Administrative Policies and Procedures Manual - Policy 2480: Incentives for Program Participants

Date Originally Issued: 06-01-2008
Revised: 05-15-2015, 12-01-2016, 04-21-2017

Authorized by RPM 5.9 ("Sponsored Research") and RPM 5.14 ("Human Beings as Subjects in Research")

Process Owners: University Controller and HSC Senior Executive Officer for Finance and Administration

1. General

The University conducts research, including human subject research, and other non-research activities that require or benefit from participants taking part in the event.  Non-research activities might include, for example, a student poster presentation or a staff survey for which prizes are provided to encourage participation. To compensate for participation, cash payments and non-cash incentives may be provided to participants if allowed by a contract or grant, or other University funding sources, and made in accordance with applicable laws, regulations, and University policies.  Cash payments and non-cash incentives are collectively referred to as “incentives” in the remainder of this policy.

2. Allowable Incentives

Incentives provided to participants generally consist of checks, gift cards, or non-cash items. Typically, incentives are modest in amount, with a fair market value of less than $100.   All incentives should be carefully tracked and safeguarded.  Cash incentives must be handled and accounted for in accordance with UAP 7200 (“Cash Management”) and UAP 7210 (“Petty Cash Fund”).  These policies also apply to gift cards, which are considered cash equivalents.

Gift cards and non-cash incentives must be purchased directly by UNM with a purchasing card or purchase order.  UNM will not reimburse individuals for purchasing incentives.

If you have questions about incentives, please contact the appropriate financial services office.

The University complies with its obligations relative to patient inducements under the Office of the Inspector General Act and other applicable federal and state laws, rules, and regulations. Nothing contained in this policy shall be construed to authorize the payment or provision of incentives, payments, or other remuneration to or for patients at the UNM Health Sciences Center, except as is compliant with applicable federal and state laws, rules, and regulations and the Health Sciences Center Code of Conduct, and policies and procedures promulgated thereunder.

3. Required Documentation

3.1. Incentives of Less than $600 in a Calendar Year

When incentives to individual participants total less than $600 in a calendar year, departments should use the Participant Receipt Form (for less than $600) to track basic information for internal departmental use.  These forms collect the following information, which should be collected from each participant before the incentive is distributed:

• Name of the participant (or unique identifier for confidential studies).
• Participant's signature (or checkmark for confidential studies) acknowledging the receipt of the incentive.
• Date incentive was provided to the participant.
• Value (for cash) or fair market value (for non-cash) of the incentive.

The Participant Receipt Form (for less than $600) is for internal departmental use only, and should not be forwarded to any other office unless specified on the form.

3.2. Incentives of $600 or More in a Calendar Year

In the event that University distributes an individual incentive or series of incentives with a value (for cash) or fair market value (for non-cash) of $600 or more in a calendar year, the University is required by IRS regulations to submit a Form 1099 to the payment recipient.

Departments are responsible for tracking incentives to participants, and confirming whether any other incentives from the University occurred.  If individual or aggregate incentives from UNM equal $600 or more within a calendar year, departments must use the Participant Receipt Form (for $600 or more) and forward it as directed on the form within two (2) weeks after the incentive that meets this threshold is distributed.  Departments are responsible for protecting social security numbers in accordance with UAP 2030 ("Social Security Numbers").

If the payment is via Chrome River Invoice, it is not necessary to complete the Participant Receipt Form.

If the above information is not collected, the department conducting the program will be responsible for all penalties and accrued interest assessed by the IRS for non-compliance.    

3.3. Incentives from Multiple Projects

Participants must certify on the Participant Receipt Form (for less than $600) that they have not received or do not expect to receive, any additional incentives for services from UNM that would total $600 or more during the calendar year.  If incentives total $600 or more for the calendar year, then the Participant Receipt Form (for $600 or more) must be completed.  Alternatively, participants may accept an incentive that would limit the overall value of their incentives from UNM for the calendar year to less than $600.

3.4. Exception for Institutional Review Board Waiver of Signed Consent and Certificates of Confidentiality

Participants are NOT required to provide their names or social security numbers when participating in a study where the investigator has obtained and an institutional review board has approved either of the following:

1. A waiver of a signed consent according to 45 CFR 46.117(c) where no names are collected on the consent form.  Refer to http://www.hhs.gov/ohrp/humansubjects/guidance/45cfr46.html for more information.

2. A Certificate of Confidentiality issued by National Institutes of Health. Certificates protect against compulsory legal demands, such as court orders and subpoenas, for identifying information or identifying characteristics of a research participant. Refer to https://humansubjects.nih.gov/coc/index for more information.

Participants may use a checkmark instead of a signature to indicate confidential receipt of the incentive, or the principal investigator may sign to verify disbursement of incentives.

4. Tax Reporting

4.1.  University Employees

The value of all incentives given to participants who are University employees (faculty, staff, and students), regardless of amount, must be reported to Payroll.  Incentives to University employees must comply with all University policies, including those pertaining to compensation and conflict of interest.  Gift cards are considered cash payments by IRS and included in an employee’s taxable income.  (One exception is gift cards issued to customers in exchange for returned merchandise, such as by the University Bookstore.)  An employee can prevent these tax implications by refusing receipt of the incentive at the time it is offered or earned. 

4.2. Non-Employees

The value of certain incentives made to non-University employees may be reportable to the IRS.  As noted in section 3.1 above, incentives to any individual must be kept below $600 in any calendar year in order to not collect the necessary information for IRS Form 1099 reporting. 

4.3. Foreign Nationals

Contact the University Taxation Department in advance for reporting requirements and guidance regarding incentives to foreign nationals.  These incentives will be subject to tax withholding.  To the extent possible, incentives to individuals identified as foreign nationals must be reported to the University Taxation Department prior to the program or event.  Incentives to foreign nationals are made in accordance with UAP 2180 ("Foreign Nationals").

5. Confidentiality

Departments are responsible for complying with the Health Insurance Portability and Accountability Act (HIPAA), the Family Educational Rights and Privacy Act (FERPA), Office of Human Research Protections regulations, and other relevant laws and regulations pertaining to confidential information.  Do not include any protected information when reporting the information required in Section 3; however, departments are responsible for maintaining all required supporting information documenting incentives to participants, in accordance with the research protocol.

6. Unused, Stolen, and Lost Incentives

Unused gift cards and other incentives should be properly safeguarded, tracked, and managed.  Departments are encouraged to purchase only the number of gift cards or other incentives needed for the near term.  For guidance on the proper handling of unused gift cards and other incentives, departments should contact their Unrestricted Accounting Office. 

Stolen or lost gift cards and other incentives should be reported to Campus Police.

7.  Exceptions

All exceptions to this policy, other than those noted in the third paragraph of Section 3.4, must be approved in advance in writing by the Vice President for Research for the Main Campus and branch campuses, or by the Executive Vice Chancellor for Research for the Health Sciences Center.

8.  Attachments

Participant Receipt Form (less than $600 in a calendar year)

Participant Receipt Form ($600 or more in a calendar year)