The purpose of this policy is to provide information to assist in budgeting fringe benefit costs for sponsored programs and other operating accounts chargeable for fringe benefits.

This policy applies to all faculty, staff, and students at the University.

The University uses employee fringe benefit rates to recover the actual cost of employee benefits from individual funding sources. While on an individual basis, an employee may not participate in all benefits, the use of benefit rates serves to apply an average percentage to all employees within the same group.

Fringe benefits charged on faculty, staff, and student earnings are based on the rates approved annually by the Department of Health and Human Services, Division of Cost Allocation. The approved rates are effective July 1 of each year.

The University has developed two employee fringe benefit rates for current use in budget plans, external grant proposals, capital projects, and similar cost objects. The rates combine faculty, staff, and in some cases, students into:

1. a Full Time Rate (50% time or greater - benefits eligible), and
2. a Part-Time Rate (less than 50% time - non-benefits eligible).

The fringe benefit rate that is applied depends on a number of factors, including:

• Employee benefit eligibility
• Individual attributes, including position, job family, and student status
• Earnings used for payments

For the purpose of this policy, the terms below have the following definitions:

All individuals to whom this policy applies are responsible for becoming familiar with and following this policy. University supervisors and employees with student oversight duties are responsible for promoting the understanding of this policy and for taking appropriate steps to help ensure and enforce compliance with it.

Faculty and Staff: Responsible for using these rates in budgeting and planning documents, including external grant proposals which are being asked to fund employee salaries, wages and benefits. The benefit rates associated with the salary or wages paid to an employee must also follow any costing changes made within the payroll system.

Departmental Cost Center Managers: Responsible for understanding, validating, and reconciling the benefit rate to be used when re-costing salary charges.

University’s Controller’s Office: Responsible for preparing and submitting a proposal for future fringe rates to the federal government.

Failure to comply with this and related policies is subject to disciplinary action, up to and including suspension without pay, or termination of employment or association with the University, in accordance with applicable (e.g., staff, faculty, student) disciplinary procedures.

Brown University is a community in which individuals are encouraged to share concerns with University leadership. Additionally, Brown’s Anonymous Reporting Hotline allows anonymous and confidential reporting on matters of concern online or by phone (877-318-9184).

The following information complements and supplements this document. The information is intended to help explain this policy and is not an all-inclusive list of policies, procedures, laws and requirements.