Update of the Reduced Salary Cap (HR 2055)

There has been a very important change in the charging of personnel to all Department of Health and Human Services (HHS) awards.  Congress has passed legislation (HR #2055) that reduces the “salary cap” ceiling for personnel charged to projects funded by these agencies.   The legislation reduces the salary cap on extramural grants from Executive Level I ($199,700 in 2011) to Executive Level II ($179,700).  All HHS operating divisions are equally affected by H.R. 2055. Under prior year’s appropriation legislation, only NIH, AHRQ and SAMHSA were affected. The 2012 legislation included all HHS awards.

The NIH has issued detailed guidance regarding the applicability of the reduced salary cap ($179,700).  The new Executive II salary level is applicable to FY2012 NIH funds awarded on or after December 23, 2011.

NIH has finalized guidance with further details:

  1. The new Executive II salary limitation WILL NOT be applicable to FY2012 NIH funds awarded on or between October 1, 2011 and December 22, 2011. However, if these awards continue into FY2013, the new Executive II salary limitation will become applicable.

  2. The new Executive II salary limitation WILL NOT be applicable to NIH funds awarded in prior fiscal years (FY2011, FY2010, etc.) that have been carried over into FY2012.

  3. Adjustments WILL NOT be necessary for awards funded prior to December 23, 2011.

  4. Awards made on or after December 23, 2011 should be charged at the new Executive Level II salary limitation ($179,700).   The Office of Sponsored Programs can assist in identifying any new awards made in this small window where salaries have already been charged.  According to NIH, it is absolutely acceptable to have made these charges in good faith.  However, these charges will need to be retroactively adjusted dating back to December 23, 2011 for those awards that were made on or after December 23, 2011. 

  5. For new proposal applications and corresponding budgets, please use the Executive Level II salary limitation ($179,700) per H.R. 2055.

Updates will be provided as they are available.  Please feel free to contact the Office of Sponsored Programs, or Julie Cole in Research Costing Compliance for further details.

 

NIH Notice Number:  NOT-OD-12-035