Oracle Fusion HCM :: Employment Model (Explained)

Oracle Fusion HCM introduced Employment Terms (ET) as a unique layer in the Employment Model that did not exist in Oracle EBS. This provides added flexibility and standardisation in managing complex global employment structures.

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1. What Are Employment Terms?

Employment Terms are the shared container of employment attributes that apply across multiple assignments within the same work relationship.

They sit between the Work Relationship and the Assignment:

Person → Work Relationship → Employment Terms → Assignments

Employment Terms store information that is common across several assignments, such as:

• Business Unit

• Legal Employer

• Job / Position

• Grade / Grade Ladder

• Full-time or part-time flag

• Working hours

• Assignment category

• People group

Assignments linked to the same Employment Terms automatically inherit these values.

Advantages of Using Employment Terms

✓ 1. Reduces duplication & enforces consistency

If a worker has multiple assignments under the same work relationship, shared info is entered once at the Employment Terms level. All linked assignments inherit it.

Examples:

• Job

• Business Unit

• Working hours

• Grade ladder

✓ 2. Centralized control with optional restrictions

Administrators can decide whether assignments can override inherited values:

• If overrides are allowed → assignments can modify inherited fields

• If overrides are prevented → only Employment Terms can be edited

This ensures consistent HR data and compliance across multiple assignments.

✓ 3. Simplifies maintenance

Change a value at the Employment Terms level, and the system updates all associated assignments automatically.

✓ 4. Perfect for employees with multiple similar assignments

Example:
A professor with multiple teaching assignments, but the same business unit, working hours, and job category.

Employment Models in Fusion (Where Employment Terms Fit In)

Oracle Fusion supports three employment models, one of which uses Employment Terms:

1. Single Assignment Model

• One work relationship → one assignment

• No employment terms

2. Multiple Assignment Model (without Employment Terms)

• One work relationship → multiple assignments

• No shared Employment Terms layer

• Assignment values are independent

3. Employment Terms + Assignments Model  (Most Common for Global Orgs)

• One work relationship → one set of employment terms → multiple assignments

• Assignments inherit attributes from Employment Terms

This is the model that utilises Employment Terms to maximise efficiency and consistency.

1. Person Record (Global Person)

• A single person record is created for anyone in the system.

• This record holds:

  • Name, date of birth, gender

  • Contact info

  • National IDs

  • Addresses

  • Biographical information

👉 One person record can have multiple work relationships (e.g., employee + contingent worker).

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2. Work Relationship

A work relationship represents the legal connection between the person and the legal employer.

Types of work relationships:

1. Employee

2. Contingent Worker

3. Nonworker

4. Pending Worker (converted to Employee later)

A person can have multiple Work Relationships, such as:

• Employee of Legal Employer A

• Contingent Worker for Legal Employer B

Each Work Relationship contains:

• Legal Employer

• Start/end dates

• Worker type

• Associated assignments (one or more)

👉 Payroll Relationship is created at this level (one per legal employer).

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3. Assignment

The assignment is the core record that determines how a person works inside the organization.

Each Work Relationship must have at least one Assignment.

An assignment captures:

• Business Unit

• Job, Position

• Grade, Ladder

• Department

• Location

• Manager

• Work Schedule

• Payroll

• Payment methods

• Time & Absence eligibility

Types of assignments:

• Primary Assignment

• Secondary / Additional Assignments
  (e.g., dual employment, multiple roles)

Assignments drive:

• Security profiles

• Approvals

• Org hierarchy

• Time & Labor

• Payroll

• Benefits & Absences

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4. Payroll Relationship (within the Employment Model)

When a Work Relationship is created, Fusion automatically creates a Payroll Relationship for payroll processing.

Payroll Relationship holds:

• TRU association

• Calculation Cards (e.g., Tax Withholding, Garnishments)

• Payroll period and payroll definition link

• Element entries at relationship level

👉 All assignments under the same legal employer belong to one payroll relationship.

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5. Element Entry Levels

The employment model determines how payroll elements attach:

Payroll Relationship Level

• Taxes

• Benefits

• Court orders

• Other person-level deductions

Assignment Level

• Earnings

• Allowances

• Supplemental payments

• Overtime

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6. Employment Model Behaviors

Multiple Assignments

Users can create:

• One primary assignment

• Multiple secondary assignments
  Each with its own job, BU, department, and payroll eligibility.

Global Transfer / Legal Employer Change

Triggers a new Work Relationship:

• Old assignment is end-dated

• New Work Relationship + Assignment created

• Person record stays the same

Global Temporary Assignment

Creates a temporary assignment while keeping the original one active.

Work Relationship Termination

Ends all related assignments and payroll relationships.

Assignment Status Values:

• Active

• Suspended

• Inactive

• Accepted

• Pending Worker

• Offered

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7. Employment Model Summary Diagram (Text Version)

(If you want a visual image/diagram, I can generate it next.)

Person Record (Global Person)
        │
        ├── Work Relationship (Employee → Legal Employer A)
        │          │
        │          └── Assignment 1 (Primary)
        │          └── Assignment 2 (Secondary)
        │
        └── Work Relationship (Contingent → Legal Employer B)
                   │
                   └── Assignment 1 (Primary)