Oracle Contingent Worker setup

Contingent_worker_functionalities_in_R_12.doc Page 1 of 55
White paper on Contingent Worker Implementation
in R 12.0.4 presented at
OAUG Denver, Colorado
April 17, 2008
Presented by:
Anuradha Ravishankar, ACA
Ravi Shankar, FCA, PMP, PgMP
Protégé Software Services, Inc.
600 West Cummings Park, Suite 4300
Woburn 01801, MA
www.protege.com
aravishankar@protege.com
781 835 5501 Cell
781 305 8129 Office

Table of Contents
Executive Summary ................................................................................................................................... 3
Contingent Worker with Purchase Order Integration: ............................................................................ 4
Setup in Projects: ....................................................................................................................................... 5
Purchase Order Configurations:............................................................................................................... 8
Purchasing Profile Options:.................................................................................................................... 11
PO Line Type: .......................................................................................................................................... 13
Job Item Category Association:............................................................................................................... 14
Setting up Contingent Worker in HRMS:............................................................................................... 19
Creating the PO in Purchasing:.............................................................................................................. 25
Setting up OTL Preferences:................................................................................................................... 31
Time entry in OTL: .................................................................................................................................. 39
Creating Receipts in Purchasing:............................................................................................................ 44
Open related periods in PO & INV ......................................................................................................... 44
Transaction Import & Projects Costing:................................................................................................. 47
Payables Interface to Projects:................................................................................................................ 49
Other key information: ............................................................................................................................ 55
Lessons Learnt:........................................................................................................................................ 55
About the Author(s):................................................................................................................................ 55

Executive Summary
Contingent Worker functionality was introduced to the Oracle Human Resources application
with HRMS Family Pack E (11i.HR_PF.E). A contingent worker is a worker who does not have a
direct employment relationship with the organization. They are either self employed or provide
their services through an external staffing or placement agency. Payment for their services is
typically made to the agency that provides their services.
Contingent Labor functionalities in HR are integrated with Projects, Purchasing and OTL
application. The system treats the Contingent Labor, almost the same way, as it does
employees. They can be key members on the Project, enter time in Oracle Time and Labor,
manage projects and perform all approval and other executive actions that an employee
performs.
Contractual relationship, in the form of a purchase order, is created between the provider of
services for such contingent labor and the recipient. The purchase order would spell out the
terms and conditions on which the contingent labor’s services are provided. Contingent labor
would be setup in the HRMS system with the identification type of contingent labor. This
ensures that the system tracks and stores these records, different from the identification type
of Employee. In their assignment record, there would be a reference to the supplier’s name
and site that provides their services, and the PO number and line under which these services
are provided. At any given point of time, this assignment reference can be to only one
combination of PO Number and line.
Contingent Labor can enter their time in Oracle Time and Labor against specific projects and
tasks. System validates the projects to which they can charge time, based on the projects
referenced in the distribution of the PO. OTL Projects and Purchasing Layout provides for
entering the PO number and line. When the time in OTL is approved, receipts can be auto
created in Purchasing against the PO Line. This receipt facilitates three ways matching in
Payables, when the agency that provides their services sends the invoice.
Contingent Labor’s time can be costed using the PO line rate. Different configuration options
are supported to interface their labor hours into Projects and cost it using the PO line rate or
bring it from supplier invoices as supplier invoice costs.
Contingent workers can be converted to employees by terminating their placement and
creating new action of hiring them as employee. System links this action to the same record
and from the new effective date identifies the ex contingent labor as employee.
This paper covers some of the nuances around the setups, integration, etc of contingent labor
and focuses in particular their use in the Projects application.
.

Contingent Worker with Purchase Order Integration:
Contingent worker is a Contract / Temporary staff that is not an employee of the organization.
He renders services, along the lines of an employee, except his privity of contract is with the
external agency. To ensure that the system supports all standard functionalities for the
contingent labor, a new identification type “Contingent Labor” in HR is provided for.
Contingent workers will be setup in Core HRMS using this identification. Contingent workers
can enter time cards and expense reports against the Projects. For most of the Projects
processes, the contingent worker is treated similar to that of an Employee. Functionalities
supported cover the following business areas:
• Need to capture Contingent worker’s time through OTL.
• Approval functionalities in OTL through approval style.
• Auto creating of receipts in Purchasing for approved time in OTL.
• Payment made through an AP Invoice, matched to receipts in Purchasing.
• Control options to Interface Contingent worker’s Costs to Projects and later to
General Ledger from Projects.
• Transaction processing for costs through supplier invoices.
Current functionalities do not support the assignment of multiple combinations of PO number
and line to the contingent workers’ primary assignment. Multiple secondary assignments can
be created in HRMS for the contingent workers and in these secondary assignments, the new
or different PO Number and Line could be entered. Using this workaround, in OTL the
contingent worker can select the appropriate PO Number and Line and the system allows this
reference. Further, the projects that the user can enter in OTL time entry is validated based on
the projects referenced in the distribution window of the source PO Line.
System now fully supports approvals for contingent labor’s time using the functionalities of
approval style. Standard functionality that exists for supporting approvals by application and
by Project Manager, Supervisor, etc for Projects, Purchasing applications are now available for
approving contingent labor’s time.
The following enhancements to the functionalities are required to support this and other
related requirements.
• Support for multiple combination of PO number and Lines for the primary
assignment record. (Without the workaround to create multiple secondary
assignments).
• Validation for the First Name and Last Name field in the PO Line record when the
contingent labor PO is being entered, in the Temp Lab tab region.
• Auto creation of contingent labor employees as suppliers

• Support for contingent Workers to enter their expenses and get paid through
iexpense application.
While the functionalities that currently are available address many of the core business
requirements, the above enhancements are certainly needed for the effective use of the
system.
Setup in Projects:
To enable Contingent workers’ time to be imported from Oracle Time and Labor into Oracle
Projects, “Import Contingent Worker Timecards with Purchase Order Integration" check
box has to be enabled in the Expenditure/ Costing tab of the Implementation Options
window. This option enables the contingent workers to select a purchase order and line
when they enter their time in OTL. Further, the system would automatically read the PO
line’s rate for labor costing when the approved timecard is imported to Projects through
Transaction Import. When contingent labor’s time is imported to Projects from OTL, the
supplier invoice that is entered in Payables would not interface to Projects again and the
system flags these records as not being eligible for transfer to Projects. The GL accounting
and posting would happen through the supplier invoice transactions. It is very important to
not switch the Implementation Option flag in the midst of transaction processing, as this
would cause double accounting and potential data corruption errors.

Typically, the Contingent Labor’s costs would reside only in the Project Sub Ledger and not
transferred to the GL. If this is required, Contingent Worker Labor for Labor Cost Clearing
Auto Accounting Function Transaction has to be properly configured to ensure that the system
handles the relieving of this clearing account, with that used when the supplier invoice was
entered and posted in Payables. System supports the parameter of Person Type for the Labor
Cost, Burden Cost and Total Burdened Cost Accounting Functions and this can be effectively
used to create the proper accounting entries for labor costs for employees and contingent
workers.

System supports the definition and use of transaction controls for the contingent workers,
along the lines of employees. The Person Type field has Employee Only, Contractor Only
values that can be chosen to reference controls applicable for contingent workers.
Purchase Order Configurations:
Purchasing Application must be configured to ensure that the PO line could be properly
created for the contingent workers. These are for the following setups.
Setup Unit of Measure Class as Time
Setup Unit of Measure Time

Purchasing Profile Options:
The following site level profiles need to be enabled to support the functionalities:
PO: Enable Services Procurement – Yes
PO: UOM Class for Temp Labor Services – Time

PO Line Type:
Contingent Labor PO should be created using the Line type ‘Rate Based Temp Labor”. This
uses the purchase basis of Temp Labor.

Job Item Category Association:
To enter Purchase order Lines, we need either an item or item category and description. The
item category used in PO is the category set referenced for the Purchasing functional area.
Typically, based on the structure referenced for this category set, a combination of the
structure is created and used for the PO line of the contingent labor. This category structure is
then referenced to the Job created in HRMS that is referenced to the contingent labor’s
assignment. Optionally, a new Master Item for the Contingent Labor could be setup with the
expense type attribute and associated with the category.

The above screen shots explain the following:
Using the Inventory Category Set for Purchasing Functional Area
Using Item Categories Flexfield Structure for Inventory Category Set
Using a Structure combination of Contractor for this structure
Using seeded Job Group of HR_81 (to group a range of jobs)
Using HR Job of Contractor under this job group
Associating HR Job Contractor with the Contractor Structure value of Contractor

Setting up Contingent Worker in HRMS:
The following screen shots explain the setups for this. As mentioned above, contingent
workers need to be setup with the identification type of contingent worker and their
assignment referenced with the PO number and Line for the supplier that is providing their
services:

There are 3 assignments for the contingent worker, out of which only the first assignment
(assignment number 5) is Primary. In the secondary assignments (assignment numbers 5-2
and 5-3, respectively), different supplier name, PO Number and Line references are used and
the system supports this when the worker enters time in OTL.

Creating the PO in Purchasing:
Based on the setups and features mentioned above, PO Number 1007 and 1008 were created
for the contingent worker services. These PO are issued to 2 different suppliers (to
demonstrate the functionality that the system supports different suppliers, so long as the
contingent worker first and last name is same in HRMS)
System requires the entry of price and the amount field for the PO Line. Quantity field entry is
disabled for the PO line and shipment. Distribution window uses the amount as per the Line.

Setting up OTL Preferences:
Preference setups have to be properly configured in OTL Preference for the contingent labor
features. This includes the Timecard Layout, Approval Styles, alternate names (for associating
expenditure types with aliases), etc. (Alternate name functionality is supported only for
Projects and Purchasing layout and not for Projects Layout).The following screen shots
explains these setups:

Time entry in OTL:
Based on the above setups that are complete, the following screen shots show the time entry
and approval process in OTL:

The above notification is for the Project Manager approver for the Projects Application
referenced in the Approval Style.

The above notification is for the Supervisor of the Contingent Labor for the Purchasing
Application referenced in the Approval Style.

After this approval, the time card status for the Contingent Labor is now changed to Approved.
Creating Receipts in Purchasing:
To facilitate 3 way matching for the contingent labor’s time (time hours entered and approved
equals the quantity received in Purchasing and validated against the supplier invoice entry in
Payables), system supports functionality and provides for a process that needs to be run to
auto create the approved hours as receipt in Purchasing. This process is Retrieve Time from
OTL. This process also spawns off the Receiving Transaction Processor called by Retrieve Time
from OTL (Receiving Transaction Processor) and creates receipts in Purchasing Application.
Errors and exceptions, if any, should be resolved by running the Receiving Interface Errors
Report.
Open related periods in PO & INV
For this report to work correct, the Inventory Accounting (Cost) Period in Inventory and
Control Purchasing Period and Open and Close Period in Purchasing applications have to be
open.

The above receipt is created for the OTL approved hours * times the Rate used for the PO
Line ($122 * 30 hours entered in OTL)

The above receipt is created for the OTL approved hours * times the Rate used for the PO
Line ($110 * 10 hours entered in OTL)
Transaction Import & Projects Costing:
Approved timecards from OTL can be interfaced and costed in Projects application based on
the Implementation Options setup. System uses the Rate used in the PO Line for this.
Optionally, specific costing rate can be defined and used in the Labor Cost Override window.
Timecard interfaced to Projects and costed (with the optional interface of transfer to GL or
not) will not interface again from the Payables module when the supplier invoice is entered.
Standard process and functionalities for transaction import, distribute cost process,
expenditure inquiry, etc all apply for the contingent workers, along the lines of employees.

The above screenshot from Expenditure Inquiry All Window shows the time that is interfaced
to Projects for the 2 projects to which the Contingent worker charged in OTL under 2 PO
Numbers 1007 and 1008, respectively for the expenditure item dates 2/18/08 through
2/24/08. This aggregates 30 hours and $3,660 (30 * $122/Hr) for PO 1007 and 10 hours and
$1,110 (10*$110/Hr) for PO 1008, respectively.
Payables Interface to Projects:
System does not interface supplier invoices to Projects when the associated contingent
worker’s time is interfaced from OTL to Projects. If PO is entered for the contingent worker
and the Import Contingent Worker with Purchase Order Integration Flag in Projects is not
enabled, the system will interface the costs from Payables. The following screen shots explain
that the invoice for PO 1012 is interfaced to Projects while the invoice for PO 1007 was not, as
the corresponding time was interfaced to Projects through the implementation Option
configuration.
The system uses the combination of following setups in deciding if the supplier invoice should
be interfaced to Projects from Payables:
Import Contingent Worker with Purchase Order Integration Flag in Expenditure/Costing tab
of Implementation Options window in Projects.
Line type of Rate Based Temp Labor for PO Line.

The above supplier invoice is for 30 hours of OTL time already interfaced from OTL to Projects
and hence the system did not bring over to Projects again.

The above invoice was entered in Payables with the flag Import Contingent Worker with
Purchase Order Integration not checked. System interfaced the costs to Projects normally.
The following screen shot from Expenditure Inquiry window in Projects shows the costs for PO
1007 and 1012. Transaction source field indicates the source of cost capture.

Other key information:
• Contingent workers time can now be entered in Pre Approved Batches in Projects,
as well as in Time Keeper Windows in OTL, in addition to Self Serve Pages by the
worker himself.
• Contingent worker can enter their expenses in iExpense Application. However, the
invoice is created for the supplier associated with their Assignment record in HR.
• If Cost Rate Override window is used to define the cost rate for the contingent
worker, system uses this to cost in Projects when time is entered through Pre
Approved Batches. Otherwise, the rate associated with the PO Line is used.
• Continent worker’s Effectivity date for the placement and assignment should be after
the start date of the corresponding supplier record.
• WebADI Transaction Import does not distinguish between person types, and hence
does not recognize contingent workers. If you are planning on uploading a larger
volume of contingent worker expenses into Projects (e.g. data conversions) using
the Web ADI may not be the ideal solution.
Lessons Learnt:
Contingent workers functionality has evolved in the recent past and has been significantly
enhanced since the earlier releases. For all practical purposes, the system extends the
Employee related functionalities to Contingent Worker. This includes being a key member on
Projects, approving documents, entering time and expense, etc. This white paper’s content is
based on the authors’ experience of implementing the functionalities in prior releases and in
particular from the implementation of R 12 for the internal use of Protégé Software Services,
Inc.
About the Author(s):
Anu has specialized in the functional architecture of Oracle Projects and Financials Suite of
products. She holds a professional Accounting degree and has eighteen years’ experience in
the different business domains of finance, accounting, commercial operations and human
resources. She has implemented Projects Suite in R 11i and R 12.
Ravi has specialized in project management and functional architecture of Oracle Projects,
Financials, HRMS and supply chain Suite of products. He holds a professional Accounting
degree, and the coveted PMP and PgMP designations. He has twenty four years’ experience in
the different business domains of finance, accounting, commercial operations and human
resources and has extensively implemented and project managed Oracle Applications.

Oracle Contingent Worker setup

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