Oracle Fusion HRMS For Kuwait-Payroll Setup White Paper Release 9
Oracle Fusion HRMS For Kuwait-Payroll Setup White Paper Release 9
Oracle Fusion HRMS For Kuwait-Payroll Setup White Paper Release 9
N OVEMBER 2015
Disclaimer
The following is intended to outline our general product direction. It is intended for information
purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any
material, code, or functionality, and should not be relied upon in making purchasing decisions. The
development, release, and timing of any features or functionality described for Oracles products
remains at the sole discretion of Oracle.
Table of Contents
Disclaimer
Introduction
Document Updates
Functional Setup
Verifying Geographies
11
12
Legal Jurisdictions
13
Legal Authorities
16
17
18
Legal Addresses
19
Legal Entities
20
21
22
22
23
25
27
29
29
Workforce Structures
33
34
Addresses
Address Validation
34
34
Names
34
Legislative Information
35
Hiring a Worker
36
44
Person Information
44
45
46
47
48
49
Employment Management
51
53
55
55
57
59
Creating Associations
60
Terminating a Worker
62
Introduction
You need to define various legislative entities in Human Capital Management (HCM) to successfully
process HR and Payroll information. Most of these setups are statutory in nature and are required for
legal compliance and statutory reporting. This document describes the steps to define such information
in Oracle Fusion Human Capital Management in India. This includes the following:
Legal Jurisdictions
Legal Addresses
This document also describes the steps to perform the following tasks after the legislative entities are
set up:
Hiring a Worker
Terminating a Worker
The steps explained in this document are based on the following assumptions:
The India geographical structure and data values have either been set up manually using the
Manage Geographies task or been uploaded using the Load Geographies for India task.
Document Updates
This document is based on the most current application release as of the documents publication date.
Content is updated only as needed to reflect major changes to existing features or when significant
new features are added to the localization. For this reason, it is possible that some minor user
interface differences may exist between the version being implemented and the version described in
this document.
Comments and Suggestions
Your comments are important to us. We encourage feedback about Oracle Fusion Applications Help
and guides.
Please send your suggestions to: [email protected].
You may also use the Send Feedback to Oracle link in the footer of Oracle Fusion Applications Help.
Functional Setup
These tasks are performed in the Setup and Maintenance work area in Functional Setup Manager
(FSM) using an Application Implementation Consultant role. An Application Implementation
Consultant has access to all setup tasks across all products. The setup can be done
For some tasks, you must set the scope prior to running the task. For example, before running the
Manage Legal Entity HCM Information task, you must select the Legal Entity for which you are adding
information. Where necessary, the tasks in this document include instructions for setting the scope.
Sign in to Oracle Fusion Applications using a role that has the profile of a super-user and
privileges to create all organizational structures:
2.
3.
4.
Search for your project by entering the name of the project in the Name field. You can enter
% as a wild card in the search.
5.
Note: Navigate through the Workforce Deployment task to setup different entities in the following
sections. Optionally, the setup can be done by querying and performing the tasks directly from the All
Tasks tab:
Verifying Geographies
Geographical information is used in Oracle Fusion Applications for address entry and validation, and
geography-based business processes, such as territory management and shipping. There are no
predefined geographies for India and you must define them yourself.
Please refer to the following article on My Oracle Support that explains how to load geography data:
Oracle Support Document 1341174.1 which can be found at:
https://support.oracle.com/epmos/faces/DocumentDisplay?id=1341174.1
After loading geography data, you can verify whether geography data has been uploaded successfully
from the Manage Geography Hierarchy screen.
1.
2.
3.
Click the green checkmark for each type of geography data you want to verify
a.
4.
b.
Structure Defined
c.
Hierarchy Defined
d.
Validation defined
Verify the information on each page and make any necessary changes, then click Save and
Close.
Payroll Interface
2.
On Manage features by Country or Territory page, Search for India in the search box to
locate the correct row:
3.
Edit the Selected Extension list of values to set the correct extension you are using.
4.
5.
Save
Select Manage Legislative Data Groups in the implementation project task list:
2.
The Manage Legislative Data Groups screen appears. Click on the Create.
3.
4.
Enter a unique name for the Legislative Data Group you are creating.
5.
6.
7.
Select the Cost Allocation Structure. This is the cost structure you defined previously. The
cost structure is used to cost payroll payments and deductions.
8.
Legal Jurisdictions
A Legal Jurisdiction is a physical territory (a group of countries, country, state, county, parish, etc.),
which comes under the purview of a legal authority under a specific type of legislation (French Labor
Law, Irish social welfare laws, Indian Income Tax). An example of a Legal Jurisdiction in India can be
Company Law.
Use the following steps to define Legal Jurisdictions:
1.
2.
Click on Create :
3.
a.
Enter a unique Name for the Legal Jurisdiction you are creating, for example
Professional Tax or Provident Fund.
Note: India Company Law and India Income Tax are the seeded Legal Jurisdictions
available for India.
b.
Search and select the Territory India with Geography type Country to create Legal
Jurisdictions for Provident Fund and Employee State Insurance. Select the territory
with appropriate Geography type for Professional Tax and labour Welfare Fund.
c.
d.
Company Law
Income Tax
Provident Fund
Professional Tax
Labour Welfare Fund
Employee State Insurance
Indentifying Jurisdiction.
Notes:
The identifying jurisdiction is usually the first jurisdiction that the Legal Entity
must register with, in order to be recognized in its territory.
There should be at least one Identifying Jurisdiction for the country. Also, there
can be only one Identifying Jurisdiction for the country. This means that making
one jurisdiction identifying makes the current identifying jurisdiction nonidentifying.
India Company Law is the pre-defined Identifying Jurisdiction that is available in
India. Customer should not create any other jurisdiction as Identifying
Jurisdiction for India.
The Identifying Jurisdiction is automatically associated with the Legal Entity.
e.
Legal Entity Registration Code. Select the appropriate value, i.e. the code with which
the Legal Entity is registered with the jurisdiction. For example Corporate
Identification Number for Company Law and Permanent Account Number for
Income Tax.
f.
Legal Reporting Unit Registration Code. Select the Legal Reporting Unit Registration
Number. The following registration numbers have been predefined for the India
localization:
Note: India Income Tax is the pre-defined Jurisdiction that is available in India.
The user does not need to define the jurisdiction with Legal Reporting Unit
Registration Code as TAN Number.
4.
Legal Authorities
A Legal Authority is a government or legal body that is charged with such powers as making laws or
levying and collecting fees/taxes. A Legal Authority in HCM is used to set up the agencies where
remittances are made and payroll information is reported.
For India, Legal Authorities can be the Ministry of Corporate Affairs, Income Tax Department,
Employee Provident Fund organization, Employee State Insurance Corporation, etc.
Use the following steps to define Legal Authorities:
1.
2.
Click on the Create button in the Manage Legal Authorities screen. The following screen
appears:
3.
Enter the name of the Legal Authority, for example Employee Provident Fund
Organization.
b.
Select the appropriate Tax Authority Type. You can select from the following three
types:
1.
Collecting
2.
Reporting
3.
For example, the Employee Provident Fund Organization is of type Collecting and
Reporting.
4.
2.
3.
Add the purpose of the address by clicking on the + sign under Address Purposes.
4.
Select the purpose from the list of values, for example Payment.
Notes:
You can create more than one address with different purposes for a Legal Authority. For
example, one address for general correspondence and the other for tax remittances.
2.
Select the Legislative Category from the single select choice list, for example Provident
Fund for the Employee Provident Fund Organization:
3.
Note: You can add more than one Legislative Category to a Legal Authority.
Legal Addresses
A Legal Address is the address registered in the Identifying Jurisdiction at registration time and is used
to help identify the Legal Entity. This address will be printed on legal documents when required.
A Legal Address is required when creating a Legal Entity.
Use the following steps to define a Legal Address:
1.
2.
3.
4.
Legal Entities
A Legal Entity is an entity unequivocally identified and given rights and responsibilities under
Commercial Law, through the registration with the countrys appropriate authority. Their rights and
responsibilities are enforceable through the judicial system.
When you set up Legal Entities, you can identify them as Legal Employers and Payroll Statutory Units,
which makes them available for use in HCM. Depending on how your organization is structured, you
may have a single Legal Entity that is both a Legal Employer and a Payroll Statutory Unit, or you may
have multiple Legal Entities, Legal Employers and Payroll Statutory Units.
Payroll Statutory Units enable you to group Legal Employers so that you can perform statutory
calculations, such as individual income tax calculations, at a higher level. For example, if multiple
Legal Employers belong to the same Payroll Statutory Unit and an employee receives income from
more than one employer within a month, you can calculate the persons individual income tax on the
aggregated income. Alternatively, if each of the Legal Employers belongs to a separate Payroll
Statutory Unit, then the persons individual income tax is calculated separately for each employer. A
Legal Employer can belong to only one Payroll Statutory Unit.
Note: For the India localization there is no requirement to group multiple Legal Employers under one
Payroll Statutory Unit for calculating the aggregate income tax across the Legal Employers. So in
India, every Legal Employer should be defined as a Payroll Statutory Unit.
Use the following steps to define a Legal Entity in HCM:
1.
2.
3.
b.
c.
Enter a unique number to identify the Legal Entity in the Legal Entity Identifier
field.
d.
e.
In India, each Legal Entity is also a Payroll Statutory Unit. You therefore need to
make sure that the Payroll Statutory Unit check box is checked for each Legal
Entity you define for India.
Note: The Payroll Statutory Unit field will only be enabled if the Legal Entity is not a
Payroll Statutory Unit (Payroll Statutory Unit check box is unchecked). Since each
Legal Entity is also a Payroll Statutory Unit in India (Payroll Statutory Unit check box
is checked), there is no need to select the Payroll Statutory Unit from the list of
values.
4.
f.
Select the Legal Employer check box if the Legal Entity employs people.
g.
h.
i.
j.
k.
Notes:
What constitutes a Legal Employer will vary from country to country, but this must not be
confused with a Tax Reporting Unit, which is primarily used to report Tax Information. A Legal
Employer is the organization to which the contractual agreement exists with the person.
In most cases, a Legal Employer is also a Payroll Statutory Unit, but a Payroll Statutory Unit
can represent multiple Legal Employers. In Fusion Applications, the Payroll Statutory Unit will
be stored on the Payroll Payment Relationship.
A Legal Entity is also a Legal Reporting Unit unless there is a specific reporting requirement
with registrations which are not same as that of Legal Entity.
2.
Click on Go To Task.
3.
4.
5.
This step is required when you are defining the scope for the first time. The Legal Entity can
be directly added to scope under the implementation project in subsequent scope selections:
Select Manage Legal Entity HCM Information in the implementation project task list.
2.
Click on Go to Task.
This will be enabled if the Legal Employer check box is selected while creating the Legal Entity.
1.
On the first tab, enter Legal Employer details and Legal Employer information.
2.
Optionally, enter workday information such as the start and end times of work, standard
working hours and frequency.
3.
In the Salary Level field, choose at what level the salary information will be assigned at: the
term or assignment level.
4.
5.
Choose whether or not you allow employment terms to be overridden at the assignment level.
6.
Select the People Group Flexfield Structure (previously defined) that suits your Legal
Employer.
7.
Optionally, enter age related information for employment in fields Minimum Working Age,
Minimum Retirement Age, Maximum Retirement Age and Minimum Age of a Minor.
8.
Select the Employment Model, i.e. the two or three-tier employment model with a single
assignment or multiple assignments. See the online help and documentation for more
information about the employment model and the critical choices you have to make.
9.
Registration Number
This will be enabled if the Payroll Statutory Unit check box was checked when creating the Legal
Entity.
1.
2.
Select the previously defined Legislative Data Group in the Associated Legislative Data
Group list of values.
3.
4.
Submit to save.
Note:
You need to map the Legislative Data Group to a Payroll Statutory Unit so that all payroll objects like
elements, payrolls, payment methods, etc. are created within the context of a Legislative Data Group.
5.
Scroll down to the link for India-specific Payroll Statutory Unit Information. India-specific
Gratuity Information can be entered:
Select Manage Legal Reporting Unit in the Define Legal Reporting Units for Human Capital
Management task group.
2.
Click on Go to Task.
3.
You will be prompted to Select and Add, or Create New in scope selection.
4.
You can Select and Add the previously created Legal Entity to edit further, or create a new
Legal Reporting Unit:
5.
When creating a LRU for Income Tax, select India in the Territory list of values. For other
types of LRUs (PF, PT, ESI and LWF), the territory would typically be one of the states in
India.
6.
Enter the Name of the Legal Reporting Unit, the Start Date and End Date.
7.
The Identifying Jurisdiction for the territory will be displayed by default when the Territory is
selected. Select a different Jurisdiction if required. For example, when creating a LRU for
Income Tax (with India as the territory), you need to change the default jurisdiction India
Company Law to India Income Tax.
8.
9.
10. Optionally choose if this is the Main Legal Reporting Unit and associated effective start date.
11. Save and Close your work.
Note: In most cases a Legal Entity is a Legal Reporting Unit and you do not need to create additional
ones. However, you may have to create additional Legal Reporting Units if there is a specific reporting
requirement where registrations are not the same as that of the Legal Entity, or just for convenience.
Select Define Legal Entities for Human Capital Management in the implementation project
task list
2.
3.
Search for and select the Legal Entity you just created and then click Save and Close.
4.
5.
The Manage Registrations page displays a list of registrations for this Legal Entity:
Note: A registration is automatically created for the Company Law jurisdiction when the Legal
Entity is created, based on the registration details provided.
6.
7.
8.
The Issuing Legal Authority field displays a list of all Legal Authorities associated with
the legislative category of selected jurisdiction.
The Registered Address field displays a list of all predefined legal addresses.
Note: Each office/Legal Reporting Unit in India needs to be registered with the legal authorities in the
following five legislative categories:
1.
2.
Professional Tax
3.
4.
5.
The following table explains the details of the legal registrations for India:
Name
Territory
Company Law
India
Legislative
Category
Company Law
India
Income Tax
City, States
of India
India
Professional Tax
India
Employee State
Insurance
Labour Welfare Fund
State
Provident Fund
Legal Entity
Registration Code
Corporate
Identification Number
Permanent Account
Number (PAN)
Legal Entity Registration
Number
Legal Entity Registration
Number
Legal Entity Registration
Number
Legal Entity Registration
Number
Set the scope for this task by selecting the parent Legal Entity and then the Legal Reporting
Unit, as described in previous tasks.
2.
Select Manage Legal Reporting Unit HCM Information in the implementation project task
list:
3.
On the Manage Legal Reporting Unit HCM Information page, select the Tax Reporting
Unit and click next:
4.
Select Tax Reporting Unit Type and fill the respective information.
For TRU of type India Employee State Insurance, click on the Employee State Insurance link
and complete the employer representative information:
6.
For TRU of type India Provident Fund, click on the Provident Fund link and complete the
relevant information:
7.
For TRU of type India Income Tax, click on the Income Tax link and enter the required
information:
8.
For TRU of type Professional Tax, click on the Professional Tax link and enter the required
information:
Note: You need to create multiple TRUs of type Professional Tax for each state/city.
9.
For TRU of type Labour Welfare Fund, click on the Labour Welfare Fund link and enter the
required information:
Workforce Structures
Workforce structure setup should be performed once organization structure setup is complete.
Workforce structures are used to:
Define additional partitioning of the workers within the organization, including divisions,
departments, and reporting establishments.
Assign roles to workers within the organization, including grades, jobs, and positions.
Set up actions and reasons that apply to the work relationship cycle of workers.
Locations
Divisions
Departments
Reporting Establishments
Roles in Organization
o
Grades
Jobs
Positions
Addresses
Names
Legislative information
Addresses
The format in which addresses must be entered for workers located in the India is predefined and
should not be modified during implementation. The predefined format enables the following fields
Country (Mandatory)
Address Line2
Address Line 3
Pin Code
State
The following figure shows how an Indian address is captured in the application:
Address Validation
Address validation is performed on the Pin Code, which must be in the NNNNNN format where N is a
number.
Note: You can control the Pin Code validation by enabling/disabling the address validation check box
for the India legislation using the Manage Features by Country or Territory task. Refer to Address
Validation Settings
Names
The style in which names must be entered for workers India Legal Employers is predefined and should
not be modified during implementation. The following name style is used in Oracle Fusion Applications
for India:
Title
First Name
Middle Name
Suffix
Alias Name
The following figure shows how an Indian name is captured in the application:
Legislative Information
India specific legislative information can be captured for each person. None of these fields are
mandatory, and it is up to the enterprise to decide which data needs to be entered.
India supports the following legislative information:
Marital Status
Religion
The following figure shows how India legislative information is captured in the application:
Hiring a Worker
Once the organizational and workforce structures have been defined by the implementation team, the
user is ready to manage workers data in the application. To perform tasks related to a person and
employee management, you would typically sign in to the application using a role connected to a
functional user, such a Human Resources Specialist, rather than to a member of the implementation
team:
The new hiring process is the first task in the workforce lifecycle. To hire an employee:
1.
2.
Note: The other supported person types for the India are:
3.
Contingent Worker
Non Worker
Pending Worker
4.
The Hire Reason field displays a list of valid action reasons defined in the hire action.
The Legal Employer field displays a list of all legal employers that have been set up
previously.
The Name Style is determined by the predefined name style for India.
The Gender lookup has the India-specific value Transgender in addition to Male and
Female.
There are no predefined National Identifier types for the India localization.
An address is required and must conform to the predefined India address format.
5.
6.
7.
Contacts
For India the Regular Passport Type has been predefined. This is an extensible lookup
so you can add additional passport types if required.
Name as in Passport
Because the employer in this example uses the 2-tier employment model (as selected in
the Legal Employer setup), employment information is entered only at the assignment
level. If the employer uses a 3-tier model, then information must be entered at both the
terms and assignment levels. To enter information at the term level, click the Employment
Terms tab.
The Business Unit, Job, Grade, Department and Location must have been previously
defined. The Business Unit you select determines which jobs, grades, and departments
you can select.
8.
9.
Review the information captured for the person on the Review Page.
10. Submit.
2.
3.
Navigate through the various tabs to view and manage the complete set of person
information.
4.
Select either Edit > Correct to correct the existing information from the start date, or Edit >
Update to modify the information from the current effective date retaining the previous
information.
You can modify the previously entered personal information and also enter the following new
information:
Date of Death
Country of Birth
Region of Birth
Town of Birth
Correspondence Language
Blood Type
You can create multiple home and/or mailing addresses for the employee.
On the Contacts tab you can enter and maintain contact information for employees, including
emergency contacts:
Create a new person as a contact by clicking on the Create button on the Contacts tab:
2.
Click on the Create from Existing Person button to create a new contact by selecting an
existing person from the database:
All the addresses of the employees are shown under Addresses. You can select one
of employees addresses as the address of the contact. Alternatively, you can enter a
different address for the contact.
On the Documents tab you can enter details of the persons citizenships, drivers licenses, passports
and visas and permits. You can also upload additional reference documents in the Documents of
Record section:
On the Disabilities tab you can enter details related to the persons disabilities:
After selecting India as the Context Value in the Additional Information section on the
Legislative Information tab, you can specify whether or not a disability certificate is available
for the disability that is recorded for the person.
Community
Caste
Height
Weight
Residential Status
PAN Reference Number (if the person has no PAN Number but has applied for one)
Employment Management
The Person Management work area also provides tasks for maintaining employment information:
From here, you can modify an existing instance of employment or add a new instance if, for example,
an employee has a job change.
2.
Select the Manage Elements task under the Earnings and Deductions task
header.
3.
4.
Select the Legislative Data Group that is set for the Legal Employer in India.
5.
6.
7.
On the next screen, click the Edit button and select Correct:
8.
9.
10. Enter a unique Element Eligibility Name and complete the information on the
General Information, Input Values and Costing tabs:
11. Submit.
2.
3.
Search for and select the employee for whom you want to create the card.
4.
Select the Manage Payroll Calculation Information task in the Payroll task list.
5.
Click the Create button on the Manage Payroll Calculation Information tab:
6.
Enter the Effective Date and select Deduction Information in the Name field to define data
needed for calculating and reporting Income Tax, Professional Tax, Provident Fund and
Labour Welfare Fund deductions:
2.
You can enter house rent details to be considered for income tax calculation on the House
Rent Details tab:
3.
You can enter information regarding various investments that are eligible for income tax
deduction on the Chapter VIA Deductions tab:
4.
You can enter income from house property and also other income to be considered for
income tax calculation on the Other Income tab:
5.
6.
In the Calculation Card Overview pane, select Professional Tax to specify if the employee is
exempted from Professional Tax, as well as the exemption reason:
2.
You can enter Provident Fund details and any additional Voluntary Provident Fund
contribution details for the employee.
3.
You can also choose the calculation base for Provident Fund and EPS (Employees Pension
Scheme) contributions, which can be either actual salary or the statutory limit:
4.
In the Calculation Card Overview pane, select Labour Welfare Fund to specify the eligibility
of the employee for the Labour Welfare Fund:
Creating Associations
For the India localization you must associate a TRU with the employees employment terms or
assignment for each component of the deduction card.
To define associations:
1.
2.
3.
On the Create Association window, select the Tax Reporting Unit responsible for reporting
the deductions for this person:
4.
Associate a Tax Reporting Unit for each deduction component of the deduction card.
Terminating a Worker
When a persons employment ends, the work relationship must be terminated. To terminate a work
relationship:
1.
2.
On the Manage Work Relationship page, select Terminate from the Actions menu:
3.
On the Terminate Work Relationship page, enter the details of the termination, including the
termination reason:
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Oracle Fusion HCM (India): HR Setup and Functional Considerations
November 2015
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