The University of Memphis

Extra Compensation and Outside Employment



POLICIES

Issued: June 28, 2011
Responsible Official: Vice President for Business & Finance
Responsible Office: Human Resources

Policy Statement


Policy Statement

Full-time employment with The University of Memphis demands an individual's full-time professional expertise, commitment, and energies. The assignable load of an academic year/9-month term faculty member, in combination with teaching, research, administration, and service constitutes a full-time assignment.

The University of Memphis also recognizes the value to its students, its personnel, and to the citizens of Tennessee arising from outside consulting and other professional experiences in which members of faculty and staff may engage. Such activities contribute to the quality of instruction, enhance the competency of the individual, contribute to the economic development of the State, and bring credit to the institution.  Therefore, under certain circumstances, faculty and administrative/professional staff may need to perform additional assignments for which extra compensation may be warranted. This policy contains the general provisions to cover these circumstances and limitations under which outside employment and/or extra compensation may be appropriate.

Extra compensation is generally not allowed by Federal grants; rather this is a rare and unusual occurrence.



Purpose


 

To set forth the general provisions to cover the circumstances and limitations under which extra compensation and/or outside employment may be appropriate.



Definitions


Extra Compensation

Payment by the University of Memphis for non-recurring work that is (1) outside the employee's normal work schedule and (2) not within the scope of the employee's standard work duties.  Work may be performed while employee is on annual leave or on leave without pay to avoid a conflict with normal work schedules.


Dual Services

The securing of an employee's services by another TBR, University of Tennessee, or other State agency or institution. Examples are: (1) an employee from the University of Memphis provides services for another TBR institution; (2) an employee from another State agency or TBR institution provides services for the University of Memphis. In either case, the University of Memphis must enter into a Dual Services Agreement with the other institution or agency for purposes of paying the employee. Upon completion of the services, the agency/institution providing the employee will bill the contracting agency/institution for the cost of the employee's compensation and benefits and then will pay the employee through its standard payroll process. This effort will be a component of the Effort Certification process of the agency/institution providing the employee.


Outside Employment

Includes consulting and any other external activity for which there is remuneration, these are work assignments with external employers or through external contracts that University employees assume outside of his/her normal work schedule. Payments for work performed are remitted by external employers or entities that are not directly related to the University of Memphis. Self-employment for the purpose of consulting or performing services is considered to be outside employment.


Moonlighting

A second job in addition to one's regular employment.



Procedures


Extra Compensation

 

Extra compensation charged to Federal grants is a rare and unusual occurrence and will only be allowed with prior approval from the sponsor. 

Positions Not Eligible for Extra Compensation

The following types of employees and work are not considered to be eligible for Extra Compensation:

  1. Clerical and Support Staff - Extra Compensation rules and processes do not apply. However, all hours worked by these nonexempt employees must be recorded on his/her time cards and overtime compensation will be paid as appropriate through the payroll system and at his/her base rate of pay. NOTE: If the staff member should be paid a higher rate of pay for the extra service, contact Compensation in Human Resources for guidance.
  2. Graduate Assistants and Student Personnel - The primary purpose for these individuals to be at the University is to be enrolled in an academic program. Therefore, they are normally ineligible for Extra Compensation.
  3. Certain Professional Activities - Normal, short-term professional activities such as participation in symposia, accreditation visits, speaking engagements, exhibitions, or recitals, even though honoraria may be received for such participation, are not administered as Extra Compensation.
  4. When Work is performed - Work performed when the employee is not within the term of his or her employment contract period or if the employee is on professional development assignment is not included under the Extra Compensation policy. NOTE:  See UM1493 - Summer Compensation for work performed by academic year/9-month term faculty during summer sessions and inter-sessions.
  5. Ineligible Administrative/Academic Professionals - The following staff may perform services, but they may not receive Extra Compensation:
      • President
      • Provost
      • Vice Presidents
      • Senior Vice Provost
      • Vice Provosts
      • Academic Deans
      • Executive Directors
      • Associate Vice Provosts
      • Assistant Vice Provosts
      • Associate Vice Presidents
      • Assistant Vice Presidents

Steps for Requesting Extra Compensation

The faculty or staff member shall notify appropriate supervisors of the nature of the employment and the expected commitment of time. Prior to accepting an extra assignment, the faculty or staff member must obtain approval from his or her supervisors. Supervisors may approve extra service only for efforts that:

  • Are performed entirely outside of, and in addition to, normal work schedules, assignments, and responsibilities.
  • Do not interfere with assigned duties and responsibilities or with regular University operations.
  • Are consistent with TBR policies and guidelines and with state law. TCA § 49-5-410  allows full-time faculty members to be paid for additional part-time work outside regular hours up to 15 clock hours per week, not to exceed 400 clock hours per any nine-month period, or teaching no more than two credit courses per semester for extra pay in an institution of higher education.
  • Do not constitute a conflict of interest or compete with the University's education, research, or public service programs.
  • Require only a reasonable time commitment from the employee.

Once the appropriate supervisor approves the extra service, faculty or staff shall initiate the Extra Compensation Authorization & Payment Request form.  

  • Initial authorization must be documented before services are rendered.
  • Faculty shall be required to carry a full teaching load, which shall be fifteen (15) credit hours or the equivalent per term for undergraduate courses, twelve (12) credit hours or the equivalent per term for graduate courses, or the equivalent per term.  All equivalent teaching load activities shall be subject to prior review and approval by the president (or his or her designee). Authority is delegated to department chairs and directors to determine equivalent teaching units (ETUs) for a full workload. Faculty and his/her chair must document the full workload that existed when the additional services were performed.
  • The employee providing the service and that employee's department head/chair are required to sign the certification of compliance..
  • Extra compensation charged to a sponsored agreement must be approved by Grants and Contracts Accounting prior to being paid.
  • The completed form must be submitted to the Payroll Office within 90 days after services are rendered.  Payments received by the payroll deadline will be paid the same month. Payments will be processed in the same manner as the employee's regular pay, i.e., direct deposit.

Extra Compensation Limitations

Retirement Credit

The University of Memphis must control the reporting of Extra Compensation earnings to retirement systems. For retirement reporting purposes, TCA § 8-34-101(14)(D) limits credit for compensation from extra services to no more than 25% of base pay. Faculty and staff may earn more than 25% in any reporting period, but no more than 25% will be credited to the Tennessee Consolidated Retirement System (TCRS) or Optional Retirement Plan (ORP), as applicable. 

Earnings Limitations

Employees may earn an unlimited amount of Extra Compensation; however, TCA § 49-5-410 limits full-time faculty work outside the University to 15 clock hours per week, not to exceed 400 clock hours out of any nine-month period, or no more than two credit courses per semester.


Dual Services

General

When faculty and staff at the University of Memphis perform services for another institution in the Tennessee Board of Regents (TBR) system or for another State agency, the two institutions must enter into a Dual Services Agreement. The faculty or staff who provides the service will be paid by his or her employer institution after the institution invoices the other party for the employee's gross cost of compensation and benefits.

Offices to Contact Regarding Dual Services Agreements

  • If the University of Memphis is the procuring agency, i.e., we are using faculty or staff from another state agency or institution, contact Procurement Services at http://bf.memphis.edu/procurement/index.php.
  • If the University of Memphis is the vending agency, i.e., one of our faculty or staff is providing services to another state agency or institution, contact the Office of Research Support Services at http://researchsupport.memphis.edu/.

The University of Tennessee

If the other institution is the University of Tennessee (UT), no Dual Services Agreement is required if:

  • the services are provided on an infrequent or irregular basis;
  • payment does not exceed $700.00 per credit hour; and
  • services involve teaching or instruction not in excess of two courses per semester.

Otherwise, the faculty or staff member must ensure that a Dual Services Agreement is executed between the University of Memphis and UT.


Outside Employment

The University of Memphis encourages its faculty and staff to undertake consulting and similar external employment for which they are qualified and that does not interfere with University responsibilities.  However, faculty and staff should not provide consulting services to an external organization when those services would conflict or be in competition with services offered by the University itself. See UM1692 Conflict of Interest Policy.

Prior to undertaking any outside employment, faculty and staff will notify his/her department head of the nature of the employment and the expected commitment of time. The following outside activities are not considered to be covered by the provisions in this policy: (1) normal short-term professional activities, such as participation in symposia, accreditation visits, speaking engagements, exhibitions, or recitals, even though honoraria may be received, or (2) activities carried on outside the employment contract period or while on leave from the University.

Outside Employment by Faculty and Administrative/Professionals:

  • Formal approval from the appropriate dean or director must be obtained when the aggregate amount of outside employment or consulting exceeds eight hours in the calendar month. However, prior notice of outside employment or consulting that will amount to less than eight hours in a calendar month shall be expected.
  • Before faculty members and administrative/professional staff begin outside employment, they must obtain the written approval of the department head and dean or director on a Request for Outside Employment/Consulting for Faculty and Administrative/Professionals. If the department head does not approve the proposed employment, the employee may seek approval from the dean of the college or the appropriate vice president. In the unlikely event a dispute develops regarding approval, faculty may contact the Faculty Ombudsperson, and administrative/professionals may contact the Manager of Employee Relations in Human Resources for assistance in resolving the conflict. 
  • When seeking approval, separate forms must be submitted for each type of service requiring a major commitment of time. A similar service rendered to several clients may be shown on a single form if each client requires only a minor commitment of time, as in many instances of professional consulting, private lessons, tax preparation, etc.
  • University property and facilities, e.g., offices, equipment, telephones, computers services, etc., may not be used in outside employment unless the use has been approved in advance. If such arrangements are approved, compensation to the University may be required at rates established by the University. University titles, offices, addresses, and telephone numbers may not be used in city directories for the purpose of publicizing non-University interests.
  • Consultants must make clear to any employer that the work to be performed has no official connections with the University. The University cannot assume any responsibility for private consulting services provided by members of its faculty or staff.
  • Outside employment that involves other agencies of Tennessee state government, including institutions of higher education, is subject to prior approval by both the president of the University of Memphis, or a designee, and the appropriate representative of the other agency. The two institutions will execute a Dual Services Agreement (see procedure above).
  • Outside employment must not result in any conflict of interest and must not interfere with any University teaching, research, service assignments, or administrative/professional duties. If outside employment conflicts with a faculty member's teaching schedule, specific arrangements for the classes must be approved by the department chair. Teaching, research, or service assignments should not be made principally for the convenience of faculty members wishing to engage in outside employment.
  • Administrative officers, including department chairs, may not employ through outside consulting or business activities, or be employed by, a faculty or staff member over whom they have direct supervision.

Outside Employment by Clerical/Support Staff:

Occasionally Clerical/Support staff have second jobs or engage in temporary work. Staff may engage in outside employment so long as doing so does not create a conflict of interest or interfere with his/her commitment to his/her job at the University of Memphis, which is considered to be the primary employer of full-time employees.

  • Formal approval to work a second job on a permanent or temporary basis is not required, but staff are expected to notify his/her supervisors in the form of a written memo that identifies the outside employer by name and describes the type of work and schedule requirements of the outside job.
  • Outside employment must not result in any conflict of interest with the UM image or mission.
  • Outside employment must not interfere with the employee's ability to perform UM job duties or meet work schedules.
  • University property and facilities, e.g., offices, equipment, telephones, computers, etc., may not be used in the course of outside employment.
  • If staff perform any work for another TBR institution or a Tennessee state agency, a Dual Services Agreement between the UM and the other party is required.
  • Staff may not engage in outside employment with another staff member with whom there is a reporting relationship at the UM. Example: A secretary may not perform outside employment as a bookkeeper at a consulting firm owned by her Uof M supervisor.
  • Staff may not represent themselves in outside employment as having any official connection to the UM.

Roles and Responsibilities

Principal Investigator/Program Director/Payee

  • Obtain required approvals for authorization and payment of extra compensation on Extra Compensation Authorization & Payment Request Form.
  • Ensure pay amount and timing of pay is commensurate with effort/work performed.
  • Submit pay request forms to Payroll or Human Resources (as outlined on the Form) by the required deadline – final deadline is no more than 90 days from date work was performed or by fiscal year end, whichever is shorter.
  • Ensure payment is requested subsequent to completion of the work but within 90 days of completion of work or by fiscal year end, whichever is first. 
  • Document full work load that exists as well as additional services to be performed for Extra Compensation.
  • Sign the certification of compliance on the Extra Compensation Authorization and Payment Request Form.
  • Notify the department chair/activity/head of outside employment prior to undertaking such employment via the Request for Outside Employment/Consulting for Faculty and Administrative/Professionals.
  • Ensure earning limitations are not exceeded.
  • Contact Research Support Services for work to be performed at another State of Tennessee institution/agency.
  • Responsible for repaying any Extra Compensation in excess of established limits.

  Administrator/Business Officer

  • Provide guidance/assistance to payee regarding use of the correct form to request work authorization and payment.
  • Provide guidance/assistance to the payee to ensure that payment limits are not exceeded.
  • Assist in ensuring that payment request forms are submitted by the required deadlines – the 5th of the month of intended payment, and in no case more than 90 days beyond the completion of the work.  Payment can only be requested once work is complete.
  • Ensure correct earnings codes are used on the payment request form.
  • Assist department chair/activity/head in determining earnings limitations are not exceeded.

 Departmental Chairs/Directors

  • Ensure pay amount and timing of pay request is commensurate with effort/work performed and within established limits.
  • Ensure payment is requested subsequent to performance of work, but no later than 90 days from completion of work or by fiscal year end, whichever comes first. 
  • Approve documented full work load as well as additional services to be performed for Extra Compensation.
  • Sign certification of compliance on Extra Compensation Authorization and Payment Request form.
  • Contact Procurement Services for dual service procurement from another State agency.

  Research Support Services

  • Upon receipt of information from UM employee providing services to another State agency, complete dual service documents for other State agency.
  • Ensure proposals comply with University or sponsor limits regarding extra compensation that may be requested/budgeted. 

 Grants and Contracts Accounting

  • Approve Extra Compensation Authorization and Payment Request Form prior to services performed to the employee that is charged to a Sponsored Program (based on approval by the sponsor.) 

Human Resources

  • Calculate the amount of Extra Compensation to be reported to employee retirement plans.
  • Monitor to ensure that Extra Compensation limits are not exceeded.

Payroll

  • Ensure correct earnings codes are used on the payment request form.

Procurement Services

  • Upon receipt of information from employing departments, complete dual services documents for services procured.


Related Forms


Dual Services Contract

When the University of Memphis is the procuring agency and the other party is a State of Tennessee agency or another TBR institution, obtain the Dual Services Agreement form at:

http://bf.memphis.edu/forms/procurement/dualagreement.html

When the University of Memphis is the vending agency and one of our faculty or staff is working for any other State of Tennessee agency or TBR institution, contact the Office of Research Support Services at the University of Memphis who will obtain the Dual Services Agreement from the other party.


Extra Compensation Authorization and Payment Request Form

http://bf.memphis.edu/hr/forms/extracomp.pdf


Request for Outside Employment/Consulting for Faculty and Administrative/Professional Staff

http://bf.memphis.edu/hr/forms/reqoutemp.pdf



FAQs


A full-time secretary is hired to perform work in addition to his full-time responsibilities. Does this policy apply?

Not for Extra Compensation. Secretaries are nonexempt, hourly paid employees. Hours for all work performed for the University must be recorded on his time card, and overtime will be paid if applicable. If the work is Outside Employment, refer to that section on how to notify your supervisor of the outside work.


A faculty member requests Extra Compensation to direct a grant, for which she receives release time. Does this policy apply?

No. This policy applies only to work completed in addition to the individual's full-time job responsibilities.


Is there a 25% limit on what you can earn in Extra Compensation?

The amount of Extra Compensation is no longer capped during the academic year, but the limits for Summer Compensation are still in effect.  SeeUM1493 Summer Compensation for those limits. However, TCA § 49-5-410 limits full-time faculty “moonlighting” to 15 clock hours per week, not to exceed 400 clock hours out of any nine-month period, or no more than two credit courses per semester.  The amount paid per credit hour is limited to a maximum of $675 per credit hour.


Will retirement credit be earned for all earnings from Extra Compensation?

Not necessarily. State law limits the amount of earnings from Extra Compensation that can be reported to the Tennessee Consolidated Retirement System (TCRS) and the Optional Retirement Plan (ORP). The maximum amount that can be reported is 25% of annual base pay even though you may have earned more than that.



Links


TBR Policy 5:01:05:00, Outside Employment and Extra Compensation

http://www.tbr.edu/policies/default.aspx?id=1456 


TBR Policy 5:02:04:10, Faculty Compensation During Summer Session and Inter-sessions

http://www.tbr.edu/policies/default.aspx?id=1488 


TBR Guideline G-030, General Instructions on Form and Execution of Contracts (for Dual Services)

http://www.tbr.edu/policies/default.aspx?id=1722


UM Conflict of Interest Policy 1692

http://policies.memphis.edu/UM1692.htm



Revision Dates


 UM1490 - Issued: June 28, 2011


Subject Areas:

AcademicFinanceGeneralHuman ResourcesInformation TechnologyStudent Affairs
  XX      XX