Implement compensation for shorter working hours and compensation payments with SAP HCM

Darko Kopčić

May 13, 2020

Image of a smiling woman, computer screen SAP HCM, mountains in the background

3 tips for HR & IT professionals

The current Covid-19 pandemic has turned the lives of companies and employees upside down and is posing special challenges for HR departments. The German federal government has already passed extensive aid packages in the form of credits and compensation for shorter working hours. However, many SAP systems are not equipped for this. Our tips will show you what HR professionals should do.

Just a few weeks ago, nobody would have thought that what has become almost standard operating procedure today would be possible. Current figures show that half the companies in Germany have already applied for shorter working hours and many others are considering this step. This is already affecting an estimated four million people. Companies’ challenges also include employees’ illnesses, employment prohibitions, on through to official closing of the operation. Nevertheless, the federal government has not stood by idle. It has increased and improved the package that includes compensation for shorter working hours that was passed at the start of the pandemic: Compensation for shorter working hours will increase in scaled fashion up to 80% and for parents up to 87% of the wage losses they have suffered. Thus, much of the difference will be made up.

HR departments are now confronting the question of how they can correctly handle the oncoming wave of compensation for shorter working hours and other quarantine compensation payments in their SAP systems such as SAP HCM. We at valantic will provide three basic tips for this and we also offer an extensive package of measures.

The correct handling of shorter working hours

The path to efficient implementation of compensation for shorter working hours at companies can be quite complicated. The employer may not simply direct compensation for shorter working hours arbitrarily at his own discretion. Rather, he needs a legal basis for this. This can be a labor contract, a labor agreement or a bargaining agreement.

Therefore, you should check in advance whether there are bargaining agreements or appropriate passages in the respective labor contracts in connection with shorter working hours.

The contracts quickly become very complex. At most companies, there are various labor contracts, which may regulate and interpret the topic of shorter working hours very differently. But that’s not all: Added to this are the rules for handling a reduction of wages, for example. All of this makes it difficult to enter compensation for shorter working hours in the standard SAP system. Instead, users should conduct individual analyses and anchor the compensation for shorter working hours in their SAP HCM.

However, there are also perils in the technical implementation, for switching on the module for compensation for shorter working hours in SAP HCM is generally not enough. Instead, each individual case requires specific settings – new wage types, plans for shorter working hours, and support packages.

Taming SAP

Compensation for shorter working hours doesn’t mean anything more for SAP HCM than using more info types and making some adjustments in accounting and time management.The concern for companies is quick and efficient solutions so that they do not lose their way in the chaos: Home office and time management and compensation for shorter working hours have to be handled quickly and properly so that daily business does not run off the rails. valantic assists and advises companies on these HR tasks and helps to set up SAP HCM accurately. The concern here is to create plans for shorter working hours, calculating target and actual compensation and subsidy variants, as well as wage types for lost hours.

The effects of quarantine

Shorter working hours are only one side of the coin. The quarantine provisions also affect companies and employees enormously. Authorities can declare quarantine at home for every employee if an employee had contact with a patient or has himself fallen ill. Anyone who is in quarantine can claim compensation for loss of earnings. The employer pays this money for up to six weeks. The employer, in turn, can have this money repaid by the responsible authority. Which authority this is depends on the federal state in question. Starting in the seventh week, those affected receive compensation directly from the authority.

valantic can help you determine the requirements and implement compensation payment for quarantine in your SAP HCM. The SAP workaround focuses on absences, activity prohibitions, and new types of wage patterns. Our non-binding package of measures describes the measures regarding the topics of compensation for shorter working hours and quarantine compensation payments with which we have already helped our customers. In these challenging times, the concern is that everybody work together and in concert so that companies, customers, and HR departments can keep working together smoothly when our new everyday life goes back to business as usual.

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