Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

Federal Work-Study Program - Paying Students

AwardYear: 1997-1998
EnterChapterNo: 7
EnterChapterTitle: Federal Work-Study Program
SectionNumber: 3
SectionTitle: Paying Students
PageNumbers: 15-19


For information about determining the federal share and institutional
share of Federal Work-Study (FWS) payments to students, refer to
Section 5 of this chapter.

ESTABLISHING WAGE RATES

Undergraduate students are paid FWS wages on an hourly basis only.
Graduate students may be paid by the hour or may be paid a salary.
Regardless of who employs the student, the SCHOOL is responsible
for making sure the student is paid for work performed.

[[Determining work schedule]]
A school should determine the number of hours a student is allowed
to work based on the student's financial need and on how the
combination of work and study hours will affect the student's health
and academic progress. There are no statutory or regulatory limits on
the number of hours per week or per payment period a student may
work, provided no overaward occurs. (See Section 2 of this chapter.)

[[New minimum wage--CB-96-23]]
A student must be paid at least the current Federal minimum wage,
but there is no maximum wage rate. From October 1, 1996 to August
31, 1997, schools are required to pay students employed under the
FWS Program at least the Federal minimum wage of $4.75 per hour.
Beginning September 1, 1997, schools must pay at least the Federal
minimum wage of $5.15 per hour (refer to "Dear Colleague" letter
CB-96-23, dated November 1996). As noted in Section 1, it is not
permissible to pay a lower "subminimum" or "training" wage to
students in FWS jobs. A school may not count fringe benefits as part
of the wage rate and may not pay a student commissions or fees. In
determining an appropriate rate, the school must consider the
following:

- the skills needed to perform the job,

[[Pay related to skills]]
- how much persons with those skills are paid in the local area for
doing the same type of job,

- rates the school would normally pay similar non-FWS employees, and

- any applicable federal, state, or local laws that require a specific
wage rate.

A student's need places a limit on the total FWS earnings permissible
but has no bearing on his or her wage rate. It is not acceptable to
base the wage rate on need or on any other factor not related to the
student's skills or job description. If a student's skill level depends on
his or her academic advancement, the school may pay a student on
that basis. For example, a junior or third-year lab student may be
paid a higher rate than a sophomore or second-year lab student.
However, in most cases, students performing jobs comparable to
those of other employees should be paid comparable wages, whether
the other employees are students at different class levels or are
regular employees.

DISBURSEMENT

[[Pay student at least monthly]]
A school must pay a student at least once a month. The federal share
of FWS compensation must be paid by check or similar method*1* that
the student can cash on his or her own endorsement. The school may
not directly transfer the federal share to a student's account at the
school, nor may it obtain a student's power of attorney to authorize
any disbursement of funds unless the U.S. Department of Education
has granted prior approval. the Department would not grant such a
power of attorney (to allow a school to act on behalf of a student)
unless the school could demonstrate that there is no one else (such as
a relative, landlord, or member of the clergy, for example) who could
act on behalf of the student.

If the school pays its share of FWS wages by CHECK, it must pay
the non-federal share to the student at the same time it pays the
federal share. (See Section 5 of this chapter for a discussion of
federal and institutional shares of FWS compensation.) FWS wages
are earned when the student performs the work. A school may pay
the student after the last day of attendance for FWS wages earned
while he or she was still in school. However, when a student has
withdrawn from school, FWS funds may not be used to pay for work
performed after the student withdrew. A correspondence student
must submit the first completed lesson before receiving payment.

[[Noncash contribution]]
If the school pays its share of FWS wages for an award year in the
form of a NONCASH CONTRIBUTION (tuition, fees, services, or
equipment), it must do so before the final payroll period of the award
year. If the school pays this share in the form of PREPAID tuition,
fees, services, or equipment, it must give the recipient--again, before
the end of the final payroll period--a statement of the amount of the
noncash contribution earned. (For more information on using
noncash contributions as part of the school's share of FWS wages,
see Section 5 of this chapter.)

[[Payment period crosses award years]]
When a payment period is in two award years (that is, when it begins
before and ends after July 1), the student is ordinarily paid for
compensation earned through June 30 with funds allocated for the
first award year and for compensation earned beginning July 1 with
funds allocated for the following award year. For example, for a
payment period extending from June 15, 1997 to July 15, 1997, a
student would ordinarily be paid with the school's 1996-97 allocation
through June 30 (the end of the 1996-97 award year) and with the
school's 1997-98 allocation beginning July 1, 1997 (the beginning of
the 1997-98 award year).

[[The graphic "Payment Period in Two Award Years" on page 7-17
is currently unavailable for viewing. Please reference your paper document
for additional information.]]

[[May carry back funds for summer]]
A school may "carry back" funds for summer employment; that is, it
may use any portion of its initial and supplemental FWS allocations
for the current award year to pay student wages earned on or after
May 15 of the previous award year but prior to the beginning of the
current award year (July 1). For example, a school is authorized to
carry back any portion of its funds allocated for the 1997-98 award
year to pay FWS wages for summer employment between May 15,
1997 and June 30, 1997 (including both those dates).

[[10% carry back/carry forward funds to award year]]
A school may carry back funds for reasons other than to pay summer
wages. A school is also allowed to use up to 10% of the next year's
FWS initial and supplemental allocation at any time during the
current award year. "Carrying forward" is also permitted. A school
may carry forward up to 10% of its FWS initial and supplemental
allocation for the current award year to the next award year.

[[The graphic on page 7-17 is currently unavailable for viewing. Please
reference your paper document for additional information.]]

If the school carries forward funds from the current award year to the
following award year, the expenditures are charged to the allocation
for the current award year. If the school carries back funds from the
next year to the current year, the expenditures are charged to the next
award year.

Paying students from the correct award year is important; schools
have been held liable when students were paid from the wrong FWS
authorization. For audit and program review purposes, the school
must have canceled checks in its files to show that students received
payment in the amount charged to the FWS Program.

The school may use any type of payroll period it chooses, provided
students are paid at least monthly. It is a good idea to have the FWS
payroll correspond to other, similar payrolls at the school.

PAYROLL RECORDS

New recordkeeping requirements for all Student Financial Assistance
(SFA) programs were published in the Federal Register (Part IX)
November 27, 1996, revising 34CFR 668.24 of the Student
Assistance General Provisions, and amending 34CFR 675.19 of the
FWS regulations. These new requirements become effective July 1,
1997. Schools must follow the new recordkeeping requirements in
34 CFR 668.24 (discussed in Chapter 3, Section 7) and those in 34
CFR 675.19 (discussed below).

[[Separate FWS payroll]]
For reporting and control purposes, FWS expenditures must be
distinguishable from other institutional expenditures. FWS
compensation should either be entered on a separate voucher or, if
listed on the general payroll voucher, should be grouped separately
from other expenditures. If payrolls are handled on automatic data
processing equipment, a special code for FWS payments should be
used.

[[Payment records--34 CFR 675.19]]
A school must establish and maintain program and fiscal records that
are reconciled at least monthly. The records must include

- a certification that each student has worked and earned the amount
being paid; the certification must be signed by the student's
supervisor--an official of the school or off-campus agency; if the
students are paid on an hourly basis, the certification must include
or be supported by a time record showing the hours each student
worked in clock time sequence, or the total hours worked per day;

- a payroll voucher containing sufficient information to support all
payroll disbursements;

- a noncash contribution record to document any payment of the
school's share of the student's earnings in the form of services and
equipment.

[[Voucher contents]]
Payroll vouchers must support all payroll disbursements and should
provide space for the following information:

- the school's name and address;

- the starting and ending dates of the payroll period;

- the student's name;

- an identification of the student's job;

- the number of hours worked during the pay period;

- the hourly rate of pay for an undergraduate student;

- the hourly rate of pay or salary for a graduate student;

- the student's gross earnings;

- any compensation withheld for federal, state, county, or city taxes,
and other deductions;

- any noncash payments;

- the student's net earnings;

- a check number, duplicate receipt, or other payment identification;
and

- any overtime earnings (a student may be paid overtime with FWS
funds).

New recordkeeping requirements for all SFA programs were
published in the Federal Register November 27, 1996 and become
effective July 1, 1997. These regulations specify the length of time
records must be kept and the formats in which they must be kept.
These new requirements as they apply in general to all SFA
programs are discussed in Chapter 3, Section 7. For information on
how these requirements apply specifically to the campus-based
programs, see Chapter 5, Section 3.


*1* For example, the school may pay the student with a draft or
purchase order or electronic transfer to the student's bank account.

Last Modified: 07/09/1998