Summer Salary and Compensation Guidelines

Effective March 24, 2008

 

Office of Sponsored Research and Economic Development (Office of the Provost) and Grants Administration (Finance and Administration)

Summer Salary and Additional Compensation:

Pace University Guidelines for Compensation from Externally Funded

(Sponsored) Projects

 

Introduction

This policy establishes guidelines consistent with current federal and state regulations for allowable compensation that can be paid to faculty and staff from externally funded projects awarded to the University (see references). The following guidelines address sponsored project funding for: 1) Summer Salary, 2) Additional Compensation and 3) Stipends (Stipends to faculty or staff cannot be paid from externally funded projects. A stipend payment from a sponsored project is reserved for students.) and 4) Consulting.

This policy applies to all externally funded programs whose budgets are approved by the Office of Sponsored Research and Economic Development prior to submission.   Full time faculty who charge up to three months of their salary, as budgeted in the grant, should refer to this as “summer salary” not “stipend.” This is consistent with federal agencies and by most foundations. The federal government does not sanction the use of the term stipend for any charges to federal agreements (including federal funds passed through state & local government and/or corporations) except in the very limited case of student traineeships. Therefore Pace University should not refer to payments for summer work performed on grants as a “stipend”. The correct term is summer salary.

The federal government will allow full-time faculty, whose full base pay is for work during the 9 month academic year, to collect up to 3 months summer salary. This is in addition to their base pay, and is calculated at the rate of 1/9th (per month) of academic year salary for up to 3/9ths for 3 months of summer work.  Institutions of higher education are permitted to pro-rate full year fringe benefits against summer salary. This includes pension and medical in addition to statutory benefits such as FICA, NYS Disability and Unemployment Insurance etc.

All grant proposals, including contracts, that we review and forward to the Office of Planning and Budget for approval should have full fringe benefits included.  Not to collect for full fringe benefits normally paid by the funding entity reduces effective funding to Pace University as well as the grant recipient.  Since fringe benefits are the second largest cost budgeted on grants after salaries, this policy is important to observe.   Sponsors may challenge or limit indirect costs but they rarely challenge or deny fringe benefits on grant budgets.  Not to request this will result in the fringe costs being backed out of the grant funds by the university and will negatively impact the available funds.  All grant budgets, including contracts, should have full fringe benefits budgeted at either 32.5% for full-time faculty and staff or 15.9% for part-time staff and students working less than 20 hours per week.
 

1. SUMMER SALARY ON EXTERNALLY FUNDED (SPONSORED) PROJECTS

The following guidelines govern sponsored project funding for Summer Salary from external funds. (Stipends from Pace University funds in excess of a faculty member’s regular academic salary are discussed at the end of this document.) These new guidelines supersede all prior Office of Sponsored Research and Economic Development and/or Finance and Administration policies concerning these issues.

Full-time faculty with nine-month appointments may receive compensation for work on a sponsored project during the summer months (“Summer Salary”), as follows:

  1. Summer salary is allowable subject to the regulations of the funding agency and the University’s policies.
  1. Faculty who receive Summer Salary must expend the effort associated with the Summer Salary during the summer period. Effort expended during the academic year does not satisfy a commitment related to the receipt of Summer Salary.
  1. The maximum amount of Summer Salary permissible is three-ninths of the faculty’s regular academic year salary. In other words, in any year, a faculty member may receive no more than three months of Summer Salary.
  • Summer Salary funded by the National Science Foundation (one of the few exceptions) is limited to two months, or two-ninths of the regular academic year salary.

  • Each month of Summer Salary represents one month of full-time effort.

  1. The rate for Summer Salary is the same as the rate for the regular academic year salary. Because Pace’s academic year begins on September 1, the Summer Salary rate is as follows:
  • June/July/August: 1/9 of current regular academic year salary for each month worked.
  1. In any sponsored project application for Summer Salary, the budget justification must state explicitly that the salary listed in the budget for the faculty in question represents a portion of his or her Summer Salary.
  1. Summer Salary should be requested on the summer salary form and should be signed by the Dean, the Principal Investigator and the Budget Representative.  This form should be accompanied by
    • Effort Certification Form for Summer Salary, available from F&A Website. Effort devoted to the project should be filled in after the fact.  If a faculty member is requesting full summer salary then effort for the period must equal 100%. If questions arise, please contact the Office of the Associate Provost for Sponsored Research and Economic Development or the Grants Manager in Finance and Administration.

Additional Notes:

  1. Full time faculty who are on sabbatical can request up to 50% of their salary from an external funding source for the sabbatical period.  This is a distinct situation from summer salary requests, and faculty should refer to their Dean and the Provost for additional information. 
  1. Who may apply for a grant from external sources?  Full time faculty can be Principal Investigators on a grant.  Part time faculty can be Co-Investigators on a grant proposal.  Full time staff can apply for a grant with permission from their supervisor, and are subject to the same Pace University grant proposal clearance policies as faculty grant applicants.  See below regarding restrictions to additional non-faculty compensation.  

Fringe Benefits for Summer Salary on Sponsored Projects

Fringe benefits are paid and charged on summer salary at the full extent (32.5%) in the same way that they are paid on faculty 9 month salaries. This covers, for example, employer portion of FICA (social security), NYS Disability and Unemployment Insurance, pension and medical. It is important to note that fringe benefits must be included in the grant budget because the grant will be charged fringe benefits against all applicable salary payments.

Exceptions to the above may, in very few cases, be posted by the source of external funding. These questions should be directed to the Office of the Associate Provost for Sponsored Research and Economic Development or the Grants Manager in Finance and Administration.

2. ADDITIONAL COMPENSATION ON EXTERNALLY FUNDED (SPONSORED) PROJECTS FOR FULL TIME STAFF (NON-FACULTY)

Additional Compensation means a payment in addition to the full time base appointment salary for work that is clearly in addition to regularly assigned duties and that must be performed outside of normal working hours or during vacation or compensatory time, as appropriate.  Additional compensation does not affect the base appointment salary.

Some federal and state agencies discourage the use of research or sponsored program funds for additional compensation; some agencies specifically prohibit additional compensation.  Intra-university consulting, and contributions to a sponsored agreement conducted by another faculty member or staff member at the same institution, is not eligible for additional compensation except as specified below: 

  1. Federal and state regulations allow additional compensation to be paid only when
    1. consultation is across departmental lines or involves a separate or remote operation. This is a rare event, and/or
    2. the work performed is in addition to regular duties and responsibilities, as determined by the Provost.
  1. Some federal and state agencies allow additional compensation to be paid from research and sponsored program funds. The grant proposal or contract should clearly state that additional compensation will be paid to University employees. The budget and justification should clearly indicate:
    1. the name and position of the individuals who will be receiving the additional compensation; and
    2. the work and services to be performed by these individuals; and
    3. the percent of additional effort committed to the project or the hourly rate and number of hours committed to the project; and
    4. the total dollar amount of additional compensation requested.
  1. The award document from the federal or state sponsoring agency must state that additional compensation is allowed or state that the proposal was accepted with no alterations regarding the request for additional compensation.
  1. The employee’s total Pace time and effort reporting, including the effort associated with the Additional Compensation, does not exceed 100%. Any payment to an employee from the University, independent of the source of funds (internal or external), becomes part of the 100% effort.  However, if an employee works as an independent consultant outside of the University hours, and the payment is not through the University, then this is not defined as Pace effort.
  1. The rate of compensation is the same as the rate for the employee’s regular salary;
  1. The arrangement has been approved in advance by the (a) Supervisor of the employee’s administrative department and/or appropriate Dean, and (b) Provost.

Additional Notes:

7.  To request Additional Compensation, use form, “Salary Increase/Payment Authorization Form.”  The following documentation must accompany the form:

·        Memo signed by the Principal Investigator identifying the dates and hours worked(outside of the employee’s normal schedule.

·        Form should be signed by the person’s supervisor and the Principal Investigator of the sponsored agreement.

3. STIPENDS AND CONSULTING

“Stipend” refers to a lump-sum payment paid directly from Pace University funds, in addition to the base appointment salary, that provides recognition or incentives to an employee as established by the Provost. This is usually limited to sums less than $6,000.

Stipends may include: teaching excellence awards, appointment to Middle States committees or incentive payments. In addition, stipends may be paid to employees for musical or theatrical performances. Also covered are Scholarly Research Stipends and Temporary Faculty Stipends.  In these cases, no fringe benefits are deducted, and the employee recipient is solely responsible for the taxes resulting from these payments.   In addition, stipends can be paid to students from sponsored awards (ex: National Science Foundation undergraduate research stipends or Americorps “member” stipends).  

A stipend does not increase the base appointment salary. However, a stipend payment may affect a faculty’s member’s total effort and care should be taken that effort does not exceed 100%. As discussed above, Summer salary from externally sponsored programs is not paid as a stipend. 

For information on processing of non-recurring faculty stipends please see, Pace University Non-Recurring Faculty Stipend Procedure.

In general, federal or state agencies discourage the use of federal sponsored research funds for stipends, even for additional compensation. Consulting by a Pace University employee to a Pace University sponsored agreement is generally not eligible for additional compensation.

References

Pace University Non-Recurring Faculty Stipend Procedure (William McGrath, December 2007)

NSF Award and Administration Guide http://www.nsf.gov/pubs/policydocs/pappguide/nsf08_1/aag_index.jsp

Document Number: aag081, effective for proposals received on or after January 5, 2008

NIH Grants Policy Statement

http://grants.nih.gov/grants/policy/nihgps_2003/index.htm

Effective for all NIH grants and cooperative agreements with budget periods beginning on or after December 1, 2003.

Office of Management & Budget Circular A-21

http://www.whitehouse.gov/omb/circulars/a021/a021.html

(05/10/2004), section          J(10)(d)(2)