1. DHHS SALARY CAP (US DEPARTMENT OF HEALTH AND HUMAN SERVICES). THE FOLLOWING IS PROVIDED AS A BRIEF SUMMARY OF THE HHS SALARY CAP REQUIREMENTS. UPDATED AUGUST 2015 EAST CAROLINA UNIVERSITY OFFICE OF GRANTS AND CONTRACTS grantsc@ecu.edu

2. HHS SALARY CAP DHHS IMPOSES A MAXIMUM SALARY CAP (ANNUAL SALARY RATE THAT CAN BE PAID) FOR ALL OF THEIR AWARDS. THE SALARY CAP RATE CHANGES PERIODICALLY. THE RATE THAT IS IN EFFECT AS OF THE TIME OF AN AWARD, AND SALARY BEING CHARGED, IS THE RATE THAT MUST BE USED. PRIOR TO 12/11 THE SALARY CAP ONLY APPLIED TO NIH, AHRQ AND SAMHSA. THE SALARY CAP NOW APPLIES TO ALL HHS AGENCIES. – NIH, AHRQ, SAMHSA, CDC, HRSA, ACF, ACYF, AOA, ATS-DR, CMMS, FDA AND IHS SOME NON-PROFITS, SUCH AS AMERICAN HEART ASSOCIATION, HAVE ALSO ADOPTED THE HHS SALARY CAP RATE. grantsc@ecu.edu

3. EFFECTIVE DATES THE SALARY CAP IS BASED ON THE FEDERAL EXECUTIVE LEVEL II SALARY RATE. FOR AWARDS ISSUED 10/1/14 THROUGH 1/10/2015, THE SALARY CAP IS $181,500/YEAR (FOR 12 MONTH, 1.0 FTE). FOR AWARDS ISSUED 1/11/15 THROUGH SEPTEMBER 30, 2015, THE SALARY CAP IS $183,300/YEAR (FOR 12 MONTH, 1.0 FTE). THE RATE MAY CHANGE AGAIN, WHEN THE 15-16 FEDERAL BUDGET IS PASSED, OR IT MAY STAY THE SAME FOR A NUMBER OF YEARS. CHANGES TO THE SALARY CAP ARE USUALLY ANNOUNCED IN JANUARY/FEBRUARY BUT MAY BE RETROACTIVELY APPLIED. OGC WILL NOTIFY THE CAMPUS WHEN THERE IS A CAP RATE CHANGE. grantsc@ecu.edu

4. SALARY RATES BECAUSE OF STAGGERED IMPLEMENTATION/AWARD DATES, AN INDIVIDUAL COULD HAVE MORE THAN ONE CAP IF PAID FROM MULTIPLE HHS AWARDS OR A COMBINATION OF HHS AND OTHER SPONSOR CAP AWARDS. THE SALARY CAP IS A RATE OF PAY – NOT JUST A CUMULATIVE AMOUNT PAID OR CHARGED TO AN AWARD. $183,300/YEAR MAX $15,275/MONTH MAX $7,637/PAY PERIOD MAX EFFORT COMMITMENTS REMAIN THE SAME. IT IS ONLY THE RATE OF PAY THAT MAY CHANGE. THE CAP RESULTS IN MANDATORY COST SHARE FOR ANYONE WITH A UNIVERSITY SALARY HIGHER THAN THE CAP. grantsc@ecu.edu

5. EPAFs AND COST SHARE OGC WILL NOT APPROVE EPAFS THAT EXCEED THE APPROPRIATE HHS CAP LIMITATIONS FOR HHS OR OTHER CAP AWARDS. ADMINISTRATORS SHOULD REVIEW FOR THE SALARY CAP RESTRICTIONS WITH EACH NEW AWARD AND EFFORT REPORTING CYCLE. ANYONE REPORTING EFFORT ON A CAP AWARD, WITH A UNIVERSITY SALARY GREATER THAN $183,300, WILL HAVE A MANDATORY COST SHARE REQUIREMENT FOR EACH EFFORT PERIOD. EXAMPLE: $200,000 UNIVERSITY 12-MONTH SALARY, WITH 15% MINIMUM EFFORT COMMITMENT AND MAX/CAP PAY IS $183,300/YR. 15% = $27,495 MAX PAY RATE, BUT $27,495 = 14% UNIVERSITY SALARY, THEREFORE EPAF SHOULD BE FOR 14% $$ EQUIVALENT AND 1% WILL BE REQUIRED COST SHARE TO MEET THE EFFORT COMMITMENT. grantsc@ecu.edu

6. COST SHARE continued EXAMPLE: $200,000 UNIVERSITY 12-MONTH SALARY, AND MAX PAY IS $183,300/YR WITH 15% EFFORT COMMITMENT = $1,145/PAY PERIOD. EPAF PROCESSED AT UNIVERSITY RATE $200,000, IS $8,333/PAY PERIOD, 15% = $1,250/PAY PERIOD. AT EFFORT REPORTING TIME WITH 5 PAY PERIODS, TOTAL PAY SHOWING IS $41,666. ERS GRANT PAY IS SHOWING AS 15% OF SALARY AT $6,250. BUT MAX ALLOWABLE IS $5,725 ($1,145 X 5 PP). IN ERS YOU WILL NEED TO COST TRANSFER OFF $525 FOR A NEW TOTAL PAID OF $5,725.

7. grantsc@ecu.edu COST SHARE continued THIS WILL EQUATE TO 14% OF SALARY FOR THE EFFORT PERIOD. A 1% COST SHARE WILL NEED TO BE DOCUMENTED IN ERS TO MEET THE 15% EFFORT COMMITMENT. IF CORRECTING HR REDISTRIBUTIONS ARE PROCESSED BEFORE THE EFFORT PERIOD CLOSES ONLY COST SHARE WILL NEED TO BE PROCESSED IN ERS. DEPARTMENTS NEED TO REVIEW CALCULATIONS EACH ERS PERIOD AS THERE ARE DIFFERENT NUMBERS OF PAY PERIODS IN THE EFFORT REPORTING CYCLES. FOR INDIVIDUALS WITH MULTIPLE HHS CAPS, DEPARTMENTS WILL NEED TO MONITOR FOR DROP OFF DATES FOR THE “OLD” CAP AND START OF THE “NEW” CAP FOR INDIVIDUAL AWARDS.

8. 9-MONTH SUMMER SALARY SUMMER SALARY FOR 9-MONTH FACULTY WILL ALSO NEED TO FOLLOW SALARY CAP REQUIREMENTS (IN ADDITION TO THE 133% RULE). MAX PER PAY PERIOD WILL BE $7,637. THE SUMMER EPAF MAY NEED TO BE LESS THAN THE NORMALLY CALCULATED 100% ACTUAL SALARY PER PAY PERIOD. EXAMPLE: $145,000 FOR 9-MONTH, 133% = APPX $8,056/PP = 100% IN SUMMER MONTH. ALLOWABLE MAX = $7,637/PP = APPX 93% OF UNIVERSITY SALARY RATE CALCULATION. grantsc@ecu.edu

9. 9- MONTH continued FACULTY NORMALLY CANNOT COST SHARE IN THE SUMMER BECAUSE THERE IS NO COST SHARE SOURCE. – CANNOT COST SHARE FROM SUMMER SESSION TEACHING. SO THE SUMMER EPAF RATE MAY NEED TO BE LESS THAN THE NORMALLY CALCULATED 133% SALARY RATE. THE CAP COULD ALSO POTENTIALLY AFFECT SEMESTER BUYOUT CALCULATIONS FOR INDIVIDUALS WITH ANNUALIZED SALARIES GREATER THAN $183,300. grantsc@ecu.edu

10. CAP/EPAF CALCULATOR ON THE OGC WEBSITE THERE IS A SALARY CAP CALCULATOR WHICH – PROVIDES COMPUTATION ASSISTANCE TO PROCESS AN EPAF IN COMPLIANCE WITH THE CAP REQUIREMENTS AND – CALCULATES COST SHARE NEEDED WHEN COMPLETING EFFORT REPORTING. GO TO – http://www.ecu.edu/cs-acad/grants/gc_forms.cfm http://www.ecu.edu/cs-acad/grants/gc_forms.cfm – SELECT “SALARY AND SALARY CAP CALCULATORS grantsc@ecu.edu

11. CAP/EPAF CALCULATOR ON THE OGC WEBSITE THERE IS A SALARY CAP CALCULATOR WHICH – PROVIDES COMPUTATION ASSISTANCE TO PROCESS AN EPAF IN COMPLIANCE WITH THE CAP REQUIREMENTS AND – CALCULATES COST SHARE NEEDED WHEN COMPLETING EFFORT REPORTING. GO TO – http://www.ecu.edu/cs-acad/grants/gc_forms.cfm http://www.ecu.edu/cs-acad/grants/gc_forms.cfm – SELECT “SALARY AND SALARY CAP CALCULATORS 11

12. QUESTIONS? FOR ADDITIONAL INFORMATION, CONTACT YOUR OGC REPRESENTATIVE OR WRITE ershelpdesk@ecu.eduershelpdesk@ecu.edu or grantsc@ecu.edu