Determining appropriate compensation is often one of the most challenging and most impactful components of a new organization, project, or board; and while these guidelines apply to everyone in every role, they are particularly difficult when trying to involve people with lived experience.

Practices regarding compensation for people with lived experience vary widely: some communities classify people as employees and issue W-2 forms, while others engage them as consultants with established rates, or provide stipends for advisory roles. It is important to note, however, that many lived experience members do not meet the legal definition of independent contractors, making it critical to consider appropriate and legally compliant worker classifications for all positions.

The flowchart below was created to provide some initial guidance, but each hiring agency must determine what approach best aligns with their goals, local context, and legal requirements. Consulting legal counsel and reviewing local, state, and federal regulations is strongly encouraged, because even the most well-intentioned compensation practices can expose people to financial or legal risk if not structured appropriately.

Numerous additional resources are available to support in making informed decisions about compensation, including guidance from the Internal Revenue Service (IRS), the U.S. Department of Labor, and state labor agencies. (see some links below)