Examples of HCM Organization Models for Mexico

Let's look at some examples of different models for Mexican organizations in Human Capital Management (HCM). To operate the HR processes for Mexico, you need to define a set of organizational units that comprise the organization's structures.

Each enterprise can combine these organizational units in a different way in order to set up the model that best fits their business needs. Before you begin creating organizational units, it's helpful to understand the organization structure models supported by the Mexico localization.

The organization model has these characteristics:

• The legal entity is usually the legal employer and Payroll Statutory Unit (PSU)

• Tax reporting units (TRU) are defined in relation to a legal employer

These examples show how to partition payroll data within a legislative data group (LDG). Note that an enterprise can have many PSUs of the same or different legislative data groups. It's possible for a legal entity to be both a PSU and a legal employer.

Single Payroll Statutory Unit with Single Legal Employer and Single Tax Reporting Unit

Let's look at an example of the basic model for setting up a single location organization. InFusion Mexico is a registered legal entity, which is both a payroll statutory unit (PSU) and a legal employer.

Set up this model with these basic steps:

1. Create a Mexican enterprise in the Enterprise Structures Configurator. The Enterprise classification represents the top most structure of the organization.

2. Use the Functional Setup Manager to create a Mexican Legislative Data Group.

3. In the Setup and Maintenance area, go here:

   • Offering: Workforce Deployment

   • Functional Area: Legal Structures

   • Task: Define Enterprise Structures for Human Capital Management

Expand the task to display a set of related tasks. Use the Legal Entities task to create a legal entity. You can define it as a legal employer and a PSU, or as a legal employer with another PSU from the list of values. When you define the legal entity, enter the registration information.

A legal reporting unit (LRU) is created automatically when a legal entity is created. In HCM payroll, it's referred as a tax reporting unit (TRU). Enter the LRU information. Set the Legal Reporting Unit Classification to Tax Reporting Unit on the Legal Reporting Unit HCM Information page.

Single Payroll Statutory Unit with Single Legal Employer and Multiple Tax Reporting Units

This example illustrates the basic model for setting up a single location organization with multiple TRUs. InFusion Mexico is a registered legal entity which is both a PSU and a legal employer.

The setup procedure for this model is the same as shown above, except that you create an additional TRU under the PSU. Use the Legal Reporting Unit task to create a new LRU associated with the main legal entity. Enter the necessary details for the new LRU.

This figure shows an organization structure for Mexico having a single PSU with a single Legal Employer and multiple TRUs.

Single Payroll Statutory Unit with Multiple Legal Employers and Multiple Tax Reporting Units

Let's look at an example of an enterprise with multiple legal employers and multiple tax reporting units (TRU) under a single Payroll Statutory Unit (PSU). You can have two different types of setup for this model:

• Single PSU with multiple legal employers and multiple TRUs where each legal employer is associated with a single TRU.

• Single PSU with multiple legal employers and multiple TRUs, where each legal employer is associated with multiple TRUs.

In this example, InFusion Mexico has two legal employers, InFusion Mexico Legal Employer one and InFusion Mexico Legal Employer two, both belonging to the same PSU.

The setup procedure for this model is the same as shown above, except that you create two separate legal entities and designate them as legal employers. The first legal entity, InFusion Mexico Legal Employer one, is designated also as a PSU. For InFusion Mexico Legal Employer two, you must select the PSU as InFusion Mexico Legal Employer one. Every legal employer under the same PSU must be similarly configured. Enter the jurisdictions and registrations as required.

This figure shows an organization structure for Mexico having a single PSU with multiple legal employers, where each employer is associated with multiple TRUs.