The federal Consolidated Appropriations Act limits the rate at which salaries are paid under sponsored research awards funded by certain agencies of the Department of Health and Human Services (HHS). Since the implementation of the cap in 1989, salary limits have been imposed on awards made by the National Institutes of Health (NIH), and the Substance Abuse and Mental Health Services Administration (SAMHSA). Beginning with the FY 2002 Appropriations Act, the cap was applied to the Agency for Healthcare Research and Quality (AHRQ) awards.
The cap is tied to levels of the Federal Executive Pay scale specified within the Consolidated Appropriations Act. Since FY 2001 the cap has been set at the Executive Level I.
The cap establishes a maximum annual rate of pay at which an individual can be compensated for full time committed over a twelve-month period. Salary charges to a sponsored research award from the (HHS) agencies cited above cannot be paid at a monthly rate that exceeds 1/12th of the maximum annual rate of pay then in effect. The capped rate in effect as of December 23, 2011 is $179,700. This means that salary paid on or after December 23, 2011 cannot be paid at a monthly rate that exceeds $14,975.
Compensation received by academic year faculty reflects the fact that nine-month salary is paid out in twelve equal portions. Thus, for FY 2012 awards subject to the maximum rate of pay for full time effort of $179,700 for work performed during the academic year will reflect a maximum 9 month salary of $134,775.
