Honoraria and stipends are frequently misunderstood terms that, when applied incorrectly, can lead to payment methods that breach government regulations and state employment law.
It is important to correctly assess the employee/employer relationship or lack thereof, in order to apply the correct payment method. Community Partners can issue honoraria and stipends on behalf of projects. A completed W-9 form submitted through DocuSign must be on file for anyone receiving a stipend or honoraria, regardless of the amount or the number of times paid during a calendar year.
Community Partners defines honoraria as a thank-you payment of nominal value for voluntary services. The definition is outlined in our policy as:
“Token payments of nominal sums (usually no more than $500.00) not reflective of the value of work done – usually as a thank you.” Honoraria most commonly serves as a gift and not compensation for services rendered or work produced.
Typically stipends are associated with academic-based positions or programs. In universities, the term is most often used for regular payments, over an academic year or longer, made to faculty or students. It is not used in relation to payments for employment. It can be used as a way to defer the student’s costs, but is not calculated based on an hourly rate and should not be budgeted as such.
Before, electing to use either honoraria or stipends, you should consult with your project liaison and the Community Partners HR team so as to avoid any employment law issues.