A lot of companies follow the practice of having employee’s work from one location – referred to as Work Location – and process their payroll from a different location – Office Location (can also be thought of as Payroll Location). In India payroll rules vary across locations and hence it is important to keep a track of Office Locations and transfers across these. This complexity gets multiplied when have scenarios of multiple companies in one group and some companies might have offices across countries which have different payroll rules.
Key points which have been considered while configuring the system are -
1. In one company you can run payroll for only for one country. By default it
would be the same as the country which is given in the address of the company
while creating it in the application - refer article.
2. Locations can be created for any city / country and mapped to a company and these locations made as the Office locations or Work Locations. But if payroll module is in use then Office Location can only be in the same country as the country of the Company, so if we create an ABC Company and map it to India payroll we can still create locations like London but cannot make it an Office location for Regular employees.
Transfers across locations and companies are handled in the application through
the following processes
1. Employee is going on temporary transfer to this new location and will continue
to get his salary and will be still earmarked as an employee of his existing
location / company.
How to manage – Change his Work Location. So his office timings
(for attendance) and time-zone will get changed but there will be no impact on
payroll.
2. Employee is getting permanently transferred to this new location but within
the same company. There are four sub scenarios
a. He was mapped to an Office Location with active payroll and the new location
is within the same country – the system will automatically update the new payroll
when the location transfer is made effective, in case of India payroll the system
will also add / remove Professional Tax or Labor Welfare Fund if it is different
between the two locations in payroll run but if LWF Employer contribution is
part of your CTC then you will have change salary structure manually
b. He was mapped to an Office Location with active payroll and the new location
not in the same country – this transfer is not allowed – system will stop it
c. He was mapped to an Office Location without an active payroll and the new
location is with an active payroll – the system will allow the payroll to be
activated with the first payroll month as being the effective month of transfer
to new location
d. He was mapped to an Office Location without active payroll and the new
location is also without an active payroll – there is no difficulty and it is
a simple location to location transfer
How to manage – Since this is an intra company transfer we are
not going to use the Inter Company Transfer process. The HR Manager can
update the location directly - refer to the article on "Managing Location Transfer" for more details. The system only allows end of month transfers since the compliance
across states in India in different and middle of month transfers creates issues.
3. Employee is getting permanently transferred to a new company – in which case
his resignation will be processed in Company 1 and new record with same or different
employee code will be created in Company 2.
How to manage – Use the "Inter Company Transfer" process.
Some scenarios which are not allowed are -
1. Employee is going on temporary transfer to a new company and will continue
to get his salary and will be still earmarked as an employee of company1
2. Employee is going on a temporary transfer and will get salary from new company
/ country / location but since this transfer is temporary his salary records
in his first company / country / location will not be closed but only put on
hold and will be revived when he is back.