Paying VA Investigators For Corporation-Funded Work: NAVREF Guidelines
Legislation passed by Congress in 1996 and a subsequent directive by VHA repealed the VA rules that restricted outside professional activities of Title 38 employees, most doctors and nurses. Congress removed the requirement that full time Title 38 employees must obtain advance approval before accepting outside employment. However, Congress did not change regulations addressing conflict of interest and standards of ethical conduct that have been in place since 1917.
The changes, however, are prompting some nonprofit research and education corporations (NPCs) to consider taking a stance on whether to pay VA investigators—full time or part time, PhD or MD—for work performed on projects funded by the NPC and performed outside their VA tour of duty. Because VA approval of outside employment is no longer required, responsibility rests with the payer and payee.
NAVREF strongly recommends using extreme caution anytime an NPC considers paying a VA employee and to avoid it if at all possible. Should an NPC want to explore this possibility regardless of this advice, the following guidelines are intended to assist individual NPCs in the decision-making process.
Title 18 USC 209(a) "prohibits an officer or employee of the executive branch or an independent agency of the United States Government from receiving salary or any contribution to or supplementation of salary from any source other than the United States as compensation for services as an employee of the United States."
This is frequently referred to as the anti-supplementation of salary statute; that is, a prohibition against both payment and receipt of compensation for services within the scope of a federal employee's government work. Violations subject both the payee and the payer to penalties amounting to as much as $50,000 and/or five years imprisonment.
While the statute is clear, there are issues that complicate implementation. First, there are instances when work on non-VA funded projects becomes part of the investigator's VA responsibilities and as such is not compensable by the NPC. Second, it may be difficult to separate VA (and VA-paid) work from non-VA (and possibly NPC-paid) work to the satisfaction of local supervisors as well as non-scientific lay persons, General Counsel and the Inspector General, particularly because an investigator's VA and NPC work are often similar and investigators frequently perform varied tasks during unconventional hours. In examining comparable situations, the courts have emphasized that the totality of circumstances must be examined in each individual case and that no one factor is determinative. A VA attorney legal opinion verifying that NPC-paid work is outside the scope of an individual's government work provides safe harbor to both the employer and the employee in the event of an allegation of supplementation of pay or dual compensation.
NAVREF strongly recommends that any VA investigator seeking NPC pay should obtain and provide to the NPC written opinon by a VA attorney that the work performed for NPC pay is distinct from work performed for VA. This may be accomplished by having the PI provide the attorney with both the VA and NPC position descriptions. However, even when the VA attorney conclusion is that the work is "different." such opinions generally include cautions about potential violations of federal ethics rules. NPCs should be aware that the burden is on the employee and the NPC to ensure that no violations occur. This requires careful documentation of the work the employee performs and the hours worked.
Testing the Factors
In the absence of practical VA guidance specific to the issue of NPCs paying VA investigators for NPC work, NAVREF proposes the following tests to use when deciding whether work done on a specific NPC-funded project makes an investigator eligible for NPC pay:
Work: Determining what is non-VA work may be clarified by first defining VA-paid work. NAVREF recommends that this be accomplished by a memorandum of understanding (MOU) obtained from VA management or a position description specifying the investigator's VA (and perhaps university) scope of work and responsibilities. The NPC should also provide a position description for the proposed employment.
If a VA attorney concludes these are too similar, an NPC should not pay compensation to the VA employee. Unquestionably, work on VA-funded Merit Reviews and work pursuant to Career Development awards is VA-paid work. Beyond these, however, there may be gray areas.
Location: Does work performed for the NPC-funded project occur in a location or setting different from the investigator's VA-paid work?
Sponsor: Are the sponsors of the work different? VA and non-VA sponsors usually are easy to distinguish. When VA is the funding source or sponsor, the work will generally fall within VA-paid work.
However, there may be instances when an investigator may have multiple projects supported by different sponsors. Who signs the agreement with the sponsor? Who is the payee? If VA is the payee or signatory, this may be VA-paid work. If the NPC is the payee or signatory, this may be NPC-paid work.
Project: Is the NPC project different from the investigator's VA-funded project(s)? Does funding depend on preparation and approval of a separate grant proposal? Does each require separate R&D Committee approval? Is each reported separately to RDIS? Are the investigator's responsibilities or the nature of the VA- and NPC-funded projects different such as wet lab work vs data analysis; PI vs subinvestigator?
Hours: Determining non-VA hours may be clarified by first defining VA hours. As recommended above in regard to clarifying work, NAVREF recommends that this be accomplished by an MOU with VA (and possibly the affiliated university) or appropriate VA supervisors.
Is work on the NPC-funded project done outside normal work hours? Outside the normal VA tour of duty? Outside a VA irregular tour of duty? How many hours will the NPC-funded project require weekly? Is the total of VA-, university- and NPC-paid hours reasonable?
Supervisor: Does the investigator have different supervisors or approving authorities for his/her VA- and NPC-funded work?
Reminder: No one factor is determinative; the final conclusion should be based on an examination of the totality of circumstances.
The board of directors of an NPC wishing to provide employment opportunities for VA investigators should deliberate carefully, secure the understanding and cooperation of local VA management and establish clear written policies, including pay schemes.
Questions and advice pertaining to the relevant ethical/criminal issues should be referred to the local VA regional counsel or General Counsel. In order to obtain safe harbor from the possibility of dual compensation, NPCs should require any investigator seeking NPC pay to obtain written certification by a VA attorney that the work performed for NPC pay is distinct from work performed for VA.
A VA MOU specifying the investigator's VA (and possibly university) tour of duty—hours and responsibilities—should be a pre-requisite for requesting NPC pay. Particular detail should be provided concerning any VA-paid activity that is related to the proposed NPC-paid activity.
The board of directors should develop an application process for an investigator to use in requesting NPC pay. This may include an appropriate approval mechanism to determine that the NPC-paid work is different from the VA-paid work. As stated above, NAVREF recommends review by a VA attorney for conflict of interest/ethical issues.
Any pay policies already governed by VA/affiliated university agreements should be incorporated into NPC policy.
Time sheets should be compiled by the investigator and signed by an appropriate NPC official.
Using the tests discussed above, there may be instances when one or more components of a single project could be determined to be compensable by the NPC, while other components may not be compensable. In cases suggesting such fragmentation of a project, additional documentation and approval should be required.
Although VA approval of outside professional activities is no longer required, NAVREF recommends full disclosure to all interested parties.
Outside Professional Activities, VHA Directive 5113, February 3, 1997
Bribery Graft and Conflicts of Interest; Salary of Government Officials and Employees Payable Only by United States, Title 18 USC 209
Bribery Graft and Conflicts of Interest; Penalties and Injunctions, Title 18 USC 216