Understanding the Employment Model in Oracle HCM

The employment model in Oracle HCM consists of two main entities: Work Relationships and Work Assignments. This model can be configured at the enterprise level or at the legal employer level using the Manage Enterprise HCM Information and Manage Legal Entity HCM Information tasks in the Setup and Maintenance work area.

Types of Employment Models:

1. 2-Tier Models

• Assignment and Work Relationship:

  • Assignments always represent a legal entity level.
  • Work relationships exist at the enterprise level.

• Single Assignment:

  • An employee can have only one legal entity relationship at a time.
  • If an employee transfers between legal entities (e.g., from Company A to Company B), the GLOBAL TRANSFER option is used.
  • The assignment in Company A becomes inactive, and a new active assignment in Company B is created.

• Single Contract – Single Assignment:

  • A contract employee in Company A can become a permanent employee within the same company.
  • When a contract work relationship is created, a single assignment is automatically generated.

• Multiple Assignment:

  • Employees can have multiple active assignments at different legal entities.
  • Payroll is processed for both entities if the employee works in multiple organizations.

• Multiple Contracts – Single Assignment:

  • Employees can have multiple contracts with different companies, but each contract is linked to a single assignment.

2. 3-Tier Model

• Assignment, Work Relationship, and Work Term:
  • Work Relationship exists at the enterprise level.
  • Assignments and Work Terms exist at the legal entity level.
  • Work Terms provide additional details about assignments.

Selecting the Right Employment Model:

• By default, every enterprise uses the Single Assignment model.
• The employment model can be changed at the enterprise or legal employer level, but certain restrictions apply when switching between models.
• Use Manage Enterprise HCM Information and Manage Legal Entity HCM Information tasks to update the employment model based on business needs.

I hope this blog post was helpful for you. If you have any questions or feedback, please leave a comment below.