Turkey introduces new social security incentives

On 17 November 2020, Turkey enacted the Restructuring of Certain Public Claims and Amendment of Certain Laws Law No. 7256, which introduces new provisions for the restructuring of public claims and the asset-peace incentive, as well as introducing amendments to tax legislation and changes to social security incentives.

Background

Previously, we explained the provisions of the Law relating to the restructuring of certain public claims, and cash repatriation vis-à-vis amendments to tax legislation (see this Law-Now article).

This article analyses measures related to social security. Specifically, the Law provides assistance with Social Security Insurance (SSI) payments for employers, re-employment support, and additional support for employment costs incurred by employers.

SSI premium support

Certain employees who have been terminated or unilaterally placed on unpaid leave are entitled to daily wage support in the amount of TRY 39.24, which is paid from unemployment insurance funds.

According to the Law, unemployment insurance beneficiaries are entitled to support from the unemployment insurance fund if they find a job within 90 days from the date of effective termination and work continuously for this employer for at least 12 months.

SSI premiums for the period when unemployment benefits were received will be covered by the Unemployment Insurance Fund and employees benefiting from this incentive will have uninterrupted SSI registration (i.e. they will be considered registered with SSI even during the period they were unemployed, which would otherwise result in deregistration for that period).

Re-employment assistance

As explained in this Law-Now article, Law No. 7244 on the Reduction of the Effects of New Coronavirus on Economic and Social Life and Amendments to Certain Laws, which was enacted on 17 April 2020, contains relief measures such as a ban on dismissals to mitigate the economic impact of the pandemic.

To assist employees whose contracts were terminated before the ban and continued to face economic difficulties, the Law introduced a re-employment support mechanism to encourage the re-employment of these employees and prevent undeclared employment. According to the Law, employers will be granted monthly support of TRY 44.15 per day for the period between 1 December 2020 and the end of the dismissal restrictions if they re-hire and reinstate employees whose employment was terminated between 1 January 2019 and 17 April 2020 for any reason other than failure to comply with moral and good-conduct policies (e.g. serious violations of company policy, the law, bullying). This also applies to workers who were employed by the employer in question on 1 December 2020 without filing SSI.

To be eligible, the worker must:

• not be on the list of employees registered with SSI as of 1 October 2020;
• apply to and be re-hired by their last employer between 1 December 2020 and 31 December 2020; and
• not be a retiree or a foreign national.

Additional employment support

Because Turkey aims to increase economic activity and employment rates during and after the pandemic, the Law establishes additional employment support for employers at the rate of TRY 44.15 per day for the period between 1 December 2020 and until the end of the layoff restrictions. This support is forthcoming provided that the total number of employees is more than the minimum number of total employees between January 2019 and April 2020. This amount will be offset against the employer's contribution liability for that period.

Application for the re-employment benefit and additional employment support incentives will be made through the SSI online systems and only employers and sub-employers will be eligible.

Employers are not allowed to benefit from re-employment assistance and additional employment support incentives at the same time. An employer benefiting from the reemployment assistance or the additional employment assistance is required to employ at least half of the workers hired under these incentives after the end of the assistance period, and continue their employment for at least the period corresponding to the average time that assistance was received.

For more information on the new SSI premiums and employment incentives, contact your regular CMS consultant or the local CMS experts: Dr. Döne Yalçın or Sinan Abra.