F. Compensation

11.   Pay Distribution The University System encourages all employees to participate in the electronic direct deposit program for their payroll payments. USNH considers this the standard method of pay and, unless directed otherwise by the employee, will request information necessary to establish direct deposit at the time of employment. Electronic direct deposit provides many benefits to the employee. It is a free service that offers the fastest, safest, and most dependable method for employees to receive their payroll payments. It eliminates the possibility of a lost or stolen check and allows employees to direct fixed amount portions of their payroll payments to multiple financial institutions if desired. The campus Human Resources office will be responsible for determining how information about payroll options will be communicated to employees. For those employees not able to take advantage of direct deposit, the USNH standard method of pay distribution, a paper payroll check will be generated and mailed to the employee's designated campus or home address on the appropriate Friday. Checks will normally not be distributed to employees earlier than the official payment date for that particular pay period.

11.1   Pay Year/Periods. The pay year is either fiscal (July 1 through June 30) or academic (specific dates, provided annually by each campus which encompass the beginning and ending dates of the academic year). USNH pays faculty and staff members on a bi-weekly basis.

11.1.1   Salaried (exempt) employees receive their pay on the pay period ending date and are paid through the date the pay period ends.

11.1.2   Hourly (non-exempt) employees receive their pay the week after their pay period ending date and are paid for work performed through the pay period end date including any additional pay such as shift, overtime, etc.

11.2   Compensation Schedules. USNH faculty and staff shall normally be compensated during the payroll periods inclusive of their appointment beginning and ending dates.

11.2.1   Hourly staff members are paid through a positive pay process, which means that payment is the direct result of the entry of hours worked into the payroll system.

11.2.2   Continuing status faculty and PAT staff who are either a flex year (percent time) employee or are employed on an academic year basis may elect to "spread/defer" their pay and receive their regular budgeted salary over a 12 month pay schedule. There shall be an annual process which allows such faculty and PAT staff to change their compensation schedule; such changes must be made before the pay year begins. Once elected, that schedule cannot be altered by any circumstance, except leave without pay, until the next election period. In the case of leave without pay, there is no option to distribute or "spread" pay.

11.3   Pay Advances. Except as provided below, in no instance shall an employee receive advanced compensation before the requisite amount of service has been rendered.

11.3.1   Exceptions. In exceptional situations, it is possible to pay a portion of a continuing faculty/staff member's salary not to exceed the anticipated net pay before the requisite service has been rendered if the circumstances are known in advance and approved in writing by the appropriate supervisor, campus official and System official.

11.4   Pay Deductions

11.4.1   Authority. Various types of payroll deductions and withholdings may occur during the pay year. The payroll office shall be responsible for interpretations and applications of required deductions. Federal and State statute require the payment of certain taxes and these shall occur each pay period as appropriate.

11.4.2   Tuition Taxability. USNH is required by federal law to add the value of waived tuition to the employee's paycheck for federal taxation purposes if the employee, spouse, or dependent child is enrolled in a graduate program and is considered by the enrolling institution to be a matriculating graduate student.

11.4.3   Fellowship payments provided to "degree-candidates" are exempt from tax withholding only to the extent they are used for tuition and related instructional expenses, fees, books, supplies, and equipment. Amounts used for room, board, or other living expenses are subject to income tax. Non-degree candidates receive no income tax exemption. USNH is not responsible for reporting the compensation to recipients via either the Form 1099 or the Form W2; the recipient is responsible for reporting the income to IRS when filing the annual tax return. USNH is also not responsible for withholding any taxes from these payments if said payments are taxable; the recipient is responsible for making tax deposits directly to IRS. Payments made to non-resident aliens are reportable to IRS by USNH via Form 10425 and generally taxes must be withheld when the payment is made.

11.4.4   Prizes, gifts, and awards provided to employees by USNH must be paid through the USNH Payroll system and are taxable and reportable to the IRS. The IRS requires reporting of these payments on the employee's Form W2 and to withhold employment taxes. Two kinds of awards, "length of service" and "safety" may be nontaxable provided they meet IRS's plan requirements; for instance, to qualify for exemption, a length of service" award would have to be given to an employee with more than five years of service and cannot be provided more frequently than every five years. IRS regulations will determine if an award is exempt from taxes.

11.4.5   Non-cash fringe benefits provided to employees are taxable income and must be reported to IRS on the employee's Form W2. The fair market value of a non-cash fringe benefit is defined by IRS regulations as "the amount that an individual would have to pay for the particular fringe benefit in an arm's-length transaction." IRS provides special valuation rules that may be used to determine the benefit's value. Non-cash fringe benefits include, but are not limited to, personal use of company car, chauffeur services, meals provided at a company operated eating facility, etc. IRS regulations will determine reporting and employment tax withholding requirements of employer provided fringe benefits.

11.4.6   Court Mandated Withholdings. Required withholdings such as those mandated by a probation court, levies or garnishment of wages, etc. shall occur by court order and as specified by the terms of that order.

11.4.7   Overpayment. Payroll deductions for overpayments resulting from administrative error are governed by standards in NH RSA 275:48. An employee may write a check for the overpayment or agree to payroll deductions to recover the overpayment. Repayments made by payroll deductions require a voluntary, written repayment agreement from the employee and may not exceed 20% of the employee’s gross pay for a pay period. The agreement must include: (1) the dates the deductions will begin and end, (2) the amount of the deduction as agreed upon by the employee and employer, and (3) an agreement as to whether the employer can take the remaining balance from the last check in cases of termination or retirement. The payroll deductions will begin one pay period after the date of the written agreement. Should an overpayment not be recovered through payroll deductions or via personal check, USNH will pursue payment through Campus Credits and Collection or the court system.

11.4.8   Benefit deductions will occur as authorized by the employee's enrollment in the fringe benefit program and as defined by the plan year.

11.4.9   Optional Benefit and Activity Deductions. Additional payroll deductions for optional benefits and/or campus-related programs (parking, cultural arts campaign, etc.) shall occur as designated by the specific program and/or employee's written authorization. In general, the amount of the deduction should be in whole dollar units.

11.4.10   Professional Organizations. Dues deductions for professional organizations are governed by the Administrative Board or by labor contract agreement, and are currently defined by contract or else during a four-pay cycle during October and November each year. No new deductions may be added without formal approval.

11.4.11   Written Consent Deduction -- Worker's Compensation. A faculty or staff member who is collecting wages from Workers' Compensation will not have certain payroll withholdings or payroll deductions occur until and unless he/she has provided written consent to do so.

11.4.12   Termination and Tuition Benefit. A faculty or staff member who terminates during a semester in which the educational benefit is being used shall be eligible for a pro-rated portion of the benefit. The employee will be expected to pay for the pro-rated course value granted to self, spouse, or dependent child for the remaining portion of the semester.

11.5   Pay Effective Dates. The effective date for all increases/decreases shall normally be the calendar day on which the personnel transaction occurs as defined by policy or as specifically authorized by the Board of Trustees or their administrative designee.

11.6   Deceased Faculty/Staff. Upon the death of an employee, the payment of wages for service rendered shall be made based on provisions of relevant federal and/or state statute(s). In addition, a sum equal to the number of days of accrued annual leave (vacation or earned time) will be paid, using the same provisions as prescribed by termination of employment.

11.7   Honorarium Pay. Honorariums, when paid to employees, are processed through the payroll system and not as an accounts payable.