Legal News

2018 MINIMUM LIVING ALLOWANCE SUPPORT FOR MINIMUM WAGE

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Asgari Ücretliye AGİ İlavesi Nihayet Açıklandı

2018 monthly net minimum wage will not get lower than 1.603,12 TRY. Any decrease due to the shift on taxable income brackets will be compensated by an increase in Minimum Living Allowance (AGİ).

In Turkey, tax rates are applied by taken the cumulative income as a base. As a result the minimum wage shifts to second tax bracket after the first half of the year (from 15% to 20%) and get lower than 1.603,12 TRY.

It is stipulated in Law No. 703 that minimum living allowance support for employees will be permanent. Minimum wage will not be affected from the shift on taxable income brackets and will not get lower than the net amount determined for single employee. For minimum wage earners the difference between the net income and the minimum wage for single will be compensated by an increase in minimum living allowance equal to this difference.

Income Tax General Communique Serial Number 265 has provided some explanations and examples as regard to implementation.

BENEFITING CONDITIONS

  • Employees whose net wage goes down below 1.603,12 TRY (monthly net minimum wage for single) will be benefiting from the arrangement. This lower limit is also valid for employees married plus children.
  • Employees, whose net wage drops down below 1.603,12 TRY, just because leaving and starting their job, or unpaid leave and similar reasons cannot benefit.  
  • Employees, whose wages decreased but still above 1.603,12 TRY cannot benefit from the MLA support.

EXAMPLES:

Example 1:

Employee: Single and has no child.

January Net salary: 1.603,12 TRY

Because of the shift on the taxable income bracket employee will receive less in September. October, November and December. For compensating the difference the following amounts will be added to Minimum Living Allowance and paid to employee

For September: 1.603,12-1.566,84=36,28 TRY

For October/November/December: 1.603,12-1.516,87=) 86,25 TRY 

Example 2:

Employee: Married+3 Children + Spouse not working

January Net salary: 1.709,67 TRY

Because of the shift on the taxable income bracket employee will receive;

September: 1.673,39 TRY

October, November and December: 1.623,42 TRY

As his salary doesn’t go below 1.603,12 TRY he will not benefit from Minimum Living Allowance support.

2018 MINIMUM WAGE SUPPORT

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Asgari Ücret Desteği Genelgesi Yayımlandı

The daily amount of earnings subject to premium that will be taken as a base in the minimum wage support is increased from 110,00 TRY to 120,00 TRY. Also the base amount is increased from 164,70 TRY to 180,00 TRY in the unionized workplaces.

Also, as per SSI Circular 2018/20; the due support amounts related to January, February, March, April, which are not refunded yet, will be set off from the May premium debts of employer at one time. In case not all the support amount is setoff, the remaining will be set off from the next month’s debts.  

As is known, employers were receiving daily 3,33 TRY premium refund throughout 2017 for each worker whose wage (earnings subject to premium) were notified under daily gross 110,00 TRY (monthly gross 3.300,00 TL) in 2016, and for each personnel employed in new enterprises established / registered within 2017.

Now with the Cabinet Decree, 2018/11668, issued in the Official Gazette on 20th June 2018; between January and September 2018, employers will be receiving daily 3,33 TRY premium refund throughout 2018 for each worker whose wage (earnings subject to premium) were notified under daily gross 120,00 TRY (monthly gross 3.600,00 TRY) in 2017. The daily base amount for unionized workplaces will be 180,00 TRY (monthly 5.400,00 TRY).

  IN NON-UNIONIZED WORKPLACES IN UNIONIZED WORKPLACES
Daily Earning Upper Limit 120,00 180,00
Monthly Earning Upper Limit 3.600,00 5.400,00
Amount to be multiplied by Total Premium Covered Days 3,33 3,33

WHO CANNOT BENEFIT FROM THE SUPPORT?

A - Employers who;

  • do not submit their Monthly Premium and Service Documents and do not pay the premiums in time,
  • in the investigations and inspections performed by the officers authorized with audits and checks, are found to be not notified the employed personnel as insured or the notified insured is not working virtually,
  • did not pay the premium, administrative fine and delay penalty debts to Institution (SSI), cannot be benefiting from the above incentives
  • The amounts covered by Treasury will be collected back with delay fine and default interest from the establishments who are found out to be dealing with fictitious transaction, in order to benefit from incentives.

EFFECTIVE DATE OF SOCIAL SECURITY AGREEMENT BETWEEN TURKEY AND HUNGARY

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Effective date of Social Security Agreement between Turkey and Hungary is determined as 1st April 2018.

As we informed you before, Social Security Agreement between Turkey and Hungary signed in Budapest on 24 February 2015 had been accepted in Parliament and the related Law No. 6961 had been published in the Official Gazette on 3 April 2017.

However, there was some confusion about its enactment date. Now with the Government Decree 2018/11543, issued on 5 June 2018, the effective date of above said agreement is announced as 1 April 2018.

SCOPE OF THE AGREEMENT

This agreement will apply to following legislation:

In relation to Turkey;

  • Invalidity, old age, survivors insurance
  • Work accidents and occupational diseases
  •  Sickness and maternity insurance in the scope of general health insurance
  • Unemployment insurance for employees working under an employment contract.

In relation to Hungary;

  • Insurance obligation and payment of social security contributions covering social insurance benefits; pension, health insurance and unemployment
  • Social insurance pension benefits
  • Health insurance benefits
  • Benefits for the persons whose working capacity is changed.

OUTLINES OF THE AGREEMENT

  • Equal treatment: Persons in the scope of this agreement will, with respect to social security, have the same rights and obligations, as provided or stipulated for a citizen of the contracting country
  •  As Regard to entitlement to social security benefits (retirement etc.) provided by contracting parties, the length of services acquired in both country will be combined
  • Healthcare benefits for insured and their families will be safeguarded by legislation of both countries
  • If a person transfers his residence to other country while receiving income, he will continue to receive this income in the country to which  he transferred his residence
  • Benefits in the scope of temporary incapacity will be provided by both contracting parties.

POSTING – SECONDMENT

Secondment/posting period is 24 calendar months.

  • Employed person: In case an employee is send by the employers to work temporarily on behalf of this employer in the other contracting country, that employee will continue to be subject to the legislation of sending country, on condition that posting period doesn’t exceed 24 calendar months and the posting doesn’t aimed at replacing a previously posted person.
  • Self-employed: In case a self-employed person temporarily transfers his business to other contracting country he will be subject to legislation of the first country, on condition that self-employed activity doesn’t exceed 24 calendar months.

In the above cases, 24 months period may be extended for once up to maximum 60 months by the mutual request of employee and employer, or by the personal request of self-employed person

Cross-Border Transfer Of Personal Data - Part I

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The minimum particulars that must be included in the agreements between transferor (resident in Turkey) and receiver of personal data transferred between countries that have not adequate level of protection are issued in Personal Data Protection Board (The Board) website on 16 May 2018.

TRANSBORDER TRANSFER OF PERSONAL DATA

As per article 9 of Law No 6698 “Personal data cannot be transferred abroad without explicit consent of the data subject.”

Exceptions: The same exceptions specified in Art. 5 and Art. 6 (exceptions related to Processing Personal and Special Categories of Data which are explained below*) are valid for transfer of personal data, but following conditions should also be present;

  • there is an adequate level of protection in the foreign country to which data is sent
  • in case there is not adequate level of protection, data controllers in Turkey and in the concerned country should guarantee the adequate level of protection in writing, and also permission of the Data Protection Board is necessary.

Countries that have adequate level of protection will be determined and announced by the Board.

THE CASES NO EXPLICIT CONSENT IS NEEDED

*Personal data can be processed without seeking the explicit consent of the data subject in the presence of the following conditions:

  • where it is clearly specified by laws
  • where processing is necessary to protect the vital interests of the data subject or of another person where the data subject is physically or legally incapable of giving his consent
  • where processing is necessary for drawing up or for performance of a contract to which the data subject is party
  • where processing is necessary for fulfillment of legal obligation of the controller
  • where the related data are made public by the data subject
  • where processing is necessary for acquisition of, exercising of, or protection of a specific right
  • where processing is necessary for legitimate interests of controller, on condition that fundamental rights and freedoms of the data subject are not violated.
  • Personal data relating to health and sexual life may only be processed without obtaining the explicit consent of the data subject where processing of the data is required for the purposes of preventive medicine, medical diagnosis, the provision of care or treatment or the management of health-care services, and where those data are processed by a health professional and authorized institution and organizations subject to the obligation of professional.

Conditions of cross- border personal data transfer shown in the table below.

CONDITION/IN THE PRESENCE OF CROSS-BORDER TRANSFER
Explicit consent Yes
Exceptions (in art. 5 and 6) + Adequate level of protection Yes
Exception + No adequate level of protection + Written undertaking between transferor and receiver in both country yes

THE MINIMUM PARTICULARS THAT MUST BE INCLUDED IN THE AGREEMENTS

  1. Data Controller To Processor
  • Obligation of Data controller
  • Obligation of Data Processor
  • Common Provisions

  1. Data Controller To Controller
  • Obligation of Data Transferor
  • Obligation of Data Receiver
  • Common Provisions

Full translation of above agreements will be published as an “Employer Bulletin” in our website.

TERMINATION DUE TO DEATH OF EMPLOYEE

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In case of death of an employee the employment contract will be terminated automatically. As a consequence of employee’s death there will be three type of payment.


1. FUNERAL BENEFIT
Funeral benefit is a lump-sum payment made to the right holders of the insurance holder who deceased when;
- receiving incapacity income due to work accident or occupational disease or
- receiving permanent incapacity income, invalidity, duty disability or old - age pension.
- minimum 360 days of invalidity, old - age and survivors insurance premiums should be notified for the deceased.
Funeral benefit shall be granted to the insurance holder's spouse, if not to children, if not to parents, if not to siblings.
Funeral benefit is paid by SSI.


2. SEVERANCE PAY
In case the deceased employee worked at least one year at the workplace his/her dependents will be paid a severance pay equal to last 30 days’ gross wages for each full year of employment. Date of death will be taken as a base.


3. DEATH INDEMINTY

Death compensation is paid to right owner of the employee who died while his/her employment contract is continuing.

- Reason of death is not important; it can be work accident or suicide.
- Employment contract can be open ended or fixed term.
- In calculation of the death compensation the last salary will be taken as a base.
- For employee whose length of service is less than 5 year, one month’s salary will be paid as compensation.
- For employee whose length of service is more than 5 year, one month’s salary will be paid as compensation

Withholding Tax And Monthly Premium Service Document Application Postponed To 1 October 2018

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We informed you that “Withholding Tax and Monthly Premium Service Document” application will start as of 1st of July 2018; however the start date is determined as 1st October 2018 by the Finance Ministry’s General Communique issued in Official Journal number 30435, dated 29 May 2018.

As is known, it is stipulated by the Law No. 6728 that “withholding tax returns and SSI e-declarations will be combined in a single form under the name of Withholding Tax and Monthly Premium Service Document and submitted only to the tax offices until the 23rd of the following month.

Regulation On Data Controller Registry Issued

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The Regulation on Data Controller Registry has been published in Official Journal numbered 30286, dated 30 January 2017.

As is known, according to Law on The Protection of Personal Data, No. 6698 all natural and legal persons, collecting, processing and transferring personal data are deemed as “Data Controller” and shall be registered in “Data Controller Registry” (VERBİS) before starting personal data processing with some exceptions determined by Personal Data Protection Board (The Board).

NOTICE PAY AND JOB SEEKING LEAVE

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As per article 17 of Turkish Labor Law 4857, 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.

The minimum notice periods depend on the length of service as shown below;

* Less than 6 months 2 weeks

* 6 month to 1.5 years 4 weeks

* 1.5 years to 3 years 6 weeks

* More than 3 years 8 weeks.

Notice periods can be substituted by payment in lieu. The employer may terminate the employment contract by paying in advance the wages corresponding to the term of notice. Employee as well may pay the notice payment for terminating the contract (by resignation).

In the presence of just cause for termination parties doesn’t have to observe notice periods.

JOB SEEKING LEAVE

Employee, whose contract is terminated, should be allowed at least two hours job seeking leave within working hours during the notice period. Employee may use these hours as total provided that he/she informs the employer before the termination date.

Job seeking permission is arranged in article 27 of Labor Law;

“During the term of notice the employer must grant the employee the permission to seek new employment within working hours without any deduction from his wage. The time devoted to this purpose should not be less than two hours daily and if the employee so requests such hours may be added together and taken at one time. But if the employee wishes to take these hours at one time, he must do so on the days immediately preceding the day on which his employment ceases and must inform the employer in advance.

If the employer does not grant the permission to seek new employment or allows less time than that stipulated in this Article, he must pay the employee the wages corresponding to the time to which he was entitled.

If the employer makes the employee work during the time to be allowed for seeking new employment, he must compensate the employee twice the amount of wages he is entitled to even for no work during the time which should be allowed for seeking new employment.”

Another important point is that taking the job seeking leave in total doesn’t change the actual the leaving date in SSI..

For example end of notice pay is 31 May 2018 and employee used 3 days leave as total. So he can cease to work on 28 May, but the actual leaving date will be 31 May 2018 from the point of SSI.

 

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