1. Hiring and paying research related consultants 1 WEBINAR OFFERED BY OSP, ACCOUNTS PAYABLE, AND SOURCING MARCH 4, 2016 2:00 PM

2. Two processes now available for hiring research-related consultants I.A new simplified process, for small engagements ($25,000 in expected total cost) of individuals (not companies) that are less than 12 months in duration II.The traditional sourcing process, beginning with a shopping cart, offering electronic vendor registration for the consultant, and resulting in issuance of a PO (or a contract for larger and/or more sensitive engagements) III.This webinar walks through the details of the new process, and provides guidance on when to use which process 2

3. Independent Contractor Test for all Consulting Engagements o IRS regulations require all employers to determine whether an individual hired to provide services should be treated as an employee, or may be treated as an independent contractor. o The IRS published guidance identifies 20 factors to consider when deciding if an individual is an employee or an independent contractor o At BU, Accounts Payable evaluates each consulting arrangement as a first step in the hiring process, based on engagement’s scope of work, and the responses to the questionnaires that are a part of each process 3

4. Compliance requirements to keep in mind for all research consulting o Does this time frame of this consulting arrangement fall within the award dates of sponsored agreement? o Does the sponsored award have any restrictions on the use of consultants? Was it in the proposal budget? Does it require approval by the sponsor? Are you allowed to re-budget into this category with or without sponsor approval? o Was this originally proposed as an outgoing subcontract? Does the sponsor need to approve this change? o If the consultant is responsible for the design, conduct or reporting of research as defined by Boston University policy, then the consultant should have completed financial interest disclosure forms and training (depending on the sponsor) as described at: http://www.bu.edu/orc/programs-committees/coi/.http://www.bu.edu/orc/programs-committees/coi/ 4

5. I. Combined Questionnaire & Contract When to use: - For research-related engagements of $25,000 or less and 12 months or less - Where the consultant is an individual, not an LLC or corporation Advantages: - Department may complete most of the paperwork - Consultant deals primarily with the hiring department and PI - Terms are simplified and standard; no complex contract negotiation is required - On-line registration by the consultant is not required - Shopping cart/PO process in BUworks is not required 5

6. I. Combined Questionnaire & Contract Process Steps o Department completes sections A-C (description of engagement & consultant basic terms) o Consultant attaches Resume/CV, completes sections D and E (E will be one question if they are a faculty member at another institution) o Consultant signs and dates form and returns to BU department contact o Department sends form to Accounts Payable o Accounts Payable reviews form for independent contractor status, and communicates result to the department o If independent contractor test is met, AP registers the vendor, and invoices may be submitted by the department to AP using an AP disbursement form, accompanied by a copy of the approved questionnaire and contract. o If the consultant must be paid as an employee, the department should work with their payroll coordinator to hire the individual through Kelly Services or the HCM module of BUworks o Invoices (after departmental approval) should be submitted to Accounts Payable on a disbursement form and will be paid on a “net 30” basis (30 days after the invoice date) 6

7. II. Shopping Cart/PO Process When to use: - For research-related engagements for $25,000 or more, or lasting longer than 12 months, and all non-research related agreements - Optional for small research related engagements when a fully electronic process is preferred. Advantages: - Fully electronic – no paper forms - Reduces the risk of lost paperwork and delays in processing of invoices for payment 7

8. II. Shopping Cart/PO Process Steps The department should submit a shopping cart. Once submitted, an electronic questionnaire will be sent by AP to the consultant. The consultant completes the online questionnaire. o Accounts Payable reviews questionnaire for independent contractor status, and communicates result to the department. o If independent contractor test is met, consultant will receive a Boston University PO from Sourcing/Procurement. Invoice(s) for services should be sent directly AP referencing the PO number. Department approval will be through BUworks workflow, and the invoice will be paid using 30 day payment terms. o If the consultant must be paid as an employee, the department should work with their payroll coordinator to hire the individual through Kelly Services or the HCM module of BUworks. 8

9. Non-US research related consultants For research consulting arrangements outside the US, special rules may apply, depending on the laws and regulations in the country where the consulting engagement is taking place Failure to understand and follow those laws and regulations places the University and the individual at risk for taxes, fines, and possible legal penalties BU’s Human Resources department has recently released a toolkit for departments hiring service providers outside the US Toolkit is available at this website: http://www.bu.edu/hr/manager-resources/hire-a-worker-for- a-non-us-location/http://www.bu.edu/hr/manager-resources/hire-a-worker-for- a-non-us-location/ Be sure to consult the materials at this website before engaging a consultant for work outside the US, for the protection of the University, your department, and the consultant 9

10. Other types of research service providers o Most non-employee services providers on research agreements are independent contractors o Departments should also be aware of two other types of payments to non-employee service providers and how they are paid; o 1. Honoraria (paid on a disbursement form; no pre-qualifying steps are necessary) o Generally, and individual can be paid an honoraria if the individual has been asked to address a class, make a presentation, or give a lecture, on a one time or limited basis, with no other responsibilities. o 2. Subcontracts (established through OSP and sponsor, issued as an outgoing subcontract aligned with the prime award, and paid as a PO invoice) o Questions to ask, to determine whether the arrangement is a subcontract: o Is the work being performed by the individual an integral part of the research project's scope of work? o Will the consultant have programmatic decision-making responsibility? o Will the consultant manage the technical and administrative aspects of a portion of the overall project? o If a faculty member at another academic institution, are these services a part of their commitment to that institution, or outside of that commitment? 10

11. Resources for more information For more information on research-related consultants, honoraria, and subcontracts, contact: ◦Accounts Payable at Apupload@bu.eduApupload@bu.edu ◦Sourcing & Procurement at Sourcing@bu.eduSourcing@bu.edu ◦Office of Sponsored Programs (OSP) at ospinfo@bu.eduospinfo@bu.edu Websites referenced in this webinar include: Details for all processes: http://www.bu.edu/ap/resources/research-related-payments/http://www.bu.edu/ap/resources/research-related-payments/ Simplified form for research-related engagements under 12 months and less than $25,000: http://www.bu.edu/ap/files/2016/02/RRCP1.pdf http://www.bu.edu/ap/files/2016/02/RRCP1.pdf 11