How Do I Set Up My Lawson Applications for Affiliate Employees?

Use the following information to set up your Lawson applications for affiliate employees.

Human Resources

You must define affiliate employees in the Lawson Human Resources application (on Employee (HR11.1)) to support salary encumbrance, labor distribution, effort reporting, and labor cost transfers.

You can establish affiliate employees in their own HR company, or in a separate process level in an existing HR company. If you use a separate HR company, it may be easier to keep the employee numbering scheme used by the affiliate organization, which saves time when you import transactions for labor distribution processing. The HR company requires its own setup, including process level and pay plans. If you use a separate process level in an existing HR company, make sure no affiliate employee numbers are duplicated with your existing employee numbers.

Whether you use a separate HR company or a separate process level, use these guidelines:

  • Define pay plans to support the frequency with which you process labor transactions from the affiliate organization. For example, the affiliate organization may pay its employees semi-monthly, but it may bill you for affiliate labor costs once a month.

  • Each affiliate employee's pay (pro-rated annual salary) should reflect the employee's current total gross pay, not the portion of the affiliate employee's pay chargeable to grants. This eliminates the need to manually update annual pay in the Lawson employee file to reflect what is chargeable to the grant recipient at any given time. This also eliminates the need to reverse-engineer template percentages to match current pay chargeable to the grant recipient.

  • Define one or more "affiliate" status codes to identify affiliate employees. To be eligible for salary encumbrance, the status code must be assigned to a payment status of Pay/Benefits (PB) or Pay/No Benefits (PN).

  • Select the appropriate settings in the Salary Encumbrance, Labor Distribution, and Effort Reporting fields in the employee record on Grant Management (HR11.3).

  • The HR company that houses the affiliate employees serves as the "from" company for setting up intercompany relationships in General Ledger. This is important because the from company triggers intercompany transactions when labor distribution is updated. How Do I Populate the Import File for Affiliate Employees?

General Ledger

Define a General Ledger (GL) company for the affiliate organization. The affiliate GL company houses transactions for affiliate employee pay that is not attributable to grants awarded to the grant recipient. Pay not attributable to grants should not impact the grant recipient's income statement. The GL company for the affiliate organization balances transactions for affiliate pay using a salary offset account.

Affiliate pay attributable to grants is charged to your GL company (as the grant recipient) and credited to a receivables account in the GL company you set up for the affiliate organization. To manage the postings between your GL company (as the grant recipient) and the affiliate GL company, define Intercompany Relationships (GL25).

The GL company for affiliate pay should contain at least one accounting unit. Consider the following accounts for the affiliate company's chart of accounts:

Account Purpose
Salary Due from Grant Recipient A receivable account defined on Intercompany Relationships (GL25.1); charged with portion of affiliate employee pay attributable to the grant recipient.
Affiliate Salary Expense An expense account charged with affiliate employee pay not attributable to the grant recipient.
Salary Offset A contra account used to balance entries for salary charged to the grant recipient or to the affiliate salary expense account.

Examples: Affiliate Payroll Posting

To minimize maintenance, define a company group that contains your GL company and the GL company for affiliate organization. Use the company group when you post General Ledger transactions on Journal Posting (GL190) and close the period on Period Close (GL199).

Grant Management

As with your employees, create and approve labor distribution templates for affiliate employees to support salary encumbrance, labor distribution processing, and effort reporting.

Because labor distribution templates are subject to change based on funding and personnel availability, Lawson recommends you base the percentages in an affiliate employee's labor distribution templates on the affiliate employee's gross pay. If the affiliate employee does not spend 100 percent of his or her time on a grant, the remainder of the template can be charged to a GL company and account for the affiliate company. If template percentages total less than 100 percent, the remaining pay will be charged to the GL account in the imported affiliate pay record.