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HCM Global HR
Define Legal Entities for HCM
Instructor Guide
August 8, 2013
Copyright 2013, Oracle and/or its affiliates. All rights reserved.
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CONTENTS
Lesson 1: Define Legal Entities for HCM ......................................1
Lesson Objectives ................................................................................... 1
Legal Entities Overview ............................................................................ 2
Legal Entity Role ..................................................................................... 3
Legal Entity Considerations ....................................................................... 4
Demonstration: Managing Legal Entity HCM Information ................................ 5
Legal Entity and its Relationship to Divisions ................................................ 7
Instructor Note: Legal Entities and Divisions ................................................ 8
Legal Entity and its Relationship to Worker Assignments and Legal Employer..... 9
Legal Entity and Payroll Reporting ............................................................ 10
Legal Entity and Legal Reporting Units ...................................................... 11
Instructor Note: Storage Tables ............................................................... 12
Legal Reporting Units Overview ............................................................... 13
Define Legal Entities for HCM Review Question 1 ........................................ 14
Define Legal Entities for HCM Review Question 2 ........................................ 15
Define Legal Entities for HCM All Questions and Answers .............................. 16
Lesson Highlights .................................................................................. 17
i
Lesson 1: Define Legal Entities for HCM
A legal entity has a separate legal identity and therefore conducts aspects of your
business for the following reasons:
Legal entities must comply with the regulations of jurisdictions in which they register. To
support local reporting require ments, legal reporting units are created and registered.
The following screenshot is the Legal Entity page for InFusion Corp USA1.
Legal entities can be identified as legal employers and therefore, are available for use in
Oracle Fusion Human Capital Management (HCM) applications.
Demonstration Scope
Review key fields in the HCM information for the InFusion Corp USA1 legal entity.
Demonstration Steps
Start Here
Setup and Maintenance work area
1. In the Search region, in the Name field, enter Manage Legal Entity HCM
Information.
3. In the Manage Legal Entity HCM Information task row, click Go to Task.
5. Click Search.
6. In the Search Results region, click on the name InFusion Corp USA1.
7. Use the Work Day Information section to define the standard working hours for
each worker assignment in the legal entity.
Note: You can also enter work day information at the enterprise,
department, and position level.
8. In the Legal Employer Information section, use the Salary Level field to select
the level at which salary can be specified, for example Assigment or employment
terms.
9. Use the Worker Number Generation field to specify whether the application
generates a number for each worker.
Note: By default, worker numbers are not used. If you enable worker numbers
for the enterprise, then only you can specify worker numbers for the legal
employer.
11. Use the People Group Flexfield Structure field to select the flexfield that
enables you to record people group information and assign people to specific
groups such as unions or working groups.
12. Use the Employment Model field to select either a 2-tier or 3-tier model for the
legal entity.
You can use the Manage Legal Entity task in FSM to associate a legal entity with a
division.
Legal entities that employ people are called legal employers in the Oracle Fusion
Legal Entity Configurator.
You must enter legal employers on worker assignments in Oracle Fusion Human
Capital Management.
Your legal entities are required to pay payroll tax and social insurance such as social
security on your payroll.
You can register payroll statutory units (PSUs) to pay and report on payroll tax and
social insurance on behalf of many of your legal entities. For example, if you are a
multinational, multicompany enterprise, then you register a payroll statutory unit in each
country where you employ and pay people. You associate a legislative data group
(LDG) with a payroll statutory unit to provide the correct payroll information for workers.
As the legal employer, you might be required to pay payroll tax, not only at the national
level, but also at the local level.
You meet this obligation by establishing your legal entity as a place of work
within the jurisdiction of a local authority.
Set up legal reporting units to represent the part of your enterprise with a specific
legal reporting obligation.
You can also mark these legal reporting units as tax reporting units, if the legal
entity must pay taxes as a result of establishing a place of business within the
jurisdiction.
Create and register legal reporting units to support local reporting requirements. When
you first create a legal entity, the Oracle Fusion Legal Entity Configurator automatically
creates one legal reporting unit for that legal entity with a registration.
Plan and define your legal reporting units at both the local and national levels if you
operate within the administrative boundaries of a jurisdiction that is more granular than
country.
For example:
If the legal entity establishes operations requirements for each local area in a
country that requires reporting of employment and sales taxes locally as well as
nationally.
If you need more than one legally registered location to meet this legal entity's
reporting requirements in each local area.
Legal entities in Europe operate across national boundaries, and require you to
set up legal reporting units for the purposes of local registration in each country.
1. True
2. False
1. True
2. False
True
2. You must enter legal employers on worker assignments in Oracle Fusion HCM.
True
Lesson Highlights
You should have learned how to: