Mechanics for Compensation
Per 2SSB 5793, there is a ceiling (limit) of $200 per day on stipends, but no limit on the total number or value of reimbursements that can be issued to a workgroup member over multiple days. Similarly, there is no cap on the amount that a work group member may receive in stipends, however members and agencies should be aware that after $600 is earned by a workgroup member from one agency in a calendar year, that income must be reported to the IRS using a1099-MISC form.
Eligible candidates for compensation or reimbursement must either have lived experience or qualify as low-income, provided that the individuals are not otherwise compensated for their attendance at meetings. "Lived experience,” “low income,” and “otherwise compensated” are defined in the Definitions section. When offering compensation to someone who does not have lived experience and is seeking compensation based on low-income status, verify income. Examples of verification methods are:
- Categorical eligibility for community members currently receiving public assistance in Washington state
- Pay Stubs from the last one to three months
- Previous year’s tax return
- Employer statement
The above are currently used examples only. The list is not meant to be exhaustive or mandatory. Agencies should determine which forms of income verification they will use when determining payment eligibility for work group members who are not participating based on their lived perspective, which then requires those members to meet the income requirements of 2SSB 5793.
The University of Washington (UW) publishes The Self-Sufficiency Standard every three years as a measure of income adequacy for different households across Washington State. Some state agencies currently use UW’s Self-Sufficiency Calculator to better understand how they can support clients. In the Self-Sufficiency Standard report for Washington State 2020, UW determined the cost of living for one adult, one preschooler, and one school-age child (family of 3) in the most expensive county, King County-East to be $92,661 (Table 3 pg. 22) or about $45 per hour. Thus, the below compensation schedule is set at $45 per hour. (Note: a living wage may be higher than federal or local minimum wage standards).
- Up to and including one hour
- More than one hour and equal to two hours
- More than two hours and equal to three hours
- More than three hours and equal to four hours
- Anything over four hours
Note: If a workgroup member receives $600 or more in a calendar year, the Internal Revenue Service (IRS) requires a 1099-MISC form to be sent. See legal considerations section for more information.
People who are low-income, experiencing homelessness, with limited English language proficiency, or those with disabilities may qualify for free tax-filing support through the IRS’s Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs. You can find more information about this free support here: https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers.
One-Time Engagement Activities
Agencies may create temporary ad hoc workgroups to provide compensation for participation in one-time, low-barrier engagement opportunities such as surveys, interviews, written feedback requests, or other types of engagement that do not require a long-term commitment and/or are low-intensity efforts. Compensation in one-time events offers an incentive for participation and demonstrates value of community members time and expertise.
Gift cards are the payment form typically used for one-time events, though they are not the required payment form for these events. See the pre-loaded gift card section for more information on gift cards.
The recommendation for compensation for one-time events is a flat rate:
- One-time events that are up to and including one hour
- One-time events and activities that are up to four hours or less
- One-time events and activities that are over four hours
Statewide Vendor Numbers
A statewide vendor number is required whenever payments are made through the Agency Financial Reporting System (AFRS). AFRS is Washington State’s central hub for accounting information. Requesting a statewide vendor number only needs to be done once, when seeking payment for the first time, however statewide vendor numbers can expire so workgroup members with previously existing statewide vendors numbers should check to make sure their number is still active.
Confirm that a vendor number does not already exist by searching the Vendor Number Lookup. If no vendor number exists, obtain a vendor number, by visiting Statewide Vendor/Payee Services | Office of Financial Management (wa.gov). Complete the “Vendor/Payee Registration Form.” For number 3 on the Vendor Registration Form, select the option Lived Experience - Class 1.
Workgroup members have the option of setting up direct deposit to a bank account or receiving a check via mail. Once the form is submitted, the members’ Statewide Vendor number will be sent to the email provided within 3-5 business days.
There are several options to disburse payments to individuals, all of which have different considerations:
- State warrant (check)
- Direct deposit (ACH)
- Prepaid card
- Payment through a local bank account (Imprest account)
- Gift Card
Each method requires the disbursing agency have some infrastructure in place to issue and account for the payment. Depending on the payment option chosen and the method of issuance the agency may incur hard and/or soft dollar costs. When possible, offer multiple payment options and give members the choice to choose the method that works best for them.
Agencies should use care when their funding source prohibits showing any preference for one vendor over another.
State Warrant (Check)
State warrants, or checks, can be issued through the Agency Financial Reporting System’s (AFRS) Statewide Vendor system (SWV) or through a direct relationship with the Office of the State Treasurer (OST). Warrants must be cashed by the recipient within 180 days of issuance. Warrants older than 180 days are no longer valid. Aged warrants may be reissued, or payment can be made using another vehicle.
Recipients of warrants issued through SWV must establish a statewide vendor number. Note: when the payee signs up for a SWV they choose either warrant or Automated Clearing House (ACH) as their method of payment. Agencies that use the A19 Agency may incur minimal fees from AFRS for payment processing.
To issue warrants directly through OST the agency must generate a warrant issue file to communicate the payee information to OST. Implementation of a new warrant issue file takes 3-6 months. Consideration should be given to delivery of the warrant to the payee, by mail or in person.
OST’s warrant cashing services have not been reinstated after closing due to Covid. OST has an agreement with US Bank to cash state warrants for individuals at US Bank branches in Washington State. Other companies such as Fred Meyer, Walmart, and others offer check-cashing services for a fee. Recipients must present valid identification at the branch when cashing the warrant.
- US Bank does not have a branch in all regions of the state, so workgroup members who do not have their own bank account to cash checks and also do not live near a US Bank may find it difficult to cash their checks
- Intervention by OST and the state’s relationship team is often needed to facilitate the warrant cashing process at US Bank
- US Bank may charge the payee a $10.00 fee per warrant cashed
- 3-6 month lag time to set up new warrant issue file is burdensome
- Loss of paper checks is a risk
Direct Deposit (ACH)
ACH can be issued through SWV or through a direct relationship with OST. Recipients of ACH must have a domestic bank account and be willing to share their account details with the state to receive funds. In most cases, the requirement under RCW 43.41.180 to complete an Economic Feasibility Study (EFS) is waived by OFM when disbursing payment by ACH.
Recipients of ACH issued through SWV must establish a statewide vendor number. Note: when the payee signs up for a SWV they choose either warrant or ACH as their method of payment. Agency may incur fees from AFRS for payment processing.
To issue ACH directly through OST the agency must generate an ACH issue file to communicate the payee information to OST. In turn, the agency will receive a file of ACH Returns and Corrections detailing payments that didn’t work (Returns) or require updates to the bank information (Corrections). The disbursing agency is responsible for ensuring their program complies with all ACH Rules. Implementation of a new ACH issue file takes 3-6 months. OST does not charge a fee to the agency to disburse payment by ACH.
- Collecting and storing recipient bank accounts
- ACH Rules Compliance can be complicated and resource intensive
Disbursing payment by prepaid card is a good option for unbanked and under-banked populations. US Bank’s prepaid cards are Visa branded and are accepted anywhere that accepts Visa. Recipients have several options to use the card and/or get cash free of charge, including to the penny withdrawals at most banks. Recipients receive the same fraud protections against unauthorized withdrawals to prepaid cards as traditional bank accounts (Federal Regulation E).
Federal regulations may require certain disclosures be provided prior to the recipient choosing payment by prepaid card. The bank will review the program specifics to determine if disclosures are required. The disbursing agency enrolls the payee through the bank’s online Admin Portal. The bank creates and mails a personalized, embossed card to the recipient. The recipient must activate the card, either online or by calling customer service before funds can be accessed. Funding the cards is done by direct deposit. The Admin Portal allows the agency to confirm deposits were credited to the card but does not allow them to see any other transactions or activity.
Implementation of a new prepaid card program takes 3-6 months for OST to process. An Economic Feasibility Study (EFS) must be completed and submitted to OFM. Agencies are responsible for card issuance fees.
- Recipients need a physical mailing address to receive the card, bank does not mail cards to P.O. Boxes
- 7-10 business days for recipient to receive card in the mail
Purchase and Distribute Preloaded Gift-cards
Preloaded gift cards that effectively operate like a debit card can be obtained from traditional vendors, such as in-store kiosks. Many preloaded digital gift cards can also be purchased online. These are not to be confused with gift cards that can only be redeemed at a specific store (such as a Starbucks gift card) - cards that are only redeemable at one specific business should not be used as a method of compensation for workgroup members.
The State Administrative & Accounting Manual (SAAM) currently requires agencies to use gift cards with no fees associated. If there are fees attached, an EFS would be required. Ability to get cash, including to the penny withdrawals, are governed the rules of the card purchased. Agencies have several options to purchase preloaded gift cards, such as petty cash or purchase cards, and distribute them to recipients.
Agencies should have internal controls in-place for undistributed cards.
- Cards are like cash and there is risk involved in mailing cards to private residences; it is therefore recommended to email electronic gift cards OR use certified mail if sending physical gift card through USPS OR utilize Amazon gift cards that can be sent to secure lockers for retrieval
- Potential lack of customer support from issuer if recipient experiences problems
Agency bank account outside the treasury (Imprest Account)
Agency may open an account outside the treasury with approval from OFM. Agency would fund and replenish the account without using a SWV. Agency would be responsible for all fees associated with account and products purchased.
Account would facilitate:
- Issuing checks directly from the account
- Utilizing US Bank’s Automated Clearing House (ACH) Origination product to issue direct deposit without creating and transmitting a file
- Funding prepaid cards directly through the Admin Portal (requires EFS and OFM approval)
- Access to new same-day payment products such as Real-time payments, Zelle or Venmo
As not specifically authorized by 2SSB 5793, an agency may want to consult with the Department of Enterprise Services (DES), OFM, and their assigned AAG when contracting with a third-party administrator for the first time.
Agencies may opt to contract with community organizations or private companies to connect with and compensate community. As there is currently no statewide contract for this, agencies would follow the Request for Proposal (RFP) to select an organization.
- Some of the funds for community compensation will be used to pay for the organization’s payment administration.
- Contracting with a community organization or private company exclusively for this purpose (i.e. not a part of a broader contract) may not be a comfortable or appropriate role for an organization that does not exist solely for this purpose
Non-Exclusive Third-Party Administrators
Agencies may include the responsibility – and appropriate budgeting – for payments administration as part of a larger scope of work under contract with non-profit community organizations or private businesses. Examples include organizations or businesses contracted for the facilitation of workgroups, conducting community engagement, providing technical assistance, and other scopes of work.
- Community-based organizations and private businesses may experience financial burdens due to lack of up-front payments or delay in payments may cause strain.
- Online platforms that automate these payments for a large volume of smaller payments often require cost projection and calculation that put an extra logistical challenge on the organization.
Mechanics for Reimbursement
Child and Adult Care
Community members can either submit the bill or invoice received from the provider for child or adult care services or confirmation of payment. Be as flexible as possible with what constitutes a bill or invoice or confirmation of payment (e.g. traditional receipt, screenshot of money transfer through apps like CashApp and Venmo) to make it as easy as possible for community members to receive reimbursement. Agencies, boards and commissions interested in providing onsite childcare for meetings should seek guidance from their AAGs to ensure that state-purchased or state-coordinated childcare adheres to the appropriate health and safety standards for the children in care.
- Childcare: up to $25 per hour for the first child and up to $50 per 24-hour cycle for each additional child
- Adult care: up to $34 per hour for the first adult and up to $50 per 24-hour cycle for each additional adult
Lodging, Meals and Mileage per diem rates
Reimbursements can be made for lodging, meals, and mileage costs in addition to the compensation offered in accordance with RCW 43.03.050 and RCW 43.03.060. When overnight stays are required, agencies should try to book and pay for the hotel rooms on behalf of workgroup members to lessen the financial burden.
Per diem rates are updated in annually in October. The most current rates are available on Office of Financial Management’s website. These rates are updated in accordance with the US General Services Administration.
It is important for agencies to pay workgroup members as efficiently and quickly as is reasonably possible for the overseeing agency. Agencies are responsible for having payment mechanisms in place before workgroup activity begins. To avoid creating additional complications or adding to barriers to community member participation, it is recommended that whenever possible agencies should:
- Provide payments at the time of participation or immediately following participation. This minimizes the need for workgroup members to front time, money, or other resources to support their participation.
- When possible, cover costs in advance. See the accessibility section for recommendations that may forestall the need for reimbursements.