The National Institutes of Health (NIH) issued guidance on Friday, January 20, related to the new Executive Level II salary limitation (“salary cap”). With passage of H.R. 2055 into law, the NIH salary cap is reduced to $179,700 (Executive Level II) from $199,700 (Executive Level I), effective December 23, 2011.
NOT-OD-12-035: Notice of Salary Limitation on Grants, Cooperative Agreements, and Contracts outlines the following:
· For competing grant awards with an initial Issue Date on or before 12/22/2011: The salary cap remains at $199,700 for the FY2012 award period (no adjustment required). NIH will adjust future years for these awards to reflect a salary cap of $179,700.
· For competing grant awards with an initial Issue Date on or after 12/23/2011: A salary cap of $179,700 applies to current and all future years (adjustment required). NIH will revise the award.
· Non-competing grant awards with an initial Issue Date on or before 12/22/2011: Applicable salary cap is $199,700 (no adjustment required).
· Non-competing grant awards with an initial Issue Date on or after 12/23/2011: Applicable salary cap is $179,700. Unless otherwise restricted, grantees may rebudget any funds freed as a result of the lower cap.
Note that a lower salary cap raises the level of salary cost share required on a project. OSPA is currently reviewing NIH awards and will soon contact Department personnel regarding affected projects requiring adjustments to budgets and cost-shared salary.
Finally, our understanding is that all Health and Human Services (HHS) operating divisions are subject to the new Executive Level II salary limitation, whereas in the past only NIH, AHRQ, and SAMHSA were affected. Guidance from these agencies is not yet released; we are seeking clarification and will relay information as it becomes available.
Feel free to contact me with any questions as they arise.