An ever-changing workforce leads to an ever-changing set of demands to manage working relationships effectively. This is perhaps best demonstrated by the growing requirement for companies to manage multiple employment situations. That is exactly what Concurrent Employment is designed to do.

Concurrent Employment (also known as multiple employment) has been around since SAP R/3 Release 4.6. The functionality described in this document refers to the solution provided in the current release of SAP HCM (SAP ERP 6.0). However, bear in mind that SAP is still developing and enhancing Concurrent Employment. It is not available for all countries. Users should read SAP Note 540451 (“Main switch activation for Concurrent Employment”) for details on how to turn on Concurrent Employment and to find which countries have this solution available.

Concurrent Employment in Practice

Having an employee working in two positions in your company can initially sound very appealing, but in reality it is far from simple. Take the hypothetical example of Pat Connell, a part-time receptionist at a company. Pat has worked for 18 years as a receptionist from Monday to Wednesday and stayed at home two days a week to raise her children.

Now that her children have grown up and left home, Pat has decided she wants to work the remaining days of the week. The company already has someone working reception on Thursday and Friday, so Pat takes a job working in the cafeteria two days a week. What happens to Pat's personnel record? Pat's reception position pays $61,000 a year while her work in the cafeteria pays $21.00 an hour.

Because of her two unrelated jobs, she is a member of two different unions and has different leave entitlements, sick pay entitlements, allowances, and deductions. In many countries, Pat's situation is further complicated with the calculation of taxes and other statutory deductions.

Traditionally, managing employees who worked in two positions within the company was a nightmare for HR departments. For example:

• How do you manage the process when an employee leaves one of her jobs, but not the other?
• How can you ensure you keep employee data in sync without having to enter everything twice (or more)?
• How do you process back-dated tax code changes, potentially affecting both payroll processes?
• How can you process an employee on a weekly and a monthly payroll and ensure his tax is correct?

Being able to employ existing employees on concurrent employment contracts can be extremely beneficial to the company. First, you already know the employee and her performance and capabilities, so there isn't as much risk as hiring a new employee. Furthermore, by keeping an employee as two separate concurrent contracts, she is likely to be considerably cheaper to your company than one full-time employee. With all the traditionally more lucrative (and costly) entitlements and benefits that full-time employees receive, using Concurrent Employment just makes sense.

The Concurrent Employment component delivers a framework to support business processes that covers all the key areas, such as personnel administration, benefits, time management, payroll, and reporting. This article looks at the key areas in Concurrent Employment, including:

• The central person
• Grouping of personnel assignments
• Processing benefits
• Processing in Time Management
• Processing in Payroll

The Central Person

The key to Concurrent Employment is allowing an employee to have multiple records within the system. Traditionally, maintaining multiple records for single employees within an HR system was avoided because of the inevitable issues related to keeping them in sync. These situations usually include employees with different personal details, such as names, addresses, and emergency contacts. An even worse issue was the possibility of incorrect tax calculations and errors with Social Security and benefits contributions because two separate records have to be constantly maintained.

Concurrent Employment overcomes these issues by using what is known as a central person, which is the initial or main employee record. The central person is the key record for the employee's data and stored in infotype 0712 (main personnel assignment). Here, the key personal information, such as employee name, address, national identification, family details, and emergency contacts, is centrally stored and thus maintained only once.

All subsequent employee records are linked to this central person record and kept connected and in sync as a result. Each employee record has its own employee number. All the required information relating to a person's employment is stored on an individual record. Table 1 helps illustrate this concept:

Each record shows different start dates, positions and jobs, managers and supervisors, payments and deductions, and even different bank accounts, if required. Despite these differences, both records are linked through the central employee number and administrators can quickly switch between the employees records to facilitate effective maintenance.

Recording multiple linked records means that if Pat chooses to leave one of her jobs, the inactive employment record can be terminated while the other record remains active. Of course, depending on your company's requirements, an employee may have even more active records than just the two illustrated above. Concurrent Employment can handle as many assignments as your company and your employees require.

If the unique record used as the central person record is terminated, then a subsequent record takes over as the central person. When HR administrators attempt to hire an employee who is already active within the system, the system uses key information, such as name, date of birth, and national identification number, to match the new hire to an existing personnel record. Once matched, the administrator can speed up the hiring process, reduce the chance of keying errors by copying the data previously assigned to the employee, and assign it to the new employee record.

Grouping of Personnel Assignments

In larger companies and government organizations, it is common for an employee to work within the company in roles spread across several different legal entities. In most countries, employment within a legal entity must be reported at a legal entity level. For example, if your company is divided into separate legal entities for its manufacturing and sales operations, and an employee worked in both, he would normally have to be reported at the end of the year as individually employed by both entities. Concurrent Employment uses a solution called grouping of personnel assignments to manage these scenarios.

You can use groupings of personnel assignments to divide and group your company's different offices, factories, and locations (both within a country and internationally) into logical groups with similar processing and reporting requirements. Once assigned, these groups provide decision-making and processing control points, allowing you to process and report on your employees across the entire company using the groups that you require. To illustrate, I'll give another hypothetical example of an employee who works for a local council. As shown in Table 2, the employee, Catherine Whitaker, has four part-time jobs and thus four personnel records:

Through the grouping of personnel assignments, multiple employment contracts in the separate legal entities (in the example in Table 2, the Department of Schools and the Department of Recreation) are processed, calculated, and reported together. Using groupings of personnel assignments, processing decisions and calculation rules can then be applied uniformly to different groups within your organization as you require.

This means that when the system processes the employee, it considers, computes, and collates the results for the employee based on the department, location, country, and legal entity they are working in at the time. At the end of the year, Catherine receives just two year-end income statements, one for each of the departments, and not one for each of her employment contracts. This ability to condense employment contracts is a great time saver.

Processing Benefits for Concurrent Employment

Many employee benefit entitlements are based on length of service or hours worked calculations that determine employee eligibility. The integration between Concurrent Employment and the benefits administration component means that employee eligibility for benefits can be calculated while accounting for multiple employment records.

A periodic report checks employee eligibility for benefits, such as health care entitlement or pension contributions, based on criteria such as actual hours worked or length of employment. When the report runs, the system checks each of the employee's records individually and, if required, checks the combined records to see if they qualify for the entitlement.

For example, consider a scenario in which entitlement to a medical care benefits plan is based on 200 hours of service over three months. The report counts the actual hours worked against all the employees' records for the period and flags the employee as entitled to the medical care. Every time the report runs, it recounts the actual hours worked by the employee and retains or removes the entitlement as required. The system guarantees accurate calculations because all data entered in the employee records has a time and date stamp on it. Similarly, when calculating benefits entitlements, you can configure the system so that it does not aggregate the data from all employee records, but counts each employment record individually.

Processing in Time Management

Managing and planning the working time for employees who have multiple employment contracts can be a processing and administration nightmare. This is especially true in terms of planning, coordinating, and evaluating working times to make sure employees are paid correctly. The integration among Concurrent Employment, Time Management, and Payroll takes away most of these time-consuming manual tasks and automates them through a set of processing rules and decision points. This processing capability, combined with the ability to set rules for specific combinations of employment scenarios through groupings, gives you the ability to manage complex employment arrangements and keep within employment laws and regulations.

You can enhance Time Management to cater to Concurrent Employment in the following specific areas:

Planning working times and availability: Concurrent Employment gives you the ability to plan and manage employees' working and shift times, taking into account all their work obligations on their different employment records. This means that employees are not double-booked for shifts or, even worse, missed completely. It also takes into account absences, such as sick days and holidays, to ensure that you always have a full view of your employee's availability and obligations.

Checking employment laws and regulations: In most countries, the laws regarding maximum and minimum working times, the duration of breaks and down times, and the control of overtime are set at an employee level rather than a contract level. Concurrent Employment allows you to monitor and control your employees' working time across all their employment contracts.

Managing absence and attendance quotas: Controlling how much leave, sick leave, and attendance entitlements an employee with multiple contracts is allowed is always a complex issue. With Concurrent Employment you can set rules controlling the accrual of leave entitlement, thus ensuring that employees always have the correct entitlement based on their combined employment contracts. For example, this allows you to assign, deduct, and control quotas for sick leave or vacation in all an employee's contracts rather than each contract individually.

Calculating and valuating payments: The rules for the calculation and valuation of payments, such as overtime and shift allowances, are often controlled by a union at the state level. Trying to apply these rules to employees with multiple contracts to determine which contracts count towards them and how they should be paid can be a real challenge. For example, if overtime should be paid after eight hours of work, which contracts should count towards these eight hours? Which specific contract should the overtime be based on? Concurrent Employment uses the full processing power of the Time Evaluation and Payroll components to ensure that all your processing requirements can be defined and automated for efficiency.

The rules that define employment laws and regulations, quota accrual rules and balances, and the checks and error messages that you need to monitor your time management are defined in Time Evaluation Business Subjects, which are set up in the Time Evaluation section of the IMG by Time Evaluation specialists. These are used to define the rules for your company and decide how they are computed, checked, and calculated. The system assigns them to your personnel assignment groupings, which can then apply or ignore the rules for different employment contracts. All this information is fed through to Payroll, where it is processed and paid to the employee.

Processing in Payroll

The processing of concurrently employed persons using Payroll can be difficult to understand, thanks in large part to the amazing array of processing possibilities in this component. These possibilities are probably best illustrated through a specific example, so I'll use Catherine Whitaker, whose case I used earlier to explain the payroll process. Table 3 shows Catherine's vital payroll details.

Catherine works in three different payroll periods — one monthly and two different weekly payrolls. Concurrent Employment processes employee records that are within the same period and the same grouping of personnel assignment in synchronization.

Even though Catherine works for two different schools as a teacher, she is only employed by one legal entity. Because both payroll periods for her two teaching jobs are the same, she can have both these employments processed by payroll in synchronization. This means that she receives only one pay slip at the end of the payroll runs. For Catherine's two other employments, the dates of the payroll periods are different. Therefore, she must be run through both payrolls separately; however, because they are both within one grouping of personnel assignments, she has only one pay slip generated for two positions.

From a payroll perspective, the integration between the different positions is necessary for the correct calculation and collection of taxes and deductions. For example, if the employee is obliged to pay National Insurance contributions based on her earnings, it is necessary to add up all her earnings across the three different payrolls to ensure that her contributions are correct. This is further complicated by the fact that she is on both monthly and weekly payrolls. The calculations need to take all these factors into account to work out the right figures.

Another issue that frequently arises is a retroactive adjustment. For example, imagine that Catherine got a back- dated pay bonus on one of her jobs. This increase in taxable pay and the net increase in pay would be automatically calculated and brought into the current period by the payroll system. If the bonus moved her into a higher tax bracket, then all her other employments in previous periods must also be considered to ensure that her payroll results are correct.

If you imagine other possible scenarios, such as back-dated periods of unpaid leave or back-dated hourly rate increases, you can see that you need a well developed and robust solution. The Concurrent Employment component automatically handles all these processes. No matter how complex the employment assignments are, you can be sure that your employees' pay is correct and that they are paying the right taxes and deductions. It also automatically handles the processing of payments to employees through bank transfers or check payments, as well as sending the resulting postings to finance for payroll data.

Greg Newman

Greg Newman is originally from New Zealand, and has been implementing and supporting HR and Payroll systems since 1999. He has worked on numerous SAP HR and Payroll implementations for Great Britain, the Republic of Ireland, Australia, New Zealand, and several other international rollouts. Currently Greg is a managing consultant working for Newhit HR and Payroll Solutions in England.

You may contact the author at greg.newman@saphr.com.

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