In the new era, there will be new and heavier sanctions for such violators. According to government news releases, the loss to the Ministry of Finance per year because of unregistered employment -- including declaring lower wages in order to pay a lower premium -- is roughly around YTL 25 billion. Including the tax loss, this amount increases to YTL 50 billion. Subsidies would be collected back
A communiqué has already changed the practice of application for subsidies. Having clearance from the Social Security Institution (SGK) is a must in order to benefit from government subsidies; the same will apply to ongoing subsidies. If authorities detect that a company benefiting from the subsidies violates the social security law and employs unregistered workers, the subsidies and benefits will be collected back with interest.
Reporting unregistered employment
The government is working on further legislation to prevent money laundering and financing terrorist activities.
The act is designed to keep a black list of companies that violate the law and recruit unregistered workers. The companies on the black list would be dismissed from bidding in government tenders for the next five years.
Reporting unregistered employment will be encouraged, and new hotlines will be launched for reporting incidents to government inspectors.
New legislation is already in place to compel employers to pay salaries via banking transactions. This will enable the government to control the registrations.
What is missing?
In my opinion, there is a missing point in this legislation. The sanctions should be extended to future and past subcontractors of the bidders, and the bidders should be disqualified from cooperating with subcontractors who have a record of unregistered workers in the past. Otherwise, no such legislative change will be effective in reducing the number of unregistered workers. The drafted law has not been enacted yet, and I am sure that somebody will take care of the subcontractor issue.
What should we do?
The step by the government is certainly a good one to stop unregistered workers, but I don’t believe that the big companies that participate in government tenders are likely to recruit unregistered staff. If I were the CEO of one of these big companies, I would apply the same conditions to the suppliers or the subcontractors I use. Maybe we should consider shopping from companies that are known to be careful about registered employment.
I have a final remark here. I don’t know if the government is concerned about an increase in unemployment. The measures will certainly cause a rise in labor costs, and this will trigger a reduction in the number of employees.
NOTE: Berk Çektir is a licensed attorney at law and available to answer questions on the legal aspects of living in Turkey. Send enquiries to b.cektir@todayszaman.com. The names of the readers are disclosed only upon written approval of the sender.
DISCLAIMER: The information provided here is intended to give basic legal information. You should get legal assistance from a licensed attorney at law while conducting legal transactions and not just rely on the information in this corner.
