16June2021

Employer's Obligation in Case of Death of the Employee

In case of the death of an employee, there are some payment obligations of the employers due to Labor Law No. 1475, Article 14, and the Turkish Code of Obligations No. 6098.

In case of the employee's death, all salaries, benefits in kind, and private life insurance guarantees would need to be paid to the employee's legal heir.

In addition, the following payments would also be applicable in case of the death of an employee:

1. Severance Payment

Per the 14^th Article of Labor Law No. 1475, in case of the termination of an employment contract upon the employee's death, the severance payment equal to a 30-day salary should be paid to the employee for each full year that has passed during the period of the service/employment contract as of the starting date of the employment. For periods exceeding one year, the payment should also be made based on the same proportion.

Also, in case of the employee's death, the severance payment per the above statements should be paid to the legal heirs of the employee.

According to these statements, if the employee has completed 1 year, it is an obligation to pay severance pay to their legal heirs.

2. Death Compensation

Per the 440^th Article of Turkish Code of Obligations No. 6098;

The employment contract ends automatically with the death of the employee. The employer is obliged to pay a one-month payment/compensation to their alive spouse, children younger than 18, or those who are obliged to be taken care of by the employee, and a two-month payment if the employment period has been more than five years.

Per these statements, if the employee's term of employment is more than 5 years, there is an obligation to pay a two-month wage payment. Otherwise, a one-month wage payment would need to be done under the name of death compensation.

This compensation is exempted from income tax per the 25^th Article of the Income Tax Law No. 193. Therefore, it will only be subject to stamp tax.

You can reach the Labor Law No: 1475 via the link. (In Turkish)

You can reach the Turkish Code of Obligations No: 6098 via the link. (In Turkish)

Should you have any queries or need further details, please contact your customer representative.

Author Erdoğdu Onur Erol, Category Social Security Law and Legislation, Taxation Law

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