Business in Turkey

Breastfeeding Break and Problems Faced in Practice

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terminating employment contract for reason of marriage

Although breastfeeding break is one of the labor right provided to female employees, it should never be forgotten that direct aim of this break is to provide the babies with their most precious and natural nutrition daily in appropriate periods up to a certain age. Therefore the subject here is not the employee but the newborn infant at first hand.

As a rule and in order to achieve the expected benefits for the infants it should be used daily, however in a big metropolis applying this leave as stated in law is clearly not possible. The big distances between workplace and residence of mother, traffic and so on, make it too difficult for the nursing woman to go home every day for 1,5 hour to feed her baby and come back to work again. In practice this problem is tried to be solved by combining the daily hours and using it weekly, monthly or as a whole (block using).

COMBINED BREASTFEEDING LEAVE

We witness that it is a common practice for the mother to combine the daily hours of break (1,5 hours) and use the nursing periods collectively. In this exercise, the workdays period between end date of maternity leave and the date child reaches one year of age, which is the period mother should take her 1,5 hours daily leave to feed her baby is calculated and the 1,5 hours of leave corresponding this duration are combined and used in total as will be seen example below.

Nursing Allowance

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terminating employment contract for reason of marriage

Nursing allowance (colloquially known as “milk money”) is a lump-sum payment made to nursing mother or to uninsured breastfeeding spouse of a male insurance holder to help them to feed their infants.

Allowance, arranged in Article 16 of Social Insurance and Universal Health insurance Law No. 5510, shall be paid for each newborn, provided that the newborn lives.

Nursing allowance is a lump sum paid for per baby, (i.e. it is not paid monthly) and the amount is 112 TL for 2015.

Terminating Employment Contract for Reason of Marriage

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terminating employment contract for reason of marriage

In Turkey legislation there are number of conditions for entitling to severance pay, and one of them is marriage for female employees, who have the right to terminate the employment contract due to marriage and request severance payment.

Although Labor Law No.1475 has been abolished and replaced by Labor Law No.4857; article 14 of Labor Act no. 1475, which regulates severance pay, is still valid and reads as follows: “… Or in the case that the woman dissolves the contracts voluntarily within a year beginning from the date of marriage a severance pay equal to 30-day salary shall be paid to the employee by the employer for each full year which has passed during the period of the service contract beginning from the starting date of employment. For periods exceeding one year, the payment shall be made on the basis of the same proportion.”

Gold Aid as an in-kind benefit

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employee personnel filesProviding employees with gold as a social aid is a controversial issue in practice as regard to accounting treatment of it (i.e. tax and social security liability).  

Many companies treat it as a cost item and directly record into expenses. In fact the gold aid should be treated as a direct benefit provided for employees and be included in payroll. By reason of the fact that the gold has the quality of being directly convertible to cash it is questionable to regard it as benefits-in-kind.

In-kind-benefits, by definition, are the aids and allowances employees benefit directly. They may have a value in cash, but are not directly convertible to cash. For this reason we cannot asses the gold aid, which is directly convertible to money/cash/many currencies, in the same context with the above said in-kind-benefits.

How to Be Calculated In Payroll

Total amount of gold aid must be converted into money in payroll calculation by taking the Central Bank's current rate as a basis and be entered into a separate column in the payroll.
Tax Liability of Gold Aid

Total amount must be deemed as salary and be included in the relevant months' income tax base.
And also it is liable to stamp duty in the total earnings, like all other pay items are.

 

Branches and Liaison Offices of Foreign Companies in Turkey

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employee personnel files

As a rule foreign nationals have the same right to establish companies as accorded to Turkish citizens.
Pursuant to Article 3 of the Law on Direct Foreign Investments, foreign investors are free to make foreign direct investments in Turkey, and shall be subject to equal treatment with domestic investors.

However foreign companies based in abroad may only set up branches and liaison offices in Turkey.  There are some differences as regard to functions and tax and social security liabilities of them.

BRANCHES OF FOREIGN BASED JOINT STOCK COMPANIES

Foreign based stock companies may only be allowed to set up a branch company by the approval of Ministry of Industry and Trade, and if they wish to employ staff they must set up a legal entity.

These branches may engage in commercial and profit making activities which should only be in the same scope of the parent company and they have autonomy in terms of accounting.

As the profit they made is obviously earned in Turkey they are subject to corporate tax in Turkey, and salaries of employees’ are subject to income tax withholding. But the salaries of expats that paid by directly parent company in foreign currency brought in from abroad are exempt from tax withholding. 

 

Employee Personnel Files

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employee personnel files

One of the most important and legally necessary instrument that should be created and maintained by personnel departments are the personnel files of employees. Although the documents and records kept in the file may vary as regard to qualification of employee and nature of business, some of them are essential. The complete, well-arranged and updated documents all in one place will be very useful and at hand when the employer wants to make any kind of decisions relating to employees, and also they have evidential value for the official authorities and before the courts in case of audit or lawsuits.

Turkish Labor Law No. 4857, Article 75 stipulates that; “The employer shall arrange a personnel file for each employee working in his establishment. In addition to the information about the employee’s identity, the employer is obliged to keep all the documents and records which he has to arrange in accordance with this Act and other legislation and to show them to authorized persons and authorities when requested.”

The Employee’s Consent Shall Be Required for Overtime Work and Works At Extra Hours

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the-employee-s-consent-shall-be-required-for-overtime-work-and-works-at-extra-hoursAs per the Labor Law, No: 4587, Article 41, works which exceed forty-five hours a week are defined as overtime. Employer may request employees to work overtime, not exceeding 270 hours per year. Further, the employee’s consent shall be required for overtime work, in January each year. In Turkey one of the most notably conflict between the employee and employer is encountered in the field of overtime wages and benefits.

Overtime work may be performed for purposes such as the country’s interest, the nature of the operation or the need to increase output. Overtime work is work which, under conditions specified in this Act, exceeds forty-five hours a week. . In cases where the principle of balancing is applied in accordance with Article 63, work which exceeds a total of forty-five hours a week shall not be deemed overtime work, provided the average working time of the employee does not exceed the normal weekly working time.

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