Minimum Wage Support for 2020

What is Minimum Wage Support?

Minimum wage support is the legal support provided to the employers within the scope of payment of insurance premiums in order to minimize the burden on employers.

Minimum Wage Support entered into force with the Law No. 6661 on the Military Service Law and Law on The Amendment of Some Laws published in the Official Gazette No. 29606 dated 27 January 2016.

It is stated in the Article 17 of the Law that;

The provisional Article 68 has been added to the Social Insurance and General Health Insurance Law No. 5510 and the amount to be found as a result of multiplication of 3,33 TL per day for January / December 2016 will be deducted from insurance premiums to be paid to the institution by the employers with the necessary conditions and this amount will be met by the treasure.

Minimum Wage Support for 2020

The application, which has continued throughout 2017, 2018 and 2019 as well, will also continue to apply for 2020 with the Article 29 of the Law on the Amendment of Certain Laws No. 7226, which entered into force to be implemented as of 01/01/2020 in the Official Gazette No: 31080 dated 26/03/2020 and the provisional article 80 added to the Social Insurance and General Health Insurance Law No. 5510.

In addition, details of the application were published in the Circular on the Minimum Wage Support dated 21/04/2020 and numbered 24010506-010.06.01-E.5570009 by the Directorate of Insurance Premiums of the SSI.

Conditions of the Minimum Wage Discount

According to the provisional article 80 of the Law No. 5510, private sector employers employing insured persons whose long-term insurance branches are applied within the scope of subparagraph (a) of the first paragraph of Article 4 of the said Law and except for employers who employ insured persons whose long-term insurance branches are applied within the scope of subparagraph (a) of the first paragraph of Article 4 in the headcounts and positions of public administrations listed in the table (I) attached to the Law No. 5018 and other public workplace employers will also benefit from the related support.

The provisions of the said article due to document types numbered 1, 4, 5, 6, 13, 14, 20, 24, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 47, 51, 52, 53, 54, 55, 90, 91, 92 given for insurance holders subject to long-term insurance branches (invalidity, old-age and death insurance) will be used.

In the monthly premium and service documents or withholding and premium service declarations given to the Institution for the same month of 2019, provided that the insured whose daily earnings based on the premium are reported as 128 TL (the calculated amount is 256 TL for the workplaces belonging to private sector employers subject to collective labour agreement in accordance with the provisions of Law No. 6356.) and below are not exceeding the total number of premium payment days, the amount to be found by multiplying 2.50 Turkish Liras per day for the January-December period of 2020 will be deducted from the insurance premiums that employers will pay to the Institution.

The total number of premium payment days of the insured notified for the workplaces that were included in scope the law for the first time in 2020,

Not making less than the minimum number of insured notifications reported under 4a in January-November 2019,

That an existing workplace is closed and opened as a business unit under a different name and title or shifting employment between companies that have direct or indirect partnership relationships in a way that retains management and control, failure to establish a collective transaction to take advantage of the Unemployment Insurance Fund contribution such as changing ownership in private businesses,

Amount covered by the Unemployment Insurance Fund withdrawn with due amount penalty and interest and the provisions of this article do not apply to these workplaces determined to have reported insufficient premiums earnings for the January / December 2020 period and the provisions of this article do not apply to these workplaces.

Giving the premium service documents of January-December 2020 within the period, paying the insurance premiums within the legal period, having the insured notification of the people they employ,

Workplaces with delayed or deferred debt will be able to benefit from this law.

For workplaces that did not employ workers in the same period of 2019, the premium service notification of the first month followed has been taken into consideration. For the employers included in the scope of the law before 2019, but who have never reported any insured in 2019 it will be applied as if they were included in the scope of the law for the first time in 2020.

According to the additional Article 9 of the Law No. 3213, the daily earnings based on the premium determined for the insured working underground will be taken as 341 TL, where "Lignite" and "Hard Coal" extracted in the workplaces wages cannot be less than twice the minimum wage and not exceeding 50 percent of the premium payment days reported in the Premium Service document reported to the Institution for the same month of 2019, in 2020 the total number of premium payment days for the insured reported in the premium service documents given for the current month is taken into consideration.

In case insurers are employed within the scope of incentives where the insurance premiums are fully covered by the employer and the insured shares, in cases where the amount of insurance premiums to be paid by the employers for the insured in this scope is less than the amount to be covered by the Unemployment Insurance Fund, minimum wage support to be benefited only as much as the amount to be paid by the employer.

The same provisions apply to the minimum wage support to be applied for subcontractors. The point to be considered is that the main employer and all subcontractors will be evaluated separately.

According to the first paragraph of the additional article 9 of the Law No. 5510, if they meet the specified conditions, there is no obstacle for benefiting from the provisional article 80 application for employers who employ the insured household employee for 10 days or more in a month.

Sample Calculations

1) In January 2019, a total of 280 days was reported for 10 personnel with a daily premium of 01 document type whose earnings were below 128 TL.

Considering that the total number of days of the personnel is 320, which was reported as 01 document type in January 2020, they will benefit from the support for 280 days.

According to this, the amount of the support to be benefited will be 280*2,5= 700 TL.

2) In February 2019, a total of 300 days was reported for 10 personnel with a daily premium of 01 document type with earnings under 128 TL.

Considering that the total number of days of the personnel is 250, which was reported as 01 document type in January 2020, 250 days will be supported.

According to this; the amount of the support to be benefited will be 250*2,5= 625 TL.

3) The number of personnel reported in 2019 was reported to be the least in May and let's consider this number is 25.

Accordingly, when the number of staff reported to the institution in any period of 2020 is below 25, the support will not be benefited.

4) Let's consider that the total number of premium payment days of the insured notified to the Institution of 01 Document type in January at the workplace registered in 2020 is 150.

Since there are no notifications made to the institution in 2019, the number of days to be benefited from the support will be 150.

According to this; the amount of the support to be benefited will be 150*2,5=375 TL.

5) Let's suppose that in the same period of 2019, 300 days of suitable document types were reported to the institution. According to this; the amount of the support to be benefited will be 300*2,5 TL= 750 TL. However, let's consider that the premium amount to be paid by employer incentives in 2020 is only 450 TL. In this case, the support to be benefited will be calculated as 450 TL.

Please click here to access the text of the law and the circular.

Please click here to access the circular.