Payments to Research Participants Policy

OVERVIEW

Northern Illinois University (NIU) has various responsibilities when it comes to payments for research participation. One of those responsibilities involves ethical considerations tied to ensuring that paid research participants are provided the opportunity to earn compensation for their time that is deemed appropriate given the nature of the research and the time commitment. The Institutional Review Board at NIU is charged with making determinations about the appropriateness of payments to participants and ensuring that no undue influence or coercion occurs.

A second responsibility is to ensure that the University complies with applicable U.S. federal tax and immigration laws, and that research participants are aware of taxability of research participant payments.

POLICY STATEMENT

The purpose of this policy is to provide guidance to NIU faculty, staff, and students on the appropriate use of compensation in research and the methods for handling payments to individuals for their participation in a university sponsored research study. This policy will aid Principal Investigators (PI) in understanding how to manage financial payments while preserving NIU’s responsibilities under Internal Revenue Service (IRS) reporting rules and university regulations.

This policy is applicable when providing payments to human subjects for participation in research, regardless of the funding source.

PROVIDING COMPENSATION

Research participants must be paid at the end of each research session. Federal tax and immigration laws require compliance with the rules and regulations pertaining to processing compensation for participants in human subject studies. Failure to comply with these procedures may result in a violation of Federal Law. The process for paying Research Participants is dependent on the amount of Compensation awarded as well as the research participants’ employment relationship and country of residency.

Payments to Research Participants of $100 or less:

Safeguarding Cash and cash equivalents. Cash and cash equivalents must be securely maintained at all times. A single Custodian must be appointed and responsible for maintaining control and accountability of the cash or cash equivalents. Custodians are responsible for lost or stolen cash and cash equivalents and may be held personally liable for the value of any missing amounts. Any shortage must be reported immediately to NIU Police and Public Safety.

Recording and tracking payments. It is the responsibility of the PI to maintain accurate payment records. PIs must collect receipt/proof of payment from all research participants, including all cash and cash equivalent payments. If the payment is done in the form of a drawing amongst participants, the participant awarded the prize must sign a receipt. The investigator shall obtain a signed receipt from the individual indicating the participant’s name, the date, a description of what is received, and the amount received to document the payments.

1. The Research Participant participated in other research studies at NIU for which they received compensation,
2. The Research Participant is an NIU employee, in which payment should be coordinated with Human Resources, or
3. The PI knows that a participant is a nonresident alien, in which case the payment should be processed in accordance with the below, Payments to Nonresident Aliens (NRA) section.

Cases of Anonymity. In studies involving participant anonymity in which it is important to not record identifiable information nor obtain a signature on the informed consent, the investigator may collect receipts without participants’ names or other identifiers. The receipts will serve to document payment.

Returning unused funds. If an investigator has unused payments, cash must be returned regardless of the original payment format. It is the PI’s responsibility to return the unused funds in cash to the Cashiering Office accompanied by a completed Project/Grant Departmental Deposit Form. No gift cards may be returned. A copy of the deposit form and any cashiering office receipt should then be included with the participant receipts indicating all payments that went out in order to support the Research Advance reconciliation. Reconciliations mut be completed timely in accordance with the Cash Funds Policy and research cash advance funds should be maintained separately from any personal funds. If all funds have been used, only the full set of signed receipts must be submitted.

Payments to Research Participants in excess of $100:

Tax Reporting. For compensation payments that exceed $100.00 to individual subjects, tax information must be collected to ensure that the University can fulfill any state or federal income tax reporting requirements that may apply. PI's must request a Form W-9 from Research Participants, and if the University pays $600 or more to a U.S. tax resident during the calendar year, then the University is required to report the payment to the IRS and issue the recipient a Form 1099.

NOTE: If the Research Participant is an employee or nonresident alien, payment must be processed in accordance with the respective sections below.

Cases of Anonymity. In studies involving participant anonymity in which it is important to not record identifiable information nor obtain a signature on the informed consent, the investigator may collect receipts without participants’ names or other identifiers. The receipts will serve to document payment. If the Compensation exceeds $100, the participant must complete a Form W-9 (or Form W-8 for nonresident aliens (see below)), providing the participant’s name and TIN or SSN for tax reporting purposes. The identifying information for tax purposes should be submitted to Accounts Payable with the Check Request, but this identifying information should not be tied to the research data in any way.

Research Participant Payments to Employees

Payments made to Research Participants who are also employees are treated the same as payments for Research Participants which are not employees unless an employer/employee relationship exists within the study or participants are limited to employees only. In such rare cases, payments are reported on Form W-2, Wage and Tax Statement and subject to income tax and Medicare withholdings. For additional information regarding independent contractors versus employees, see the Independent Contractor policy.

Payments to Nonresident Aliens (NRA)

PIs are not required to inquire about an individual’s tax reporting status to participate as a Research Participant; however, if it is known that an individual is a nonresident alien or the researcher has reason to know that an individual is a nonresident alien, payments must be processed in accordance with this section.

It is known or the PI would have reason to know that a Research Participant is a nonresident alien through one or more of the following four manners:

• The IRB protocol’s inclusion criteria requires that Research Participants be nonresident aliens;
• The Research Participant self-identifies as a nonresident alien;
• The research being conducted provides information which identifies the Research Participant as a nonresident alien; or,
• The PI has other information available to know or have reason to know that the Research Participant is a nonresident alien.

All payments to Research Participants who are nonresident aliens, regardless of the amount, are required to be processed via Check Request through Accounts Payable Services. Prior to making a payment to a nonresident alien, the PI must request a completed IRS Form W-8BEN. Tax reportable payments will be subject to tax withholdings and reported to the IRS on Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding. If an individual’s payment is subject to a U.S. Tax Treaty or not considered U.S. source income, the payment may be exempt from or have a reduced withholding rate. Nonresident aliens may request an exemption to this withholding based on a tax treaty. The following must be submitted to Accounts Payable Services prior to a payment being made:

• Foreign National Tax Assessment Form
• IRS Form 8233
• IRS Form W-8BEN

The confidential nature of a study does not exempt the University from the IRS tax reporting requirements.

ETHICAL CONSIDERATIONS

There are circumstances where researchers may choose not to provide compensation. For studies that result in risk, discomfort, or inconvenience, it may be necessary to justify not providing any compensation. When a research participant will not be compensated for participation, they should be informed of such during the informed consent process.

Payments that are too high can result in participants putting themselves at risk of harm or in a position where they engage in activities that go against their personal values or beliefs. From the researcher’s perspective, payments resulting in an undue influence can undermine the scientific integrity of a study by encouraging people to provide false information on screening or study materials.

For multi-session studies, participants cannot be required to complete all sessions in order to receive any compensation. Partial payments for each session should be provided. It is acceptable to offer a small extra compensation for completing the full study.

Researchers must provide details about compensation in the IRB application including the amount being offered, the reason for the amount, the method of payment, and what happens if they fail to complete the study. 

For research involving drawings, researchers must make it clear what the odds are of winning (e.g., an approximation of the anticipated sample), when the drawing will occur, and how participants will be notified.

The information given to the subject or the representative shall be in language understandable to the subject or the representative.

Vulnerable populations. It is the responsibility of the researcher to ensure that research involving vulnerable populations (children, prisoners, mentally disabled persons, economically or educationally disadvantaged individuals) includes compensations that are accessible to the target population. For example, payments that require access to a bank account may not be accessible to some.

DEFINITIONS

1. Cash equivalent. Checks, gift cards, money orders or any other instrument that when presented can be substituted for cash.
2. Compensation. Payment or non-monetary reward to individuals as remuneration for time and inconvenience of participation in research studies. Compensation may be monetary (cash or cash equivalent) or non-monetary (course credit, promotional item).
3. Custodian. Person responsible for securing cash/cash equivalents used for research participant payments at all times. The custodian must be a faculty member or full-time employee of the University and is generally the PI requesting the Research Cash Advance.
4. Drawing. A chance selection of one or more participants from a pool of participants. The selected individual(s) wins a prize (cash, cash equivalent, item). The terms “raffle” and “lottery” should not be used because these terms imply that tickets must be purchased to win the prize.
5. Eligible participant. Individuals are eligible to participate in paid research studies if they are U.S. citizens, permanent resident aliens (hold a Green Card), or nonresident aliens.
6. Nonresident Alien (NRA). An alien is any individual who is not a U.S. citizen or U.S. national. A nonresident alien is an alien who has not passed the green card test or the substantial presence test.
7. Payment. Payments to participants include both cash and cash equivalents (gift cards, electronic transfers, checks, etc.).