Payment to Research Participants

Researchers may also choose to incentivize study subjects by utilizing a lottery payment structure, in which subjects’ names are entered in a lottery operated by the study team. If a study’s incentive budget is small, a lottery allows one subject, drawn at random from the pool, to receive the full amount of the incentive amount. Subjects may find the chance to win this somewhat larger amount more attractive than the certainty of receiving a smaller amount.

In most cases, Michigan law requires anyone operating a lottery (also known as raffle) to obtain a raffle license from the state. The law allows an exemption, however, for qualified organizations to operate lotteries without a raffle license.

As a qualified organization, the University of Michigan is authorized to conduct lotteries without a raffle license, as long as the lotteries meet the following criteria for the statutory exception:

1. There may be no presale of tickets.
2. There may be only one prize drawing per day,
3. No more than $100 total in prizes may be awarded in one day (to one winner or multiple winners).
4. There may be no second-chance drawings for those who do not win. (In the context of a research lottery, this means that a researcher who wishes to offer multiple prizes must organize subjects in separate pools, to ensure that each subject has only one chance to win.)

Researchers are responsible for knowing the regulatory requirements for lotteries conducted outside Michigan.

When conducting a research lottery, the University of Michigan study team is responsible for

• operating the lottery
• maintaining the pool (or pools) of potential winners
• drawing the winners
• awarding prizes

The State of Michigan Charitable Gaming Division offers guidance on legal requirements for raffles conducted in Michigan.

In a sweepstakes, all those invited to participate are eligible to win, whether or not they actually participate. A sweepstakes structure allows for a higher-value prize without requiring a raffle license. Participants (and researchers) will be familiar with sweepstakes from cereal boxes and candy wrappers with a "no purchase necessary to win..." prize offer.

Human Subjects Incentive Program (HSIP) tracks incentive payments, according to SPG 501.07. HSIP should be involved in IRB-approved ("non-exempt") studies, as well as Exempt studies and Not Regulated projects, unless a third-party vendor, or another institution is handling the incentives.

Incentive payment for research is taxable income. When an individual receives more than $600 in one calendar year from the University of Michigan (cumulative from one or multiple studies), the University issues an IRS 1099 form. HSIP tracks payment per participant across multiple studies and reaches out to study teams with participants whose aggregate compensation nears $400.

Studies that do not collect personal information for processing cannot issue payment by payment coupons, checks, or mailed gift cards.

Payment is NOT more than $400 per year:

Studies that pay a maximum of $400 or less to a participant in a calendar year should usually collect name and physical address from each participant. Collection of email is optional. If collecting personal information may be burdensome to study team, or may make study participants uncomfortable, explain the plan to collect less information in eResearch question 13.5 (or a free-text question for the Exempt applications).