New payment schedule pays CSO workers quarterly only

By Allison Sundaram and Mary Georgevich

Over 150 student workers who were mostly paid bi-weekly and monthly are now getting a paycheck only once a quarter, thanks to a new university employment policy that has yet to be finalized. The affected students not only had to wait ten weeks for their paycheck, but the changes have tax implications for students that were previously taken care of by the university.

The changes primarily affect students working for eight Chartered Student Organizations, including Associated Students, Santa Clara Community Action Program, KSCU and The Santa Clara.

Samantha Maciel, director of APB, said the changes have been hard on some of her staff because they've had to find jobs outside of APB.

"It makes it more difficult to have people who only work for APB," Maciel said. "People expected to be paid sooner, so some have had to get other jobs. A lot use the money for books and groceries."

Previously, student groups set the payment schedule, which ranged from once every two weeks to once per quarter, and pay was processed by Human Resources. Now, all payments are processed by the Center for Student Leadership, which oversees the eight CSOs.

"I simply don't have the human resources to administer 150 payments every two weeks," said Jonathan Gray, director of Center for Student Leadership.

Under the old system, students working for CSOs had been paid as stipend employees. Considered university employees, they received a W-2 form from the university. With the W2, all federal, state and social security taxes were withheld automatically from their paychecks by the university.

Now, the university is designating these workers "student stipend workers." No taxes will be taken out of their pay in advance, and they will receive a 1099-MISC form for their tax returns, leaving the responsibility for their taxes squarely on students' shoulders.

With a 1099 form, if a student makes more than $400, he or she must pay a self-employment tax that covers all of the Social Security and Medicare tax withholdings for which the university had previously been partially responsible.

Santa Clara Review Editor Lauren Karp said she was concerned over new tax implications because she no longer could go to Human Resources for advice. A 1099-MISC form, according to documents on the IRS web site, means the recipient generally is a "self-employed worker, also referred to as an independent contractor." The university does not pay taxes on students' wages as independent contractors.

Karp said she's "holding her breath" until she gets her paycheck, but added that she would do her job at the Review for free.

"I had serious problems when school started because I had to pay for my apartment and had to buy books," Karp said. "It's difficult, because it's not like we're getting less, but it's inconvenient."

The changes were the result of a committee decision involving administrators from the office of student life, human resources, financial aid, office of the controller, risk management, finance, the career center and the payroll department. Some positions, like orientation leaders, were changed to hourly, while nearly all CSO positions and a handful of others were turned to stipend workers, as opposed to employees.

Administrators applied a section of the Department of Labor's Field Operations Handbook to each chartered student organization position to examine whether there was an employment relationship with the student or not. The university then used this handbook and IRS codes to create criteria to use in determining if students were employees or stipend workers, which outlined whether the activity was part of the student's overall educational program, and who benefited from the activity.

No students were involved in the committee, although Jeanne Rosenberger, vice provost for student life, said she discussed the issue during her weekly meetings with Jenny Moody, AS president.

Moody said she has confidence that Gray and the rest of the CSL staff will do what's best for its students.

She added it was hard not getting a pay check as AS President, because she doesn't have time for another job.

"Being Senate Chair last year and getting paid on a regular basis was a lot easier," Moody said. "I don't do it for the money, but it's helpful for books and stuff like that."

Rosenberger and other members of the committee said the change was part of a review of student employment positions.

The committee has yet to finalize the handbook outlining student stipends, even though students will be paid during finals week.

Gray said the difficulty with the change has been combining IRS laws with the Department of Labor handbook, as the two have contradictory statutes.

Rosenberger said there isn't a firm date set to finish the stipend handbook, although it would be the end of the quarter at the earliest.

Gray said he has mixed feelings about the change. "It's a multi-layered, difficult issue, where I haven't been able to come to a single conclusion," he said. "Administratively, it creates a hardship for the Center for Student Leadership. For the students, I think it has the potential to be confusing."

Jeremy Herb contributed to this article. Contact Allison Sundaram at (408) 554-4546 or asundaram@scu.edu.