Setting Up Profit Sharing

This chapter provides an overview of profit-sharing agreements and discusses how to:

• Define agreement groups.

• Set up variables and formulas.

• Set up agreements.

• Set up reference periods.

• Set up workflow for profit sharing.

Note. This chapter is required. You must complete the tasks discussed in this chapter to implement the Manage French Profit Sharing business process.

Understanding Profit-Sharing Agreements

The first step in the profit-sharing business process is to define your organization's agreements. You can manage two types of agreement, each with different rules:

• Worker's participation agreements (intéressement des salariés).

• Profit-sharing agreements (participation aux résultats).

You can create both agreement types using the same Define Agreement (WP_AGREEMENT) component. This diagram shows the steps in creating an agreement:

Process for setting up agreements

Note. Each step is covered in detail in this chapter.

Defining Agreement Groups

To define agreement groups, use the Agreement Group component (WP_AGREEMENT_GROUP). This section discusses how to define agreement groups.

Agreements can apply to a single company or a group of companies and establishments.

Page Used to Define Agreement Groups

Defining Agreement Groups

Access the Agreement Group page (Set Up HRMS, Product Related, Compensation, Profit Sharing FRA, Agreement Group, Agreement Group).

Include Company

Include Establishment

Exclude Establishment

Setting Up Variables and Formulas

To set up formulas, use the Agreement Variables component (WP_VARIABLE) and the Agreement Formulas component (WP_FORMULA). This section provides overviews of formulas and variables required for profit sharing and discusses how to:

• Define variables for profit-sharing formulas.

• Set up formulas.

Understanding Formulas

Profit-sharing processes use formulas that you specify in the agreement to calculate the global fund amount and employees' individual funds. To offer flexibility in defining calculations, formulas vary from simple formulas in which you assign a variable to the formula to more complex situations in which you take values from fields in the database to use in the calculation.

When you create an agreement, define formulas that calculate the following values:

• Global fund.

  PeopleSoft provides the legal formula for profit sharing agreement types; worker's participation agreements don't have a legal formula.

• Global fund limit.

  This is an optional formula that defines the maximum or minimum global fund amount. PeopleSoft delivers formulas to calculate this amount for profit-sharing and worker's participation agreements.

• Individual salary limit.

  This optional formula is used in the distribution calculation where the global fund amount is shared according to employees' salaries. The formula defines the maximum salary amount used in this calculation.

• Individual allocation limit.

  This optional formula defines the maximum amount received by any employee.

If a formula references variables with a type of Monetary, the formula is assigned the same currency code. However, when the system resolves a formula, all amounts are converted to the currency specified in the agreement definition. All profit-sharing pages and reports use this currency.

Understanding Variables

Variables store monetary and other numeric values that are used in the profit-sharing formulas. Use variables to:

• Provide one of the values used in a formula.

• Assign a value to the formula directly.

  For some agreements, a formula may be calculated outside the system and the final result entered into the system. To do this, define the variable and assign it to the relevant formula. For each reference period, update the variable with the calculated value before running the calculation processes.

You must define variables, using the Agreement Variables page, before you can use them in formulas.

Note. You must assign values to variables before you run the processes for a new reference period.

Pages Used to Set Up Variables and Formulas

Defining Variables for Profit-Sharing Formulas

Access the Agreement Variables page (Set Up HRMS, Product Related, Compensation, Profit Sharing FRA, Agreement Variables, Agreement Variables).

Variable ID	Identifies the variable. PeopleSoft delivers the following variables that are used in the statutory formulas: KFBC: Account Net Income (bénéfice net comptable). KFBF: Fiscal Net Income (bénéfice net fiscal). Refer to French legal report 2058-A line XN. KFC: Capital (capitaux propres) as defined by French labor laws (code du travail). KFCAN: Revenue for current reference period. This is optional and is used for profit-sharing agreements only. KFCAN-1: Revenue for the previous reference period. This is optional and is used for profit-sharing agreements only. KFCRDS: Rate for CRDS (contribution au remboursement de la dette sociale) contributions. PeopleSoft delivers the values for this variable as system data. KFCSG: Rate for CSG (contribution sociale généralisée) contributions. PeopleSoft delivers the values for this variable as system data. KFIMMED: Limit for immediate payment of funds. This is for profit-sharing agreements only. When an employee's profit-sharing amount is below this limit, the employee is entitled to receive the amount immediately. PeopleSoft delivers the values for this variable as system data. KFMS: Total Payroll (masse salariale). This variable is used for worker's participation agreements only. It is used by the formula KF20PCTMS to determine whether the global fund is more than 20 percent of the total salaries. The Distribute Global Funds process also uses the variable to determine the total salary to use for distributing funds based on salary. Note. If you want the global fund limit formula (KF20PCTMS) and the Distribute Global Funds process to be based on different totals, define the KFMS variable for the process and create a new global fund limit formula for your worker's participation agreement which doesn't reference the KFMS variable. KFS: Total of salaries used in the legal profit sharing global fund formula. KFSOC: Social Contribution of 2 percent paid on interest payments. PeopleSoft delivers the values for this variable as system data. KFSSLIMIT: Social Security contribution limit used in limit formulas such as the Individual Allocation Limit formula. PeopleSoft delivers the values for this variable as system data. KFVA: Added Value (valeur ajoutée) as defined by French labor laws.
Value Scope and Scope Reference	Defines the scope of the variable. You can define a variable with more than one scope if you want to use the same variable name but assign it different values depending on the scope. Values include: Global: The variable applies to all employees and all agreements. An example of a global variable is the Social Security contribution limit variable, which varies over time but is the same for all employees. The Scope Reference field is not displayed for global variables. Company: The variable applies to a specific company. For example, the value of the Net Income variable is different for each company. Select the company in the Scope Reference field. Agreement Group: The variable applies to all companies or establishments within an agreement group. Select the agreement group in the Scope Reference field. Establishment: The variable applies to an establishment that you select in the Scope Reference field. Work Unit: The variable applies to a work unit that you select in the Scope Reference field. Work units are created using the group build feature. When the system processes a formula, it looks for the variable that is appropriate for the agreement. It's important that you define the scope correctly. Otherwise, the system may not find the variable or may retrieve the wrong value. For example, if you set up a profit-sharing agreement for an agreement group, the system searches for a variable with a scope of Agreement Group and if it doesn't find one, it looks for a variable with a scope of Global. If you define the variable scope as Company, the system does not find the variable. For worker's participation agreements you can define calculations at the agreement level, establishment level, or work unit level. For such formulas, the system searches for a variable defined for that establishment or work unit, and if it doesn't find one, it looks for a global variable of the same name. See Defining Agreement Calculations.
Type	Select Monetary or Numeric. If you select Monetary, select the corresponding Currency.
Prorate	Select if the variable is prorated for reference periods of less than a year. For example, if a variable stores an annual limit, but you have set up a reference period of 3 months, select this check box to use a prorated value in the calculations.

See Also

Setting Up and Working with Group Definitions

Understanding the Distribute Global Funds Application Engine Process (HR_WP_SHARE)

Setting Up Formulas

Access the Agreement Formulas page (Set Up HRMS, Product Related, Compensation, Profit Sharing FRA, Agreement Formulas, Agreement Formulas).

Formula ID	Identifies the formula. PeopleSoft delivers statutory formulas for the Manage French Profit Sharing business process, and technical formulas that are called by the processes. Here is a list of the statutory formulas: LEGAL_RSP: Legal funding formula that calculates the global fund for profit-sharing agreements. LEGAL_MAX1, LEGAL_MAX2, LEGAL_MAX3, and LEGAL_MAX4: Global fund limit formulas for profit-sharing agreements. KF20PCTMS: Global fund limit formula for worker's participation agreements. This formula uses the KFMS variable to check that the global fund is not more than 20 percent of total payroll. 1/2SSLIMIT: Individual allocation fund formula that is equivalent to half the annual social security ceiling. 3/4SSLIMIT: Individual allocation fund formula that is equivalent to three quarters of the annual social security ceiling. 4SSLIMIT: Individual salary limit formula that is equivalent to four times the annual social security ceiling. Note. Other delivered formulas are technical and called from the profit sharing processes.
Operand	Select an operand and click the Refresh button. The Operand that you select determines the other fields that are hidden or displayed on the page. Values include: Constant: Represents a fixed value. Enter a percentage or other fixed amount in the Value/Record field. Rate Code: Refers to a Rate Code that you specify from the Rate Code table. Select a rate code in the Rate Code field. Rec. Field (Record, Field Name): Refers to a field you specify from a record. Select the record and field in the Record, Field Name field. You can select from the following records: EMPLOYMENT, JOB, PERS_DATA_EFFDT, or SAL_GRADE_TBL. Variable: Refers to a variable that you specify. In the Variable field, select from the variables that you defined on the Agreement Variables page. For some agreements, a formula may be calculated outside the system and the final result entered into the system. To do this, define the variable and assign it to the relevant formula.
View Formula	Click to view a plain text version of the formula.
Comments	Click to access the Formula Comments page where you can enter comments about the formula. When employees view the global fund formula the system displays the text you enter on the Formula Comments page. Therefore you should enter comments that help employees understand the global fund calculation. See the comments delivered with the LEGAL_RSP formula for an example of how to use the Formula Comments page.
Save	Click to save the formula. The system checks the syntax and displays an error message if there are missing fields or brackets.

Setting Up Agreements

To set up agreements, use the Define Agreement component (WP_AGREEMENT). This section lists prerequisites, common elements, and discusses how to:

• Define agreements.

• Define agreement calculations.

• Define investment methods.

• Define company investment details.

• Define company savings account details.

• Define company stock details.

Prerequisites

Before you can set up agreements you must define the following:

• Variables and formulas for global fund calculations.

• (Optional) Agreement groups if your agreement is for a group of companies or establishments.

See Also

Setting Up Variables and Formulas

Defining Agreement Groups

Common Elements Used in This Section

Pages Used to Set Up Agreements

Defining Agreements

Access the Agreement page (Set Up HRMS, Product Related, Compensation, Profit Sharing FRA, Define Agreement, Agreement).

Agreement Type	Select Profit Sharing or Worker's Participation. The system hides or displays fields depending on the agreement type you select.
Agreement Status	Select a status. Values are: Construction in Progress: Denotes an agreement that is under discussion and not yet agreed. Employees can't view details of agreements with this status. Approved: Denotes an agreement that has been signed by all relevant organizations. Employees can view and adjust details of agreements with an Approved status. On Hold: Denotes an agreement that has been started but is not in use. Use this status if, for example, an agreement is rejected by an organization that is involved in the discussion process. Employees can't view details of agreements with this status.
Approval Date	Enter the date when the agreement was signed. Normally, agreement approved within one year of the reference period end date. If this date is passed, legal requirements can affect the definition of some fields in the agreement. The system checks the Approval Date and issues a warning message if it is more than a year after the reference period end date. However, the system does not change the agreement definition. Update the agreement, if necessary, to meet the legal requirements. This field appears only if you select Approved in the Agreement Status field.
Unavailability Duration	Enter the number of days, months, or years after the reference period end date that profit sharing funds are unavailable to employees. This field determines the availability and payment date for funds. This field appears only if you select Profit Sharing in the Agreement Type field.
Agreement Start Date	Enter the date when the agreement is effective.
Agreement End Date	Enter the date on which the agreement expires. This field appears only if you select Determined in Agreement Duration.
Attach Agreement Document	Click to attach the agreement document to the agreement. The system displays a search page on which you enter the document path and file name or browse for the document. When the agreement is approved, employees can view the attachment online.

Agreement Duration

Complete this group box for profit-sharing agreements only. For worker's participation agreements the duration is set to Determined by the system and can't be changed.

Agreement Scope

See Also

Defining Agreement Groups

Defining Agreement Calculations

Access the Computation page (Set Up HRMS, Product Related, Compensation, Profit Sharing FRA, Define Agreement, Computation).

Eligibility Criteria

Profit-Sharing Computation

Use this group box to define the formulas that are used to calculate the funding and distribution for the agreement. Define formulas on the Agreement Formulas page.

Distribution Method

This group box defines how the global fund is distributed. Enter percentages of up to 2 decimal places. If you are setting up a worker's participation agreement, you can define different distribution methods at the agreement, establishment, or work unit level.

You can divide the global fund between employees based on one or more of the criteria described below:

You can use a mixture of all these methods to calculate the final profit share amount. Consider the following example:

For an employee with an annual salary of 15000 EUR and 100 days worked, the employee's fund is calculated as follows:

Note. The example shown assumes that the salary does not exceed the individual salary limit and is not prorated.

Defining Investment Methods

Access the Investment page (Set Up HRMS, Product Related, Compensation, Profit Sharing FRA, Define Agreement, Investment).

Proposed Investments

Profit Sharing Surplus

A surplus may occur when some funds remain after the initial distribution is calculated, due to limit formulas being applied. Use this group box to specify how the system manages surplus amounts.

Interest Re-investment Option

This group box is for profit-sharing agreements with Company Investment selected as the investment method. Use it to specify how the interest earned on global funds is managed. Global funds accrue interest during the period that the funds are unavailable to employees. This period is defined on the Agreement page by the Unavailability Duration field.

Note. Employees can change this setting, using the Agreement Personalization component or the Agreement Personalization self-service transaction, when the agreement status is Approved.

See Also

Entering Bank Account Information

(FRA) Profit-Sharing Self-Service Transactions

Defining Company Investment Details

Access the Company Investment page (click the Details button on the Investment page with Company Investment selected as the investment method).

Interest Rate

Enter the interest rate (percent) for the company investment. Interest rates are effective-dated so that you can track interest rate history.

Defining Company Savings Account Details

Access the Company Savings Account page (click the Details button on the Investment page with Company Savings Account selected as the investment method).

Internal	Select if the company saving account is owned by your organization.
External	Select if the company savings account is managed by a different organization
Edit Address	Click this link to access the Edit Address page where you enter the address of the organization that manages the company saving account. The address information is included in the agreement profit sharing report and administrators use this information when transferring funds.

Defining Company Stock Details

Access the Company Stock page (click the Details button on the Investment page with Company Stock selected as the investment method).

Ticker Symbol	Enter the symbol used for your company's stock.
Attribution	Select if employees receive company stock from the investment.
Subscription	Select if the investment provides employees with the right to buy company stock.

Setting Up Reference Periods

To set up reference periods, use the Reference Period component (WP_AGRT_PERIOD). This section provides overviews of reference periods and payroll information and discusses how to:

• Set up reference periods.

• Define payroll mapping.

Understanding Reference Periods

Profit sharing calculations are based on company or establishment accounting data over a period known as a reference period. Typically, reference periods are for a year and match the fiscal year. However, you can create reference periods for any period to suit your organizational requirements.

At the end of the reference period, when company information is available and employee salaries are finalized, the administrator schedules the profit sharing processes to calculate and distribute the global fund.

Agreements can cover one or more reference periods, depending on the agreement type and the agreement setup:

• Worker's participation agreements (intéressement des salariés) are typically for three years.

  If the reference period is a year, you create three reference periods, one for each year. However, if the reference period is three months, you define 12 reference periods for the agreement (4 reference periods a year * 3 years).

• Profit-sharing agreements (participation aux résultats) can have a fixed duration or an unspecified duration.

  If the duration is not defined, the administrator can create any number of reference periods.

You set up reference periods for an agreement only after the agreement is signed by all the relevant groups and the status is set to Approved.

To define reference periods for an agreement, you need to:

• Define how the Manage Profit Sharing business process imports information from your payroll system.

  This is defined for each reference period. The distribution calculations require employee payroll information, which is imported when the Extract Eligible Employees process runs.

• (Optional) Define the Carry Forward and Carry Over amounts for each reference period.

  This applies to profit-sharing agreements only. When part of the global fund remains after distribution to employees, you can specify that the surplus is added to the fund for the next reference period. Equally, a surplus in the previous reference period can result in an amount being added to the current reference period. These values are automatically calculated by the system, but you can override the calculated values before running the remaining processes.

Understanding How to Set Up Payroll Information

This section discusses:

• Importing data from PeopleSoft Enterprise Global Payroll for France.

• Importing data from other payroll systems.

When you set up a reference period, you must define where employee payroll information is stored because this is required for distributing the global fund.

The amount that an employee receives from profit sharing can be based on one or more of these parameters:

• Gross salary.

• Days worked in the reference period.

• Number of eligible employees.

For the Distribute Global Funds process to calculate the profit share based on salary and days worked, it requires each employee's gross salary and total days worked during the reference period.

These values must take into account absences. Generally, absences reduce the employees' gross salary and the total working days for the period. However, the following types of absence must not be deducted from the employees' total working days count and their gross salary amount:

• Paid vacations.

• Maternity leave.

• Adoption leave.

• Work accidents (except accidents that occur on journey between home and workplace).

• Absence due to occupational illness (maladie professionnelle).

The gross salary includes all compensation and benefits, before contributions such as the social security contribution and retirement contribution are deducted.

See Defining Agreement Calculations.

This payroll information is imported from one of two sources:

• Global Payroll for France.

• A record in the database that has been populated from other payroll systems.

The system checks the employee's job data, as of the reference period end date, to determine which source to use for the import. If the Payroll System field on the Job Data - Payroll page is Global Payroll, the system imports from Global Payroll for France. If the Payroll field is set to any other value, the system imports from a record in the database.

Importing Data from Global Payroll for France

PeopleSoft provides the following elements in Global Payroll for France for use with the Manage French Profit Sharing business process:

• Accumulators to track employees' gross salary for the reference period.

• Accumulators to track the number of days worked in the reference period.

• Earnings from profit share or worker's participation agreements.

The accumulators automatically include the paid absences that must be included in the salary and number of days worked. PeopleSoft delivers separate accumulators and earnings for profit sharing and worker's participation agreements to allow for agreements that are based on different data. However, if your agreements are based on the same employee payroll information, you can remove the unused accumulators from the section PAR SE PARTICIP. This section is used to trigger the calculation of the accumulators used for the profit-sharing distribution.

See Setting Up Sections.

Importing Data from Other Payroll Systems

If you don't have Global Payroll for France installed, you must populate a record in your database with employee payroll information. PeopleSoft delivers the record PS_WP_EXT_PAYDATA for this purpose.

The table below lists the fields in the PS_WP_EXT_PAYDATA record:

Pages Used to Set Up Reference Periods

Setting Up Reference Periods

Access the Reference Period page (Set Up HRMS, Product Related, Compensation, Profit Sharing FRA, Reference Period, Reference Period).

Reference Period	Enter the reference period ID. The system populates a reference period ID that you can override.
From Date and Thru Date	Enter the period start and end dates. The system automatically populates these dates based on the agreement approval date or the dates of existing reference periods. You can override these default dates. If you haven't created reference periods for the agreement, the system populates the date fields for the year previous to the approval date, as follows: From Date is set to January 1 of the year before the agreement approval date. Thru Date is set to December 31 of the year before the agreement approval date. The agreement approval date is defined on the Agreement page. If there are existing reference periods, the system populates the date fields starting the new reference period immediately after the end of the latest period with the same duration as the existing period.
Status	When you add the period initially, the system sets the status to Construction in progress and changes it to Computed when you run the Process Interest and Payment Application Engine process (HR_WP_PAYMT). After reviewing the profit sharing amounts calculated by the process, change the status to Approved. Once you set the status to Approved, you can't make other changes to the reference period. Note. Employees can view their fund information only when the reference period status is Approved.
Personalization Deadline	Enter the last date on which employees can change the investment method or interest reinvestment options using the Agreement Personalization component or the self-service transactions. After this date, employees cannot change these agreement settings and funds can be transferred to the financial organization specified or paid through your payroll system. If employees receive a payment or a transfer is completed before the personalization deadline, the system doesn't allow employees to update their agreement settings from this payment or transfer date. Note. If you don't define a date, the system automatically prevents employees updating their agreement settings once the first reference period is approved.
Payroll Map	Click this button to define the location of payroll information. Profit sharing calculations depend on data imported from your payroll system.

Carry Over Amount	This field shows the amount carried over from the previous reference period. The Compute Global Fund process adds this amount to the global fund calculated.
Carry Forward Amount	This field is for profit-sharing agreement types only. It shows the surplus amount that will be added to the global fund for the next reference period. This is calculated by the Distribute Global Funds process if you selected the Carryover option on the Investment page.

Defining Payroll Mapping

Access the Payroll Mapping page (click the Payroll Map button on the Reference Period page).

Use this page to define the location of payroll information that is required for profit sharing. If you make changes to this page after running the Extract Eligible Employees process, you must rerun the process to take account of the modifications. You can't make changes to this page once the reference period status is Approved.

Note. If your organization uses Global Payroll for France and other payroll systems, define both Global Payroll Mapping and External Payroll Mapping. If you define both group boxes, the system uses the Payroll System field in the employee's job data to determine which source to use for the import.

Global Payroll Mapping

The system displays this group box if you have Global Payroll for France installed.

External Payroll Mapping

If you use an external payroll system for some employees you must populate a record with payroll information required for the profit-sharing calculations.

See Also

Defining Agreement Calculations

Setting Up Workflow for Profit Sharing

PeopleSoft delivers workflow for the Manage French Profit Sharing business process that enables automatic notification of profit sharing events to employees and compensation administrators. This table lists the events that trigger workflow:

See Also

Understanding the Process Interest and Payment Application Engine Process (HR_WP_PAYMT)

Delivered Workflows for PeopleSoft HRMS