff positions.
  • Not intended for those on restricted funds and it is subject to their funding agreement.
Applicable Policies and Resources:

 
Independent Contractor Guidance:
When to Use:An independent contractor can be used when a self employed person or entity is contracted to perform work for - or provide services to - Virginia Tech as a non-employee.
Requirements/Limitations:
  • A university employee or student cannot be paid as an independent contractor.
  • The employee or independent contractor checklist must be completed and submitted to Payroll for approval.
  • If the individual is deemed to be an independent contractor, payment should be processed through Accounts Payable.
FLSA/Tax Implications:
  • Exempt from FLSA requirements.
  • If an employee is classified as an independent contractor with no reasonable basis for doing so, the the employer may be held liable for employment taxes for that worker.
Applicable Policies and Resources:

Non-student Wage Guidance:
When to Use:
  • Can be short-term or project in focus, or may continue for several years.
  • Can be used as a primary job for new employees or as secondary employment for some current employees (with appropriate approval).
    • Full-time classified and university staff employees may work for the university outside of the normal work schedule on a wage basis in positions that are occasional and sporadic, for example, as a game-day parking attendant.
    • Part-time salaried employees may accept a wage position within the university as long as the total work hours for a part-time salaried employee may not exceed 40 hours per week on a regular basis.
    • For all non-exempt employees, additional university employment beyond 40 hours per week will be reviewed to determine overtime implications in accordance with requirements of FLSA.

Requirements/Limitations:

  • Total hours worked from May 1-April 30 is limited to 1,500 hours.
  • Must go through standard Virginia Tech recruiting requirements.
  • Banner Time Entry is used to record employee hours worked.
  • Appointments are compensated in accordance with the Wage Payroll Schedule.
FLSA Implications:
  • All wage employees paid on an hourly basis are considered to be non-exempt under FLSA and are to be compensated at a rate of one and one-half times the regular rate of pay for any time actually worked in excess of 40 hours within the defined university workweek.
Applicable Policies and Resources:

Recruitment and Retention Bonus Guidance:
When to Use:
  • Payment of a one-time incentive bonus for recruitment orretention of all faculty and university staff positions.
  • Recruitment bonuses include “sign-on bonuses” and “moving and relocation allowances.”
    • Recruitment language must be included in the official offer.
  • Retention bonuses include both pre-emptive offers and competitive offers from an outside institution.

Requirements/Limitations:

  • A length of service requirement of one year applies or employee is subject to a prorated payback fee.
  • Recruitment and retention bonuses require the completion of a MOA promissory note and approval by senior leadership. 
  • Retention bonuses also require completion of a P3A.
Applicable Policies and Resources:

Secondary Employment Guidance:
When to Use:
  • Full-time classified and university staff employees may hold occasional, sporadic wage positions outside their regular work schedule (e.g., game-day event support). Part-time salaried employees may also accept wage employment within the university.

Requirements/Limitations:

  • Part-time salaried employees may not regularly exceed 40 total work hours per week on a regular basis, or 29 hours per week if their part-time salaried position does not include health insurance.
  • Classified and university staff employees must use approved annual or compensatory time if the additional work, either for Virginia Tech or an outside entity, occurs during the normal work schedule of the employee’s regular fulltime or part-time salaried position. 
  • Additional Virginia Tech employment requires an approved secondary employment form, with documentation provided to the hiring department and Payroll. The secondary department is responsible for processing the wage appointment.
  • When overtime applies, non-exempt employees will be paid at time-and-one-half. Overtime costs are initially charged to the employee’s primary department, but the secondary department must reimburse those costs through a budget transfer.
Applicable Policies and Resources:

Sporadic Hire Guidance:
When to Use:
  • Used for occasional or sporadic work on a part-time basis,  typically for 10 hours or less per week. 
  • Can be used as a primary job for new employees or as  secondary employment for some current employees (with  appropriate approval). 
    • Full-time classified and university staff employees  may work for the university outside of the normal work schedule on a wage basis in positions that are occasional and sporadic, for example, as a game-day parking attendant. 
    • Part-time salaried employees may accept a wage  position within the university as long as the total work hours for a part-time salaried employee may not exceed 40 hours per week on a regular basis. 
    • For all non-exempt employees, additional university employment beyond 40 hours per week will be reviewed to determine overtime  implications in accordance with requirements of FLSA.

Requirements/Limitations:

  • Assignments must be infrequent, irregular, or occurring in  scattered instances. 
    • May occasionally exceed 10 hours during short periods of seasonal/peak employment cycles. 
  • Exempt from normal recruiting requirements.  
  • Banner Time Entry is used to record employee hours  worked. 
    • Appointments are compensated in accordance with the Wage Payroll Schedule.
FLSA Implications:
  •  All wage employees paid on an hourly basis are considered  to be non-exempt under FLSA and are to be compensated  at a rate of one and one-half times the regular rate of pay  for any time actually worked in excess of 40 hours within  the defined university workweek.
Applicable Policies and Resources:

Temporary Pay Guidance:
When to Use:
  • Given to full-time faculty and staff remaining in the same position but taking on additional duties on a temporary basis.

Requirements/Limitations:

  • For appointments that are anticipated to be for less than  one year in duration.
Benefit Implications:
  • Not eligible for VRS or ORP credit.
Applicable Policies and Resources:

 

The information above is intended to supplement existing policies and guidelines but does not supersede, modify, or override any provisions set forth in the applicable policies. In the event of any conflict or inconsistency, the university policies shall govern and take precedence.