- Overview: Turkey
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Turkey
If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in Turkey Guide below will help you understand the nuances of labor legislation in the country.
When the company is planning to enter a new foreign market of Turkey and has a need to employ a local national there, the first question to answer is how it is going to make local hires.
We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.
This solution helps you employ your global sales force in Turkey as well as in other countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.
Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.
So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Turkey instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.
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 100% compliant solution that guarantees you and your employees fully compliance with local legislation in Turkey .
We are experts in global workforce employment in Turkey, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Turkey.
Hiring and Firing Workforce in Turkey Guide
Over the last five years, Turkish economy has gained popularity for its steady economic boom and by 2030, it is projected to be one of the fastest growing economy in the world. Technology-wise, Turkey is verse developed in telecoms, transportation and energy and has low taxation policy with a lot of incentives to encourage both domestic and foreign investment. Its central location and readily accessible dynamic and well-educated workforce is another factor that makes 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 are an overview report of what you should know about doing business in Turkey.
# Employment Agreements
The Turkish Labor Code and labor law principles do not define specific categories of workers. However, employment contracts are classified into categories. 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 as a result of long lasting practice by some companies to be used for the purposes of workplace regulation.
Further, there is also a distinction developed in practice with regard to regular employees and executive managers (who are deemed to be the representatives of the employer). This distinction originates from court precedents which hold that executive managers who are 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 as 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. A written contract should be signed by both employer and employee; 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 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 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 a completion of certain construction project can be given as an example to fixed-term contracts. It is important to note that fixed-term contracts should be made in written as required by law.
Employers can temporarily transfer or assign an employee with their consent within the same holding company or within 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. With that being said, during the continuation of the temporary employment relationship the employee must perform their duties originating from the employment contract for the benefit of the temporary employer. Temporary work agreements must be in written form, cannot exceed a period of six months, and can only be renewed twice. The original employer continues to pay the salary of the employee 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, provided they are 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 with regard to certain matters, such as trial periods, salary payment terms, and so on. Collective bargaining agreements can be made between trade unions of employees and employer unions or with employers which are not affiliated to a union, and they are binding. Workplace union representatives are under the obligation of providing corporation, peace and harmonization in the workplace between employees and employer, listening to the requests of the employees and solving their complaints, protecting employees’ rights and assisting the practice of working terms and conditions regulated under the TLA and collective bargaining agreements.
# Fixed-Term vs Open Ended
A fixed-term contract cannot be extended or renewed in a sequential manner, 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 expiry of the contact term. It is worth pointing out that open-ended contracts grant broader rights to employees compared to fixed-term contracts. The below table show 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)
Both employee and employer can terminate an open-ended employment contract, provided that required notice period is given to other party. In case fixed-term employment contract is concluded only for a defined period of time (with a specified end date) there will not be a notice of termination/notice pay obligation.
On employee will
The employees are entitled to terminate their employment contracts, whether the contract is for a definite or indefinite period, before it’s expiry or without having to observe specified notice periods in case of serious and important reasons. The fulfillment of the conditions are not sufficient for the employee to terminate the contract and the employee should also notify to 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 indicate that the notice of termination should be made in writing and served through notary public and the employee should indicate the reasons for his/her termination clearly and in a reasonable manner.
Termination of employee contracts by employers could be classified under two main categories. The first is termination without just cause and the second is termination with just cause. Termination of an employee contract without just cause (or any specific fault on the employee) is naturally at the discretion of the employer. 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 to the employee the following amounts of salary to compensate for that period:
- 2 weeks of pay for employees worked for less than 6 months
- 4 weeks of pay for employees worked for more than 6 months, less than 18 months
- 6 weeks of pay for employees worked for more than 18 months, less than 36 months
- 8 weeks of pay for employees worked for more than 36 months.
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 as protected employees. In addition, dismissals based on language, race, religion, sex, political or philosophical views or pregnancy are prohibited, and so employees who are discriminated against in these ways can be considered to be protected employees.
# Notice period
The termination of an employment contract is not valid unless a 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 on the basis of 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. In the event that 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, the length of which can be prolonged through mutual agreement of the parties or through 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
The termination of the employment contract by an employer 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 with the number of 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, any 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 1 year, the employer should pay this compensation to the employee.
# Employee Benefits and Contributions
Mandatory benefits required by law to be provided by an employer
Salary, social security contributions, paid annual leave, paid sick leave, general health insurance contribution, weekends, public holidays, official holiday salaries, overtime payments, maternity leave or paternity leave pays are main mandatory benefits. The employer may also provide to employees additional voluntary benefits
Non-mandatory benefits that are offered by an employer
Benefits such as the value of premiums, private insurances, 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, which are a common benefit scheme offered to employees. Foreign companies operating in Turkey or Turkish companies may design employee stock option and stock purchase plans and award stock option to their employees in Turkey in their employment contracts or supplementary employment documents describing benefits granted to employees.
# Probationary period
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 having to observe 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 work cannot exceed 270 hours per year. Employees cannot opt out of such restrictions. In principle, all employees are entitled to receive overtime payment. Employees are entitled to overtime payment 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 the salary of an employee includes overtime of up to 270 hours per year without additional pay provided that the salary of the employee is higher than the minimum wage.
# Work hours
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 rest time in a week. Employees cannot opt out of such restrictions either on an individual or collective basis.
# Annual Leave
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 who are below the age of 18 or above the age of 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
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 period of rest recommended in the report. However, if the period of illness or injury exceeds the employee’s valid notice period by six weeks, the employer will have the right to terminate the employment agreement with immediate effect by paying the employee’s severance payment on the grounds that the employee’s sickness cannot be cured.
Entitlement to 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 programmes. 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)
Recovery of sick pay from the state
If the employer decides to make additional payments to the employee during sick leave, it is not possible for the employer to recover those payments from the state.
# Parental Leave
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 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.