For-profit, for profit, administrative requirements, labor distribution requirements for for-profit organizations, business

18.4.6 Labor Distribution Requirements for For-Profit Organizations

Salary and wage amounts charged to grant-supported projects for personal services must be based on an adequate labor distribution system that distributes payroll costs in accordance with generally accepted practices of like organizations. Standards for labor distribution systems are contained in the applicable cost principlesThe government-wide principles, issued by OMB (or, in the case of commercial organizations, the Federal Acquisition Regulation [48 CFR 21], or, in the case of hospitals, 45 CFR 75, Appendix IX, "Principles For Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals"), on allowability and unallowability of costs under federally sponsored agreements. See Cost Considerations-The Cost Principles for additional details. (other than those for for-profit organizations).

NIH requires for-profit organizations to conform with industry standards to support salary and wage charges to NIH grants. Therefore, unless an alternate system is approved by the GMO, the recipient must maintain a time and-effort reporting system for both professional and other-than-professional staff reflecting daily after-the-fact reporting of hours expended on individual projects or indirect activities. The system must record both hours worked and hours absent. This information must be certified by an AOR no less frequently than every pay period.