The Problem
Foreign business owners in Turkey often underestimate the strict employment obligations. Hiring employees without registering them with the Social Security Institution (SGK) or without written employment contracts in Turkish exposes the employer to severe penalties. SGK audits are frequent and retroactive, with fines that include back-payment of contributions plus significant surcharges.
How the Law Works in Turkey
The Labor Law (İş Kanunu, Law No. 4857) requires written contracts in Turkish, prior SGK registration, payment of the legal minimum wage (asgari ücret), and annual leave of 14 to 26 days depending on tenure. Severance pay (kıdem tazminatı) equals 30 days gross salary per year of service. Social security contributions are split between employer (approximately 20.5%) and employee (14% of gross salary).
What the Tourist Should Do
Register all employees with SGK before they start working. Prepare written employment contracts in Turkish specifying all terms. Set up payroll through a licensed accountant to ensure correct tax withholding and SGK contribution calculation. Maintain employee files with all required documentation. Comply with occupational health and safety requirements.
The Risks
Unregistered employment (sigortasız çalıştırma) carries fines starting from the minimum wage per employee per month of violation. Employers are personally liable for workplace accidents involving unregistered workers. Termination without valid cause requires severance pay and may require notice pay (ihbar tazminatı). Labor courts strongly favor employees in disputes.
LetFix Solution
LetFix advises foreign business owners on employment law compliance in Turkey. Our labor lawyers draft contracts, set up SGK registration, handle termination procedures, and represent employers in labor disputes.
