GAP 101.6, Supplemental Payments To Exempt Employees

Contents

1. General
2. Supplemental Payment iForms

I. General

Supplemental Payments are used to pay for services rendered for exempt (monthly) staff, faculty, and students in the following situations:

• To pay an exempt employee already on the monthly payroll at a rate of pay for additional work performed for Duke University or Duke University Health System. The work may be done in the employee’s primary department or may occur in a different department.
• To pay an individual (including students) as an employee for performing exempt work that does not qualify as an independent contractor per GAP 200.128, Guidance on the Independent Contractor Checklist.
• To issue a bonus payment to an exempt employee.

Please note:  Management centers may have separate supplemental pay policies.  The management center policy should be used to supplement this procedure.

Supplemental payments should not be used in the following situations: 

• To issue payments to non-exempt (hourly) employees. Non-exempt employees that are performing additional work for Duke University or Duke University Health System must be set up in secondary positions using the Secondary Position Form. This is critical to ensure payment for any applicable overtime hours. For more information, review GAP 101.2, Staff Changes.
• External consultants with which the University does not have an employee - employer relationship per GAP 200.128, Guidance on the Independent Contractor Checklist. Use the Accounts Payable Check Request or a Purchase Requisition for this type of payment. GAP 200.135, Acquisition of Goods and Services Overview will assist you in determining how to appropriately pay the consultant. GAPs 200.130 through 200.134 (see Consultants Procedures) provide instructions regarding engaging and paying consultants.

II. Supplemental Payment iForms

The majority of supplemental payments should be processed via the Supplemental iForm. When processing supplemental iForms, use the following guidelines:

• Departments can access all current Duke Employees (staff and students) via iForms for the purpose of issuing a supplemental payment.
• Supplemental iForms must be approved by the department issuing the supplement and the employee’s primary department.
• Supplemental payments can be set-up as one-time or recurring payments.
• Supplemental payments are paid in conjunction with the pay day for the exempt employees (typically the 25th of each month).
• Supplemental payments should not be paid in advance of the work being performed.
• A complete explanation of the work performed and the dates of service must be included for all supplemental payments.
• Supplemental iForms for the current month are due to Corporate Payroll Services based upon the Payroll Schedule.
• Forms received after that date will be returned to the initiator of the form and can be resubmitted the following month.
• Supplemental payments will be taxed based upon specific IRS regulations for supplemental payments:
• Payments in addition to base compensation will be taxed at the regulatory Flat Tax Rates that are in place at the time the payment is issued.
• Payments to individuals on a zero rate of pay will be taxed based upon the federal and state tax withholding information submitted by the individual on file in Duke’s Payroll System - SAP.  If supplemental payments are charged to an incorrect funding source, the department will need to complete a Manual Salary Cost Transfer iForm.
• In the following situations, a Supplemental Payment Paper Form is required:
  • To issue payments for Administrative Faculty Pay and the Parsonage Allowance.