Employees who faced financial hardship due to the coronavirus pandemic have been granted an important benefit. Under the new measures, employers who hire additional workers during the pandemic period will receive premium support. Insurance contributions for workers who were receiving unemployment benefits and were rehired within 90 days will also be covered by the unemployment fund.
Support for Hiring Additional Workers
The omnibus law numbered 7256, published in the Official Gazette and recently enacted, offers significant incentives to boost employment. Employment incentives have been extended through the end of 2020 and pandemic-specific recruitment incentives have been introduced. Accordingly, private-sector employers who increase their workforce above the number employed between January 2019 and April 2020 will be eligible for support. The reference point for determining eligibility is the month in that period with the lowest number of employees.
For example, a workplace that had three employees in most months of the period but only two in December of the previous year can benefit when it hires a new worker. Similarly, an employer who had five employees in one month and eight in other months during that period can receive support for each additional hire. Employers that were established for the first time after April 17, 2020, or those that had no employees during the January 2019–April 2020 period, can receive support for every employee they hire.
Cash Support While the Employee Actually Works
The employee support amount is set at 1,324 TL per month for those who meet the conditions. This amount will not be paid in cash to the employer but will be deducted from the employer’s payable insurance contributions. To qualify for the support, the employee must be actually employed and working. The support continues during the period when dismissals are prohibited; after termination, employers may still benefit from standard employment incentives. If newly hired employees are placed on unpaid leave, they become eligible for a monthly cash wage support of 1,168 TL from the unemployment fund.
The incentives granted to workplaces that employ men aged 18–29 and women aged 18 and over, originally set to expire at year-end, are extended through 2023. For employers hiring these groups, an employer contribution incentive is applied based on gross wages. Monthly incentive amounts per worker start at 603 TL in 2020 and can reach up to 4,000 TL. The duration of support ranges from 12 months up to 48 months.
Tax Incentives for Additional Employment
Tax incentives for additional employment are also provided. For employees hired in addition to the previous year’s average workforce, private-sector employers receive premium incentives for 12 months; if those hires are women, young people, or persons with disabilities, the incentive period extends to 18 months. Incentive amounts for manufacturing and information technology sectors range from 1,103 TL to 2,943 TL per worker per month. Employers creating additional jobs also benefit from income tax and stamp tax exemptions calculated on the minimum wage amount, which for 2020 corresponds to a monthly tax exemption of 176 TL.
Additionally, social security contributions for workers who start employment early will be covered by the unemployment fund for 12 months upon written application, offering another benefit to employers who hire during this period.