Additional Remuneration in Horizon 2020 EARMA 21st Annual Conference, Leiden, 29 June 2015

Transcription

1 Additional Remuneration in Horizon 2020 EARMA 21st Annual Conference, Leiden, 29 June 2015 Milena Lojková Lucie Honzátková NCPs for Financial Issues in H2020, TC AS CR

2 Horizon 2020 Basic Documents 2/16

3 Drafting H2020 Funding Principles Feedback (beneficiarie s, NCPs, ) Financial Regulatio n RfP FP7 RfP FP6 Audit findings Simplification Reduction of administrative burden and complexity of financial provisions Wider acceptance of usual cost accounting practices of beneficiaries Elimination of financial error rate H2020 RfP MGA AGA 3/16

4 Personnel costs in H Definitions Basic remuneration salaries, social security charges, other costs included in the remuneration of personnel assigned to the action, arising from national law or from the employment contract basic salary + mandatory complements + variable complements Additional remuneration project-related bonus eligible only for non-profit entities, provided it is: usual remuneration practise of the beneficiary determined based on the objective criteria subject to eligibility ceiling (8000 EUR/year/full time employee working for the action) Ineligible bonus 4/16

5 Hourly rate calculation (HR) - Comparison with FP7 FP7 need to distinguish between individual salary components all salary components (including eligible bonuses) are reflected in the HR usual remuneration practice of beneficiaries respected H2020 Model Grant Agreement distinguishes between: Fixed salary components always included in HR ('basic remuneration') Variable extras depending on its nature: can be eligible and included in HR ('basic remuneration') can be eligible but not included in HR ('additional remuneration') can be ineligible and not included in HR (e.g. 'arbitrary bonus') 5/16

6 Decision tree Salary complement or supplementary contract resulting in a higher hourly rate Is it triggered by a specific project? (the employee would not have received the complement if it had not participated in the project) Is the amount fixed and mandatory by law, collective agreement or contract? Is the scheme of the complement authorised by law, collective agreement or the contract? ('arises from') Ineligible Is the beneficiary a non-profit legal entity? Is it triggered by the EU action? Is it paid for additional work or different expertise than the usual ones according to the (main) contract? Is the complement determined based on objective criteria established at least in the entity's internal rules? Is it based commercial targets (e.g. sales target), fund raising targets or profit distribution (dividends)? Arbitrary bonus Is it part of the usual remuneration practices of the entity? Is the complement determined based on objective criteria established at least in the entity's internal rules? Is it applied only to EU actions? Basic Remuneration Ineligible Additional Remuneration Source: Annotated MGA, v2.0 6

7 Case Study Impacts of the additional remuneration on the Czech universities and public research institutions 7/16

8 Remuneration system in the Czech Academia Main characteristic features: Competitive aimed at rewarding the most active researchers Multi-component low tariff is frequently compensated by a number of complements/bonuses for various activities of the researcher Multi-source funding of science 8/16

9 Internal remuneration rules = integral part of the entity's management Must be: Officially approved and applied to all staff Accessible to and known by the employees Compliant with the Labour Code Take into account several factors: Complexity of work and responsibilities Specific working conditions Work performance, work attitude and behaviour Extraordinary activities of the employee Determine individual salary components 9/16

10 Typical remuneration components CZECH academia Tariff Statutory complements (e.g. Premium for night work) Leadership bonus Personal evaluation/merit pay Bonus (triggered by the EU project) Other bonuses (related to other than EU project) Horizon 2020 Basic remuneration? Additional remuneration (if it meets eligibility criteria!) Ineligible 10/16

11 Personal evaluation/merit pay Reflects long-term very good working performance of the employee. Spreads over all (project and nonproject) activities of the researcher. The amount of personal evaluation is set out in salary statement of the employee (Annex to Employment Contract). Often reaches over 50% of tariff!!! 11/16

12 Additional remuneration Political message: Additional remuneration is a 'new option' which will be interesting especially for 'new' member states. Reality: FP7: Eligible bonuses could be charged in accordance with the beneficiary's usual practice; no ceilings applied H2020: Eligible bonuses are limited to max EUR (for a fulltime employee working exclusively for the action during the entire year) 12/16

13 Impacts on the CZ beneficiaries Eighteen months after the H2020 started, the Czech beneficiaries: are still not able to classify with certainty the individual salary components (basic/additional/ineligible) are concerned that even salary components, which we consider as 'basic remuneration', might be challenged by the auditors fear that first audit findings might discourage them from the participation in H2020 projects 13/16

14 Conclusion Simplification Reduction of administrative burden and the complexity of financial provisions Wider acceptance of usual cost accounting practices of beneficiaries Elimination of financial error rate 14/16

15 Questions 15/16

16