The National Institutes of Health (NIH), the Substance Abuse and Mental Health Services Administration (SAMHSA), and the Agency for Healthcare Research and Quality (AHRQ) restrict the amount of direct salary an individual can earn from a NIH, SAMHSA, or AHRQ grant or contract. These "caps" are linked to Executive Level I salaries of the federal executive pay scale and are adjusted whenever federal salaries are increased. This usually happens on January 1 of each year.
The restriction on salary simply limits the amount that can be awarded and charged to NIH, SAMHSA and AHRQ grants and contracts. An individual's actual institutional base salary may exceed the salary cap established by NIH, SAMHSA, and AHRQ. Individuals with salaries over the cap must provide cost sharing from non-federal funds for that portion of their salary over the salary cap.
It is important to note that, while the faculty member's institutional base salary may exceed the cap, the cap serves as the salary base for determining what he/she may be paid on the NIH, AHRQ or SAMHSA award. That is, the amount of the faculty member's salary requested to be awarded (and ultimately charged) is based on the percentage of effort to be devoted to the grant times the salary cap.
The full uncapped institutional base salary (IBS) should be included in the "Institutional Base Salary" section of proposals. The IBS includes the following components:
Dr. Einstein has a 100% appointment and is committing 10% effort on this project.
Departments should ensure that adequate non-sponsored funding is available to cover any cost sharing when a faculty's institutional base salary is over the salary cap.
Salary cap cost sharing should not be placed on the GC1 Addendum. Variations in salary and annual changes in the cap affect the amount of cost sharing required. As a result, "after the fact" calculations are required to determine the correct cost share percentage. These are provided on addenda attached to the quarterly or semi-annual FEC's.
A preprinted salary cap addendum will be sent with the quarterly or semi-annual Faculty Effort Certification reports to each faculty member having NIH, SAMHSA, or AHRQ salary cap cost sharing. The addendum will provide departments with the appropriate cap and the minimum amount of cost sharing necessary for compliance with salary cap requirements. The department should confirm that there are no changes to the salary (e.g. salary transfers) and transfer the budget number(s) and percent cost share(s) to the cost share section of the FEC.
Note: Salary cap cost sharing on the addendum uses salary pro-rated for the semi-annual cycle. This cost sharing, therefore, does not need to be pro-rated by quarter as is done for mandatory and committed cost sharing.
Departments should carefully review budgets listed on the salary cap addendum to ensure no retroactive salary transfers have occurred. If there are retroactive salary transfers, budgets printed on the addenda should be adjusted using the formula provided on the form, and the corrected percentages should be transferred to the first page of the FEC.
If an RST transfers salary into a NIH, AHRQ or SAMHSA budget that did not print on the original FEC, the department should download and complete a blank salary cap addendum. http://www.washington.edu/research/maa/fec/graphics/isalarycap.pdf
Recent notices from NIH have clarified how the salary cap should be determined and applied when a faculty member's salary exceeds the cap. The appropriate cap is the one in effect during the time the salary is incurred. This means that the salary cap in effect at the time of expenditure may be different than the salary cap in effect when the grant was first proposed or awarded. As a result, it is important to monitor changes in the salary cap levels.
For departments reporting on a quarterly basis, when a salary cap changes during the quarter, the cap in effect for the majority of that quarter's pay periods will be used. For example, the salary cap is typically updated on January 1. Therefore, effort reports for winter quarter 2005 would use the cap effective on January 1, 2005, since 5 of the 6 pay periods during that quarter fall under the 2005 cap.
For faculty reporting on a semi-annual cycle, the cap should be the same during the entire reporting period.
The current NIH salary limitation notice can be found at:
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-09-069.html
A summary of prior caps can be found at:
http://grants.nih.gov/grants/policy/salcap_summary.htm
