PEO - EOR – BPO Services

Sub-contracting practices are also common in Türkiye.

Generally, the sub-employer and the main employer working together in the same workplace and with the same supply chain causes various problems. The sub-employer forms a separate workplace in the workplace of the main employer and receives another social security workplace registration number for its employees.

The crucial point in the subcontractor agreement is that the employee works at the workplace of the main employer.

In addition to the customer's internal workforce, an outsourcing relationship may be built if the customer desires and uses the vendor’s employees for one of the following:

• Additional tasks that are not part of the customer's core operations, such as shipping, cleaning, or catering services.
• Customer’s core operations that require special expertise such as in the operational or technological areas.

The authority constantly emphasizes that business administration is a social science, and the main functions of organizations are mainly as follows: Marketing, Finance, Production, Accounting, Human Resources.

Thanks to the unprecedented growth of mobile communications, remote work is on the rise. Remote employees can execute their projects and surpass their goals wherever they please. With the significant advantages of the digital communication, it is easier than ever to outsource projects in another county. However, global expansion has its risks. Successful global expansion requires effective planning and diligent insights to understand the financial risks associated with doing business in a new country.

Under the OECD/G20 Inclusive Framework on BEPS (Base Erosion and Profit Shifting), over 135 countries are collaborating with each other to put an end to tax avoidance strategies that exploit gaps and mismatches in tax rules to avoid paying tax.

Permanent establishment (PE) is a tax principle that varies depending on the country; it means that a tax authority deems a business to have a stable and continuous presence in the country and is therefore subject to corporate taxes, withholding taxes, and VAT.

In case a client purchases non-income generating auxiliary and ancillary services, such as preparatory work and back office management, it does not trigger the PE status. Even so, the final authority on status is the local tax authority. The company shall be liable to demonstrate that its activities are auxiliary, and it does not warrant the PE establishment status.

Based on the above-mentioned scenarios (both for PEO and EOR), if a company (Client) is deemed to have PE, it will be subject to all the taxes it would pay for profits generated in the country, according to the local tax obligations. In addition, the company can be levied charges for interest on the taxes, and penalties regarding the period over which the company’s activities took place. The tax authority can consider all parties responsible in terms of unpaid tax duties.

General Directorate of Occupational Health and Safety, Family, Labor, and Social Services Ministry determined the measures to be implemented in the workplaces during the COVID-19 pandemic. Most of the new regulations are permanent. The fundamentals of the new regulations are as follows:

• An assessment should be made about where and how employees might be exposed to the COVID-19 virus. Therefore, the employer must know the current location of the employee.
• Depending on the location of the employee, employees under high risk should be identified based on city, building, area due to the nature of the job, and their business processes.
• Individual risk factors, such as chronic illnesses and pregnancy should be identified and recorded, and necessary measures should be evaluated to protect these employees.
• Protective equipment suitable for protection against COVID-19 should be provided to employees in the workplace.
• Employees should be informed about the updated emergency plan and they should be made aware of what they should or should not do under the plan.
• The employer should instruct the employee to stay home for at least 14 days or any such longer period of time recommended by his/her health care provider or the applicable health department.
• The employer must have information regarding employees’ travels and location in terms of affected or risky areas.
• Employers must monitor all kinds of leaves and the location of the employee.
• All employees must follow the recommendations of the employer along with the Ministry of Health and WHO.
• Employees should inform the employer and workplace physician about their health conditions. In this regard, the employer must be in direct communication with each employee.

First off, as mentioned above the vendor would enter into a 'co-employment relationship'. For this reason, there shall be shared responsibilities between the vendor and the client besides the responsibilities of the vendor. And the vendor must be in direct communication with each employee as an employer of record. The vendor shall expect to be in cooperation with the client in either case.

• The employer is obliged to ensure the compliance of other Turkish regulations such as personal data protection, enforcement and bankruptcy, criminal law, and relevant legislation in the context of employment relationship. They can only achieve this by having a close relationship with the employees.
• The employer shall periodically provide trainings and information to employees about the protection of personal data and privacy and check the obedience to the policies and procedures given by the employer on related issues under the Turkish Data Protection Law No. 6698.
• The employer shall also inform employees about the processing of their personal data in detail and always be in an easily accessible position for the sake of employees’ applications related to the processing of their personal data under the Turkish Data Protection Law No. 6698.
• The employer shall pay the amount of lien to the enforcement authorities in cases where there is a seizure of salaries, severance pay, and other payment of employee until the employment relationship or the debt ends under the Turkish Enforcement and Bankruptcy Law No. 2004.
• The employer shall notify the closest police department about the recruiting and identity information about the recruited employee pursuant to the Law on the Identity Disclosure No. 1774.
• The employer shall ensure the usage of vested annual leave, marriage, death, paternity and other excused leave, maternity leave, administrative leave, sick leave, and other compulsory leaves stipulated in the law.
• If there is a wish to implement unpaid leave for employees in the event of incapacity to work due to COVID-19, the employer shall take the written consent of employees. This consent is also necessary for remote work.
• The employer shall track the travels of the employees within the context of their duties regarding events that can create liability of employer such as work accidents.
• The employer shall ensure the payment of employee's expenses resulting from their job.
• Due to the COVID-19 circumstances, employees shall take an official assignment letter from their employer to travel to cities which are banned from entry and exit.
• The employer shall take all kinds of precautions to ensure occupational health and safety including providing information and training to employees, adapting the health and safety measures to changing conditions, and improving the current situation.
• The employer shall scrutinize the employee's suitability for the job in terms of health and safety while assigning tasks. To this end employer may monitor the employees’ health with periodic health checks in necessary conditions.

Employment contracts with a fixed term are a valuable instrument with respect to labor laws in many countries. Over time, many firms in Türkiye have begun using this type of employment contract as a way to circumvent the grant of various legal rights that come with indefinite term contracts. Issues with the application of regulation persist despite the numerous court decisions and attempts to stop the usage of fixed-term contracts to serve purposes other than those that they are intended to serve.

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