Turkish Labor Law
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Turkish PM Davutoglu announced his government’s 2016 Action Plan intended for the realization of pre-election pledges, and includes some critical reforms which will have serious impact on the business world.
The plan will be implemented according to a schedule and contains numerous reforms and promises which will be put into effect within three months to one year.
We choose some of the significant ones and their potential effects on your business you may be interested most.
Minimum Wage Rise
Monthly net minimum wage will be raised to 1.300,00 TL starting from January 2016.
Undoubtedly that is the most significant change expected next year and will have important effects on the cost of employer and employment relations. You can find the related articles in our following websites: http://turkishlaborlaw.com/news/legal-news/346-revision-is-expected-on-minimum-wage and http://datassist.com/blog/109-expected-incentives-for-minimum-wage-rise
Prime Minister also stressed that precautions will be taken to prevent companies to be negatively affected from the wage hike and its inevitable incremental costs.
Attracting Qualified Foreign Work Force
A “Turquoise Card System (Turkuaz Kart )” will be prepared to facilitate the work permit and residence permit processes of qualified foreign professionals and their families.
A point scoring system will be set up concerning the education and training, experience, wage and language for the potential investors. They can have the same advantages depending on the capital they will be investing in Turkey.
Individual Pension System
The voluntary Turkish private pension system (Individual Pension) currently is a defined contribution model, intended to be complementary to the mandatory state social security scheme.
Now the plan aims to move into “automatic enrolment system” in individual pension scheme by taking the result of pilot studies as a base in six months time. Also some changes on state subsidy for participant employees and tax deduction for the premium contributions of employers are expected.
Half-Time Work with Full Payment for the Working Mothers
In current legislation female employee may take an unpaid leave up to six months after the expiry of her sixteen weeks statutory maternity leave.
In the plan, working women will be offered a choice to work half time with full pay up to two months on her first childbirth, three months on her second and six months for her third child. It is expected that “half time working pay” and the premiums corresponding to half hours not worked will be met by the state.
Reform on Taxation
New income tax law will be prepared by uniting together the current Income Tax Law and Corporate Tax Law.
Financing of the construction industry and machinery-equipment investments will be exempt from the Banking and Insurance Transaction Tax.
Small business owners’ income up to 8.000,00 TL will be exempt from tax.
Arrangements on Severance Pay
After negotiations with the parties and coming to a conclusion, new legal regulation on the severance pay system will come into effect within three month.
Arbitrator in Labor Disputes
In order to lessen the heavy burden of labor courts, the parties will be obliged to resort to arbitrator in the first place instead of litigation process for their labor disputes.
Some Other Pledges and Reforms
- Public Tender Act will be updated to match the EU standards.
- Government will pay the one year’s salary of a young employee in his first employment.
- A new public personnel regime will be set up by taken into account the international examples.
- Flexible working arrangement will be added to current legislation.
- In %6 percent SSI incentive practice, there will be no obligation of employing at least 10 personnel.
