Have contributed to this article Dua’a Al-Hajjar and Senthil Kuppusamy with their technical expertise.

A common requirement in the MENA region is to compensate (or not) for employees’ absences based on certain sets of conditions. The International HCM solution can be used for that purpose.

For a glimpse of the coverage of the International HCM functionality, as well as how it can be configured to meet such a requirement, let’s take the following example scenario and walk through system customizing and payroll processing.

Example Scenario

At any given company, let’s assume that the following policy applies for sickness leaves:

Prerequisites

• Your payroll schema must contain the function RAB (Read absences) with parameter 3 (SPLQY – Split by quota) filled with value X:
• You have created your own absence type. For the purposes of this example, our absence type will be 9100.
• You have created three absence quota types and configured their base entitlement. In the example, we are using the following:
  

  Absence Quota Type	Base Entitlement	This is to cover days…
  90	15	0-15
  91	15	16-30
  92	20	31-50

Note: Here we are not covering all the customizing needed for the absence type and quotas, such as, for example, grouping of personnel subarea for absence type and time quota.

Customizing

To ensure the coverage that is needed by our scenario, we require the following customizing:

Step 1: Define Deduction Rule for Quota Types and Counting Rule

Now it is time to determine the deduction order of each quota type, as well as the counting rule to be used so that IT2001 records deduct the quotas in IT2006 records. Here are the settings that we have to do:

1. In Customizing for Time Management, choose Time Data Recording and Administration > Managing Time Accounts Using Attendance/Absence Quotas > Quota Deduction Using Attendances/Absences > Assign Deduction Rules to Counting Rules (view cluster VC_T556C).
2. From the dialog structure, select Deduction rules for absence quotas.
3. The settings made look like the following:Here, given that our scenario has a payout order (first 15 days are 100% paid and so on), we define that the deduction priority takes only the quota types into account.It means that the first 5 days (as defined in the previous step, the entitlement) from quota type 90 will be consumed, followed by 91 (until its 15 days are used up), and finally 92.
4. From the dialog structure, select Counting rule and create yours:
   

   
   As seen under Deduction rule, we properly map our deduction rule 61.

5. And then we map the counting rule to the absence type in Customizing for Time Management, go to Time Data Recording and Administration > Absences > Absence Catalog > Absence Counting > Assign Counting Rules to Absence Types (view V_554S_Q).

Step 2: Define Valuation Rules for Paid and Unpaid Absences

Now it is time to complete the payroll-relevant settings. We start with the valuation rules:

1. In Customizing for Payroll: International, choose Payroll: International > Absences > Create Counting Classes for Absence Valuation (view V_T554C).
2. From the pop-up of activities, select Absence Valuation: Expert View.
3. Our entries should look like the following:

   

   

Step 3: Map Valuation Rules to Absence Quota Types

Finally, we have to assign our valuation rules to the corresponding absence quota types. With that, during payroll, the system will apply the required valuation rule for the different quotas that each employee consumes.

Here are the steps:

1. In Customizing for Time Management, go to Time Data Recording and Administration > Managing Time Accounts Using Attendance/Absence Quotas > Processing Absence Quotas in Payroll > Valuation of Absences with Quota Deduction > Valuate Absences Using Quota Deduction (view V_T554A).
2. Then we make settings like the following:

Process (Master Data and Payroll)

Now that we have all the required settings in place, let’s take a look at what we should see as we proceed with master data creation and payroll runs.

For the purposes of this example, let us assume an employee with a base salary of 2,000.00 with no further deductions.

1. In PA30, we create an IT2006 (Absence Quota) record for a given employee:
2. Then we record an absence for the same employee in IT2001 (Absences):As seen, the period spans 46 calendar days, covering the three different types of the employee’s quota.
3. We then go back to the IT2006 record to see that the absence is correctly deducted from the employee’s quota:
4. Now we run payroll for that period. By looking at the AB table under the XNAB payroll function, we find the periods and corresponding valuation rules that are taken:From that table, we see that the system is taking the right rules for each particular situation that we wanted to cover
   

   From/To	Valuation Rule	Which stands for…
   01.03 to 15.03	05	100% paid leave
   16.03 to 30.03	08	50% paid leave
   01.04 to 15.04	07	Unpaid leave

   And here is the RT for this particular employee:

   

   Wage type /560 contains the payment amount of 1,451.61. Here is the breakdown for this:

   From/To	Valuation Rule	Calculated amount
   01.04 to 15.03	05	64.516 x 15 = 967.74
   16.03 to 30.03	08	32.258 x 15 = 483.87
   Total		967.7 + 483.87 = 1,451.61

   Daily rate: 2,000 / 31 = 64.51612903225806

5. Finally, we execute the subsequent payroll run:Here, wage type /560 contains the payment amount of 1,000.00. Here is the breakdown for this:
   

   From/To	Valuation Rule	Calculated amount
   01.03 to 15.04	07	0 x 15 = 0
   16.04 to 30.04	–	66.667 x 15 = 1,000.00
   Total		0 + 1,000.00 = 1,000.00

   Daily rate: 2,000 / 30 = 66.66666666666667