- Overview: Turkey
- Global PEO and Payroll
- Global HR Compliance
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Turkey
Are you considering hiring staff in Turkey? Or are you already employing a workforce there? Then the Hiring and Firing Workforce in Turkey Guide below will give you a good overview of the country’s labor legislation.
When a company plans to expand into a new foreign market such as Turkey, one of the first questions is how to make local hires. This Global Employment Guide will help you understand the process and what to expect in Turkey.
Outsourcing global employment can be a complex and time-consuming task. There are many factors to consider, such as pay and benefits, business expenses, and compliance with local laws. This is where our Global Employer of Record service can help.
Our team will take on the burden of employment administration for your foreign workforce in Turkey or any other country worldwide. This will free up your time to focus on other business aspects. This solution helps you employ your global sales force in Turkey as well as in other countries of the world, provide pay and benefits to your employees, as well as administer any business expenses with our help.
When you engage your foreign workforce through us, you can be confident that they will fully comply with local labor legislation. This protects you from any non-compliance or employee misclassification risks while we take on all employment risks.
Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.
Global Employer of Record solution is a 100% compliant solution that guarantees you and your employees fully comply with local legislation in Turkey.
Global Employment Services in Turkey — Recruitment. Onboarding. Management. Retention. Termination
Compliance and legal guidance at every step of the Global Employment Journey. 24/7 local support.
2. Global Mobility
5. Payroll Administration
6. Working Time & PTO Processing
7. Benefits Administration
8. Tax Administration & Reporting
|Talent skilled in highly-specialized areas||Employee Work Visa and Work Permit sponsorship||Health checks||Employment Agreement drafting||In-country registration with statutory bodies||Working hours||Mandatory Benefits||Tax Reporting frequency and requirements;||Employment agreement termination:|
|Executive search||Dependent Visa||Criminal record checks||Compliant worker onboarding on your behalf||Day-to-day payroll management||Overtime||Health insurance||Employer taxes & contributions||Dismissal – by the employer|
|Contingency workforce||Visa extension||Background checks||Account setup in the payroll and HR system||Monthly pay slips or other pay frequency||Public holidays||Workers’ compensation||Employee taxes & contributions||Resignation – by the employee|
|Application for a sponsor license for a foreign national||Education checks||Employee data entry and records maintenance||Accruals||Annual leave||Unemployment insurance||Withholding tax||Termination by mutual agreement|
|Relocation assistance||Managing probation periods||Allowances||Parental leave||Voluntary Benefits||Local tax payments and reporting to local authorities||Notice period handling|
|13th and 14th salary||Sick leave||Share plans for executives||End of financial year reporting||Final settlement & severance payments|
|Additional leave||Bonuses & Equipment provision||De-registration with statutory bodies|
|Expenses reimbursement & business trip processing|
|Health insurance, dental treatment|
Global Employment Burdens Acumen Global EOR Helps Reduce in Turkey
- Compliant hiring and payroll in 190+ countries
- Ongoing monitoring of legal, firing & firing regulations
- Tax & benefits guidance
- Continuous labour, tax, payroll, and immigration compliance monitoring & updates.
2. Risk Control
- Permanent establishment risk
- Worker misclassification risk
- Under-taxation risk
- HR & immigration compliance risk
- Intellectual property right risk.
3. Need for Local Incorporation
- Outsourced HR support upon new market testing
- HR arm upon global expansion
- Business in transition – M&As, close-downs.
4. Employee Transfer
- From PEO to PEO
- From EOR to EOR
- From legal entity to legal entity
- Convert Independent Contractors to full-time employees.
5. All-in-one Solution
Acumen Global Employer of Record offers integrated global employment solutions under one roof and can replace multiple vendors, including:
- Payroll Company
- Employee Benefits Broker
- HR Consultants
- Background Checks Vendors
- IP Attorney
- Tax Advisor
- Translation service
- Legal Advisor
- Immigration Advisor
- HR Compliance Advisor.
6. Global Knowledge. Local Expertise and Support
- Faster time-to-hire with streamlined paperwork and communication
- One platform to onboard and manage all team members
- Streamlined global payroll
- Single source of truth for contracts and documents
- Dedicated customer service
- 24/7 local support
- Simplified hiring for Full-time employees and contractors
- Expertise with hiring and firing local and foreign workforce.
Hiring and Firing Guide for Your Workforce in Turkey
Over the last five years, the Turkish economy has gained popularity for its steady economic boom. By 2030, it is projected to be one of the fastest-growing economies in the world. Technology-wise, Turkey is verse developed in telecoms, transportation, and energy and has a low taxation policy with many incentives to encourage domestic and foreign investment. Its central location and readily accessible dynamic, and well-educated workforce are other factors that make it very attractive for direct investment.
To know more about the dynamics of the business environment in Turkey, you need to understand, among other things, the country’s employment law and labor relations.
The following is an overview report of what you should know about doing business in Turkey.
Employment Agreements in Turkey
The Turkish Labor Code and labor law principles do not define specific categories of workers. However, employment contracts are classified. The main categories of employment contracts are:
- Continuous and non-continuous
- Fixed-term and indefinite term
- Full-time and part-time
- Team employment contracts
- Employment contracts with or without trial periods
- Provisional employment contracts.
Although no specific provision is made under the Turkish Labor Code regarding worker categories, such as white-collar and blue-collar workers, such a distinction has developed due to long-lasting practice by some companies to be used for workplace regulation.
Further, there is also a distinction developed in practice concerning regular employees and executive managers (deemed to be the employer’s representatives). This distinction originates from court precedents that hold that executive managers responsible for the administration of the workplace are not entitled to sue for reinstatement to work if the employment contract is terminated for just cause. Another distinction regarding these employees is that, contrary to the general rule under the Turkish Labor Code, the fixed-term employment contract of an executive manager will not be considered an indefinite employment contract even if it is renewed more than once.
Permanent Employment Contracts
Indefinite/open-ended (Belirsiz süreli) employment: This is used when the job has no specified duration or set end date. Both employer and employee should sign a written contract; it should include the following information:
- Employing company’s business name, employer’s name , and address of the workplace
- Worker’s name, social security number, and residential address
- Work start date and duration of the trial period
- Term of the contract (indefinite or termination date)
- Work hours and the period (daily, monthly)
- Description of the job and employee’s responsibilities
- Employer’s responsibilities
- Details of salary, overtime, payment terms, and annual leave
- Termination rules
- Other special conditions.
Fixed-term Contracts in Turkey
Fixed-term contracts are made for a specified period or a specific event, the duration of which can be objectively determinable even though not expressly set out in the contract. An employment contract between a contractor company and a building foreman made for the duration of the completion of a certain construction project can be given as an example of a fixed-term contract. It is important to note that fixed-term contracts should be made in writing as required by law.
Employers can temporarily transfer or assign an employee with their consent within the same holding company or the same group of companies or to another employer that works in a similar business. In such a case, the employment relationship between the employee and the employer remains intact. That said, during the continuation of the temporary employment relationship, the employee must perform their duties originating from the employment contract to benefit the temporary employer. Temporary work agreements must be written, cannot exceed six months, and can only be renewed twice. The original employer continues to pay the employee’s salary during the temporary employment period.
Collective bargaining agreements are allowed under Turkish law. These agreements have the purpose of protecting the rights of those employees who are in weaker positions vis-à-vis their employers. Trade unions or employee representatives, given the authority, have the right to negotiate collective agreement terms in the name of the employees. Once the collective agreement is executed, the employer will be bound by the terms and conditions of that agreement. Collective bargaining agreements are subject to specific regulations under the Turkish Labor Code concerning certain matters, such as trial periods, salary payment terms, etc. Collective bargaining agreements can be made between trade unions of employees and employer unions or with employers who are not affiliated with a union, and they are binding. Workplace union representatives are under the obligation to provide corporation, peace , and harmonization in the workplace between employees and employer, listen to the requests of the employees and solve their complaints, protect employees’ rights, and assist the practice of working terms and conditions regulated under the TLA and collective bargaining agreements.
Fixed-Term vs. Open-Ended Employment Contracts
A fixed-term contract cannot be extended or renewed sequentially unless there are solid grounds to do so. Otherwise, such contracts are deemed to be open-ended from the outset. Similarly, a fixed-term contract is automatically transformed into an open-ended contract if parties implicitly continue the employment relationship after the expiry of the contract term. It is worth pointing out that open-ended contracts grant broader rights to employees compared to fixed-term contracts. The below table shows the significant differences between the two:
|No automatic expiration||Automatically expires at the end of term.|
|A termination notice should be sent by terminating party||No need for termination notice|
|Employee may be entitled to “notice pay” upon termination||No notice pay upon expiry|
|Employee may be entitled to “severance pay” upon termination||No severance pay upon expiry|
Turkish Labour Code embraces the principle that all employees should be treated equally. Accordingly, employers cannot treat temporary and agency workers or part-time workers differently from the permanent employees unless justifiable grounds exist for the different treatment
Employment Termination and Severance Pay (Dismissal)
Employees and employers can terminate an open-ended employment contract, provided that the required notice period is given to another party. If a fixed-term employment contract is concluded only for a defined period (with a specified end date), there will not be a notice of termination/notice of payment obligation.
Termination by the Employee Initiative
The employees are entitled to terminate their employment contracts, whether the contract is for a definite or indefinite period, before its expiry or without having to observe specified notice periods in case of serious and important reasons. The conditions are not sufficient for the employee to terminate the contract, and the employee should also notify the employer regarding such termination. Although there is no statutory provision for the form of termination notification, the precedent of Appellate Court decisions on the subject indicates that the notice of termination should be written and served through a notary public. The employee should indicate the reasons for his/her termination clearly and in a reasonable manner.
Termination by Employer
Termination of employment contracts by employers could be classified under two main categories. The first is termination without just cause and the second is with just cause. Terminating an employment contract without cause (or any specific fault on the employee) is naturally at the employer’s discretion. The automatic outcome of such termination is compensatory amounts. There are different types of payments to be made to the employees at immediate termination: Notification Compensation: This is a compensatory amount paid to the employee at immediate termination if termination notice subject to the designation of the TLC is not provided earlier. Therefore if an employer wishes to terminate an employee immediately without any notice period, such employer shall pay the employee the following amounts of salary to compensate for that period:
- Two weeks of pay for employees who worked for less than six months
- Four weeks of pay for employees who worked for more than six months, less than 18 months
- Six weeks of pay for employees who worked for more than 18 months, less than 36 months
- 8 weeks of pay for employees who worked for more than 36 months.
Termination by Mutual Agreement
Employment contracts may be terminated by mutual agreement of the parties. The legal basis of mutual termination agreements is rooted in “freedom of contract” as a constitutional right. An employer and employee terminate an existing employment contract through a “mutual termination agreement.” Alternate ways to terminate employment contracts include where notification is exchanged between an employer and employee according to statutorily defined periods, and immediate termination on just grounds, on the death of an employee, and at the end of the agreed period of employment contracts with a definite term of duration.
It is Prohibited to Dismiss
There is no official or legal definition of a protected employee; employees who fall under the scope of job security provisions can be deemed protected employees. In addition, dismissals based on language, race, religion, sex, political or philosophical views, or pregnancy are prohibited. So employees who are discriminated against in these ways can be considered protected employees.
Notice Period in Turkey
The termination of an employment contract is not valid unless written notice is served to the employee and legal notice periods are respected. However, there are certain cases where employers are entitled to terminate the employment relationship based on a just cause which can be briefly summarized as health reasons, lack of good faith and moral character, and the employee’s absence), in which case the employer is not obliged to comply with the legal notice periods and can effect immediate termination. In the case of termination based on just cause, the employee is not entitled to a notice period payment. If there is no just cause, employers are obliged to comply with the notice periods, which vary depending on the length of the employment:
- Less than six months’ employment: two weeks’ notice
- Between six months up to 18 months employment: four weeks’ notice
- Between 18 months up to three years’ employment: six weeks’ notice
- More than three years’ employment: eight weeks’ notice
These notice periods are the minimum legal periods, which can be prolonged through mutual agreement of the parties or collective bargaining agreements. The notice periods can be prolonged for both parties, but court precedents state that the notice periods cannot be prolonged to the employee’s detriment.
Employers need not continue to employ terminated employees for the duration of these notice periods, as employers can terminate an employee’s employment effective immediately by making a payment in lieu of the notice period (that payment will correspond to the gross salary of the employee for the notice period).
Severance Payments in Turkey
An employer’s termination of the employment contract based on just cause or without cause imposes a severance payment duty on the employer. The employee’s service time must exceed one year before the employee will be entitled to a severance payment. The severance payment is calculated by multiplying the employee’s monthly salary by the years they have been employed by the employer. The severance payment cannot exceed a certain ceiling amount which is revised every six months by the government. In addition, employers are obliged to pay the amount that equals the employee’s unused annual leave, unpaid overtime work payments, and other earned benefits and bonuses. Severance Compensation: For any termination without just cause of the employees who worked for more than one year, the employer should pay this compensation to the employee.
Employee Benefits and Contributions in Turkey
Salary, social security contributions, paid annual leave, paid sick leave, general health insurance contributions, weekends, public holidays, official holiday salaries, overtime payments, maternity leave, or paternity leave pay are the main mandatory benefits. The employer may also provide to employees with additional voluntary benefits.
Benefits include the value of premiums, private insurance, company cars, bonuses, mobile phones, clothing, etc. Employers can determine to pay premiums (ikramiye) or bonuses (prim) to their employees under certain conditions and based on regular performance intervals. Turkey recently announced a new scheme for regulating meal cards, a common benefit scheme offered to employees. Foreign companies operating in Turkey or Turkish companies may design employee stock options and stock purchase plans and award stock options to their employees in Turkey in their employment contracts or supplementary employment documents describing benefits granted to employees.
Probationary Period in Turkey
Employment contract with a trial (probation) clause: If the parties have agreed to include a trial clause in the employment contract, the duration of the trial term shall not exceed two months. However, the trial period may be extended up to four months by collective agreement. Within the trial term the parties are free to terminate the employment contract without observing the notice term and without having to pay compensation. The employee’s entitlement to wages and other rights for the days worked is reserved.
Overtime in Turkey
Overtime work cannot exceed 270 hours per year. Employees cannot opt-out of such restrictions. In principle, all employees are entitled to receive overtime pay. Employees are entitled to overtime pay for all overtime exceeding 45 hours per week at 1.5 times their hourly rate. However, if the weekly working hours are less than 45 hours, a 1:1.25 ratio will be applied up to the 45 hours. It is possible to provide in the employment contract that an employee’s salary includes overtime of up to 270 hours per year without additional pay, provided that the employee’s salary is higher than the minimum wage.
Work Hours in Turkey
The maximum working hours allowed is 45 hours per week. Working hours can be distributed over the working days provided that daily working hours do not exceed 11 hours on any one working day. The maximum night working hours are 7.5 hours per week. Employees must be given at least 24 hours of rest time weekly. Employees cannot opt-out of such restrictions individually or collectively.
Annual Leave in Turkey
Employees who have worked for at least one year are entitled to paid annual leave. The length of the paid annual leave will vary depending on the length of employment. The minimum holiday entitlements for employees are contained in the Turkish Labor Code and are as follows:
- One to five years of employment (including the fifth year): 14 days per year
- More than five years to 15 years of employment: 20 days per year
- More than 15 years of employment: 26 days per year.
Employees below the age of 18 or above 50 are entitled to a minimum of 20 days of annual leave. The employees performing underground work will be entitled to an additional four days of paid annual leave in addition to the holiday entitlement calculated in line with the above criteria. These holiday entitlements can be extended through employment contracts or collective bargaining agreements.
Sick Leave in Turkey
Entitlement to Time Off
Employees are entitled to time off in the case of injury or illness. Employees who can document their injury or illness with a doctor’s report will be entitled to time off during the rest recommended in the report. However, suppose the period of illness or injury exceeds the employee’s valid notice period by six weeks. In that case, the employer will have the right to terminate the employment agreement immediately by paying the employee’s severance payment because the employee’s sickness cannot be cured.
Paid Time Off
Employers are not obliged to provide sick pay to employees during sick leave. Employees are entitled to compensation during such time through government disability programs. If the illness or injury can be classified as occupational, then the employee will be entitled to temporary sick pay for every day starting from the first day of their time off. However, where the illness or injury is not occupational, sick pay will be available for every day starting from the third day of illness or injury (additional conditions are applied under the related regulations)
Parental Leaves in Turkey
Pregnant employees can take fully paid leave for:
- Eight weeks before childbirth
- Eight weeks after childbirth.
Pregnant employees or employees whose wives are pregnant will be entitled to nursing benefits if certain premium conditions are fulfilled.
The employee whose spouse has given birth is entitled to five days’ paid leave.
Acumen International can help you kick-start your penetration or expansion in the Turkish market. Our solutions are created solely for the purpose of assisting any individuals or companies that want to enter or expand into any global market to do so in a timely, cost-effective, and compliant way.