Original Issuance Date: January 12, 2021
Last Revision Date: January 12, 2021
1. Policy Purpose
This policy establishes the circumstances and procedures under which a UW System Institution may compensate a foreign national for personal services; reimburse the individual for travel; award scholarships, fellowships, academic prizes and awards; or compensate the individual for work as a research subject.
2. Responsible UW System Officer
Associate Vice President and Chief Human Resource Officer
This policy applies to all UW System Institutions, including UW System Administration.
The UW System recognizes the value of the presence of international visitors, students and scholars on its campuses. Circumstances may arise in which a UW System institution seeks to hire, compensate, reimburse or issue awards to these visitors. The IRS has strict rules regarding payments to foreign nationals, and this policy is intended to allow UW System institutions to navigate these rules.
Alien: A person who is a citizen of a foreign country.
Non-Resident Alien: A foreign national present in the country via a nonimmigrant visa. This can include students, tourists, business visitors, exchange program participants, representatives of foreign governments or organizations, and temporary workers, among others.
Resident Alien: A foreign citizen who is a permanent or conditional resident of the United States, but does not yet have citizenship. These individuals will typically have a “green card” or will meet the “substantial presence” test. (See IRS Publication 519.) Payments to resident aliens are processed using the same mechanisms as payments to US Citizens, with the exception that the individual must maintain a Glacier individual record for payroll and tax purposes.
6. Policy Statement
1. Non-Discrimination in Employment
- No UW System Institution shall discriminate on the basis of national origin or citizenship status against individuals legally eligible to work in the United States.
- UW System Institutions shall only employ individuals legally authorized to work in the United States. This can include resident aliens, non-resident aliens whose visa type permits employment, or other non-immigrant visa holders whose visa type permits work upon receipt of additional authorization.
- The specific authorizations, limitations and requirements for employment will vary depending upon the individual’s country of origin and visa type. Hiring managers should work with their Business and HR Offices, as well as their institutional International Services Office to ensure that the proper employment parameters and requirements are met for each individual. (See SYS 238- Attachment 1.)
- All required authorizations (including an Employment Authorization Document, if required), and a United States Taxpayer Identification Number must be provided to the UW System institution before the individual begins work for the institution. (See SYS 238 Attachment 2).
- All foreign national employees, including both resident and non-resident aliens, must maintain a Glacier individual record for payroll and tax purposes, or a comparable account with a UWSA-approved third party software program to house the individual’s personal data, including current and historical U.S. visit and immigration information, tax filing status, and tax treaty eligibility.
- If payments are made in return for any service (e.g. teaching, research, administrative or clerical) then the payment is considered compensation and must be paid through payroll. Normal employment rules shall apply.
- If the scholarship/fellowship is a “qualified scholarship” per section 117 of the Internal Revenue Code, then no withholding is required, and the payment is not considered employment for visa purposes.
- Any portion of the scholarship that does not directly pay for tuition, fees, books, supplies, and equipment for the course is considered non-qualified, and is possibly subject to withholding and reportable on Form 1042-S.
4. Independent Contractor services/ Gifts/ Prizes/ Honorariums/ Royalties/ Research Participation Payments
- IRS W-8Ben form must be completed before the money is distributed if the recipient is a non-resident alien.
- These payments are 1042-S reportable and may be subject to withholding.
- Individuals holding visa types that are barred from receiving income from a US source are barred from receiving payments under this section.
7. Related Documents
Internal Revenue Code Section 1441 Non Resident Alien Withholding
Internal Revenue Code Section 1461 Reporting Requirements on Payments to Nonresident Aliens
U.S. Tax Guide for Aliens, Publication 519
SYS 238- Attachment 1, Foreign Nationals in Nonimmigrant Visa Classifications Who May be Lawfully Employed and/or Study in the US with Certain Restrictions
SYS 238 Attachment 2, Requirements for Payments to Nonresident Aliens
8. Policy History
First approved: January 12, 2021
9. Scheduled Review