Damage Payments Guide 

The information provided in this guide is intended to assist a Payroll Coordinator in processing damage payments made to an employee who begins work prior to signing the UC State Oath of Allegiance, Patent Policy, and Patent Acknowledgement form. Please contact the Payroll Help line at 459-2488 with questions or locate your representative directly.

  1. Before you begin
  2. Payment criteria
  3. Requesting a payment
  4. Authorization and approvals
  5. Common oversights
  6. Policy references
  7. Where to get help
  8. Account codes 
Forms
Quick links to forms referenced in this guide are provided below.
 
Important Form Information:

 Payment Setup Forms
Payee_Setup_204.pdfPayee_Setup_204
Payee_Setup_204.xlsPayee_Setup_204
Payee_Setup_Instructions.pdfPayee_Setup_Instructions
Vendor_Electronic_Funds_Authorization.pdfVendor_Electronic_Funds_Authorization
Vendor_Electronic_Funds_Authorization.xlsVendor_Electronic_Funds_Authorization

 Damage Payment Forms
Damage_Payment_Release.pdfDamage_Payment_Release
Damage_Payment_Report.pdfDamage_Payment_Report
UC State Oath of Allegiance, Patent Policy, and Patent Acknowledgement
IRS_Form_W-7
What to KnowFilter
Before you begin

Important information to know.

  • Special conditions. The following conditions apply to this type of payment. 
    • A damage payment is made to an employee who begins work prior to signing the UC State Oath of Allegiance, Patent Policy, and Patent Acknowledgement Form.
    • A compensation (payroll) payment cannot be made to the employee in this situation; instead, the employee receives a damage payment.
    • A damage payment constitutes settlement of a claim by the employee based on University negligence and is not compensation for services rendered.
    • No sick leave, vacation, or other benefits are accrued prior to signing the UC State Oath of Allegiance Form.
    • Damage payments cannot be made to a non-US citizen.
  • Tax information.
    • Payments may only be made to recipients with a Social Security Number or an Individual Taxpayer Identification Number (ITIN).

      (Use IRS Form W-7 Application for IRS Individual Taxpayer Identification Number to apply for an ITIN number.)
    • No income tax withholdings are deducted from a damage payment, but the payment will be reported on IRS Form 1099 as taxable income to the employee.
  • If this is the first time the employee will be receiving a UCSC non-payroll payment, complete a Payee Setup Form_204.
Payment criteria

The employee must meet all of the following conditions to receive a damage payment:

Requesting a damage payment

Follow these steps to request a damage payment be made to an employee.

  1. Update employee hire information in the Payroll Personnel System (PPS), including hire date, appointment/distribution data and other information, to ensure the PPS data is consistent with data provided with the damage payment request.

    (Refer to the UC State Oath of Allegiance, Patent Policy, and Patent Acknowledgement Form and UC Loyalty Oath - Damage Payment Release Form)


  2. Complete a UC Damage Payment Report of Services Performed before Signing Loyalty Oath Form and obtain department head approval.


  3. If this is the first time the recipient will be receiving a UCSC non-payroll payment, complete a Payee Setup Request_204.


  4. Complete a UCSC Direct Payment Form (Excel | PDF) and obtain approval from an authorized expense approver.

Note: Payments being made for 120 or more days of service must be approved by the Chancellor or his or her authorized designee.

  • Submit the completed UCSC Direct Payment Form (Excel | PDF) with a copy of the UC Loyalty Oath - Damage Payment Release Form, and UC Damage Payment Report of Services Performed before Signing Loyalty Oath Form to the divisional or departmental business office for review and “second-tier” approval.
  • The divisional or departmental business office will submit all forms and supporting documentation together as indicated below to the following offices:
    • Payroll Office: (submit forms together)
      • Original UC State Oath of Allegiance, Patent Policy, and Patent Acknowledgement Form
      • Original UC Loyalty Oath - Damage Payment Release Form 
      • Original UC Damage Payment Report of Services Performed before Signing Loyalty Oath Form
      • Copy UCSC Direct Payment Form 
    • Financial Administrative Services and Transactions (FAST) Office: (submit forms together)
      • Original UCSC Direct Payment Form 
      • Copy UC Loyalty Oath - Damage Payment Release Form
      • Copy UC Damage Payment Report Of Services Performed before Signing Loyalty Oath Form

    Authorization and approvals

    This process requires the following reviews and approvals:

    • The UC State Oath of Allegiance, Patent Policy, and Patent Acknowledgement Form is signed by the employee in the presence of a designated departmental employee, who signs the form as “Witness.”
    • The UC Loyalty Oath – Damage Payment Release Form is signed by the employee in the presence of a designated departmental employee, who signs the form as “Witness.”
    • The UC Damage Payment Report Of Services Performed before signing the Loyalty Oath Form is reviewed and approved by a designated departmental employee.
    • The UCSC Direct Payment Form is approved by an employee with the appropriate authority delegated through the UCSC Manual Signature Authorization and Approval Form.

    An employee may not approve his or her own reimbursement or payment request.

    Common oversights

    Speed up getting a damage payment processed by avoiding these common oversights.

    Where to get help

    Assistance is available for the following topics:

     Account Codes
    DescriptionFilter
    009435
    Restricted use - Damage payments are charged to the same fund source  used for the appointee's salary.