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This is the phrase :

During months where no time on site is required, time spent on this project will be capped at 20 hours.

According to you, the meaning is that "during months with no site activity, one can bill a maximum of 20 hours" or "The word “capped” does not mean that you should bill for 20 hours"?

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This sentence: "During months where no time on site is required, time spent on this project will be capped at 20 hours".

in English means:

During months where no time on site is required, time spent on this project will have a top limit in terms of hours of 20 hours.

to cap=to set a maximum limit to something

You can work off-site when on-site work is not needed, but no more than the maximum limit of 20 hours.

There may be a legal interpretation of this sentence but it is not relevant to understanding what it means in English.

For example, some country or part of a country (state or region) may have special rules regarding working hours, but that does not change what the sentence says in non-legal terms.

Merriam Webster: : an upper limit (as on expenditures) : CEILING a cap on military spending

I can't see whether this is per month or per week.

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Capped is an ordinary commercial usage, meaning "upper permissible limit".

You'll read

  • Expenses are capped at £20 per day
  • Costs are capped at £20,000 for the project
  • Project time is capped at 10 hours

Under these conditions, if I spent £30 on any given day, I can still only ask my company for £20.

It's a general way of specifying a limit. Without the exact context, it's impossible to know whether "Project time is capped at 10 hours" means "It's only permitted to work 10 hours" or if it means "It's only permitted to ask for 10 hours' money".

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