Salary cap increases for federal awards

Salary cap increases for federal awards

For 14 consecutive years, Congress has legislatively mandated a provision for the limitation of salary. For FY 2003,the Consolidated Appropriations Resolution 2003, PL 108-7, restricts the amount of direct salary of an individual under an NIH grant, cooperative agreement or applicable contract to Executive Level I of the Federal Executive Pay scale. The Executive Level I annual salary rate was $166,700 for the period January 1 through December 31, 2002. Effective January 1, 2003, the Executive Level I salary level increased to $171,900.

For the purposes of the salary limitation, the terms "direct salary," "salary," and "institutional base salary" have the same meaning and are exclusive of fringe benefits and facilities and administrative (F&A) expenses, also referred to as indirect costs. An individual's institutional base salary is the annual compensation that the applicant organization pays for an individual's appointment, whether that individual's time is spent on research, teaching, patient care, or other activities. Base salary excludes any income that an individual may be permitted to earn outside of the duties to the applicant organization.

NIH grant/contract awards for applications/proposals that request direct salaries of individuals in excess of the applicable RATE per year will be adjusted in accordance with the legislative salary limitation. The notice published in the NIH Guide on March 16 contains a various examples and scenarios of how and when to apply the salary cap and a list of Frequently Asked Questions. To read the notice, go to grants.nih.gov/grants/guide/notice-files/NOT-OD-03-034.

Source: The NIH Guide, Week Ending March 18, 2003