EGRP News Flash - February 3, 2012

New NIH Salary Limitations Set on Grants, Cooperative Agreements, and Contracts

The National Institutes of Health (NIH) released new information in the NIH Guide for Grants and Contracts on January 20, 2012, regarding the salary limitation for NIH grant and cooperative agreement awards and extramural research and development contract awards (NOT-OD-12-035).

Every year since 1990, Congress has legislatively mandated a provision limiting the direct salary that an individual may receive under an NIH grant. For Fiscal Year (FY) 2012, the Consolidated Appropriations Act, 2012 (Public Law 112-74) signed into law on December 23, 2011, restricts the amount of direct salary to Executive Level II of the Federal Executive Pay scale. The Executive Level II salary is $179,700. Because this reduction was included in the law signed December 23, 2011, implementation of the lower level is effective with FY 2012 awards where the initial Issue Date of the award is on/after December 23, 2011.

Please see the salary cap summaryExternal Web Site Policy and the time frames associated with salary caps.

Implementation of salary limitations are as follows:

  • NIH competing grant awards with categorical budgets reflecting salary levels at or above the new cap(s) issued on/after December 23, 2011, will reflect adjustments to the current and all future years so that no funds are awarded or committed for salaries over the limitation.
  • For non-competing grants with an initial Issue Date on/after December 23, 2011, the applicable salary limitation is Executive Level II. Grantees may rebudget any funds freed as a result of the lower cap.
  • An individual's base salary, per se, is NOT constrained by the legislative provision for a limitation of salary. The rate limitation simply limits the amount that may be awarded and charged to NIH grants and contracts. An institution may pay an individual's salary amount in excess of the salary cap with non-federal funds.
  • The salary limitation does NOT apply to payments made to consultants under an NIH grant or contract although, as with all costs, those payments must meet the test of reasonableness and be consistent with institutional policy.
  • The salary limitation provision DOES apply to subawards/subcontracts for substantive work under an NIH grant or contract.

Competing grant applications and contract proposals that include a categorical breakdown in the budget figures/business proposal should continue to reflect the actual institutional base salary of all individuals for whom reimbursement is requested. In lieu of actual base salary, however, applicants/offerors may elect to provide an explanation indicating that actual institutional base salary exceeds the current salary limitation. When this information is provided, NIH staff will make necessary adjustments to requested salaries prior to award. Examples are provided in the NIH Guide Notice.

Access the NIH Guide for Grants and Contracts notice:

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