Payroll Vouchers - OV7

Professional Services Payment Document

Make payments to casual and regular employees of the university who perform professional services that are short-term (two weeks or less) or sporadic in nature, or when services provided by former employees are applicable, and as noted below.

Classification of Individuals

When an individual has been authorized to perform services for the university via the Authorization for Individual Services (AIS/PBS) electronic document, the Authorization for Professional Services (APS) form, or a business contract through the Office of the Vice President and Chief Financial Officer (VP & CFO), departmental personnel must complete the Employee/Independent Contractor Classification Checklist (EICCC) to determine if the individual will be classified as an independent contractor or an employee. Individuals should also be assigned to a University Affiliate position in the Human Resource Management System (HRMS) with the appropriate position subtype for reporting and tracking. Note, these positions are not paid via the assignment to the Hourly or Monthly University Affiliate position.

The EICCC incorporates the Internal Revenue Service (IRS) guidelines governing proper classification of individuals, and misclassifications could result in serious repercussions for the university. According to IRS guidelines, if services are classified as employee work, then they are subject to employment taxes. These payments are considered casual employee payments, and must be paid via Payroll Services on an OV7 so that they are taxed and reported properly. Payments to independent contractors are made via the Office of Accounting and Financial Management on VP2 documents.

Guidelines for Different Types of Employees

Casual Employees (not assigned to an hourly or monthly paid position in HRMS)

  • Professional services are short-term (two weeks or less), occasional or sporadic in nature.
  • Services are performed under the control of the university and at the university’s discretion.
  • The individual typically is not the owner of a business that provides similar services to the public.
  • Payment of the services is deemed being in the best interest of the university.

Current Employees

In order to pay current employees for professional services, the following conditions apply:

  • Professional services provided are outside regular employment.
  • Services are short-term (two weeks or less), occasional or sporadic in nature where employees freely and solely at their own option enter into agreement of the work.
  • Services are for another department, unless normal job duties routinely cross departmental lines.
  • If services are similar to regular job duties/within the same general occupational category as the employee’s regular work and cause non-exempt employees to work a total of more than 40 hours for the university overall within one workweek, employees must be compensated at time-and-a-half.
  • Services for the same department or administrative unit are for continuing education activities only.
  • Exceptions may be made on a case-by-case basis for continuing education, dissimilar services within the same department, or for services for another department that are more than two weeks and dissimilar or exempt in nature.

Former Employees

Former university employees will continue to be paid through Payroll if:

  • they have been paid through Payroll during the current calendar year.
  • they were employed during the prior 12 months.
  • they are performing services similar to those performed while an employee at the university.
  • a continuing relationship with the university exists.
    • Continuing relationship exceptions may be granted on a case-by-case basis after 12 months of separation and when services are not similar to those performed while an employee of the university.

Musical Performance Exceptions

The IRS recognizes certain performances as an independent service, separate from the employee/employer relationship. Individuals providing musical services for a performance (e.g., vocal soloist or cellist) may be classified as an independent contractor and paid via a VP2, regardless of their current or former employee status with the university, by using object code 1341 (Performers Fees) and including documentation on the VP2 regarding the musical performance. However, if the individual is a nonresident alien for tax purposes, payment cannot be processed on a VP2, and must be on the OV7 so that he/she is properly taxed.

Required Documentation

In order for an OV7 to be reviewed and approved for processing, the following documentation must be received in Payroll Services:

Contact Information

Departmental personnel may contact Payroll Services for assistance in determining whether or not an OV7 is appropriate, particularly when a regular employee is providing additional services.

Helpful Hints

  • Accounts, service dates and amounts on the OV7 should correspond with the accounts, dates and amounts that were pre-authorized on the AIS/APS. If any of this information from the AIS/APS needs to change for the OV7 payment, it must be updated on the AIS/PBS as well.  
  • The service dates on the OV7 should be the entire date range during which the employee(s) performed services for which they are being paid. When dates span more than one month, they must be broken down month-by-month in the worksheet.  
  • Payment cannot be processed without the employee’s signature certifying services were rendered. Invoices may be submitted as supporting documentation and may include a signature, but an unsigned invoice cannot be used in lieu of a signature.  
  • Departmental personnel must collect the required information from the individual providing the services and complete the EICCC. The EICCC should not be completed by the individual providing the services.  
  • OV7 documents are reviewed and final approved in Payroll Services, so be sure both the electronic document and supporting documentation is routed to Payroll by noon on the semi-monthly deadline.
  • To comply with the Affordable Care Act, UT Austin must be able to track all hours worked for employees, regardless of any existing full-time, part-time, exempt or non-exempt status. The document to pay casual employees (OV7) requires entry of hours worked.

Additional Resources

 

Related: Overview, OV1, OV2, OV5, OV6, OV7, Manual Voucher