Minimum labor application (commonly called “asgari işçilik”) is a procedure carried out by the Social Security Institution (SGK) to determine whether the employer has registered a sufficient number of workers for the work performed. It is particularly relevant for private building construction and public procurement projects. In practice, however, reported worker numbers are often higher than the actual workforce.
Minimum Labor Procedure
For building permits (occupancy certificates) and for obtaining performance guarantees in tendered works, the Social Security Institution applies the minimum labor procedure. To pass this review, the responsible office evaluates and calculates whether the employer has reported a sufficient number of employees to SGK for the specific job. If the calculation shows that the employer underreported workers for the job, the employer must pay contributions for the missing workers to SGK.
In construction of private buildings and in tender projects, post-completion calculations use minimum labor rates to determine whether a sufficient workforce was reported. The assessment bases the required labor share on the building’s cost or, for tendered works, on the contract’s net payment amount (excluding VAT). The applicable minimum labor rate for the specific job is applied to the net eligible amount to decide whether reported labor is adequate.
Request for Inspector Review
If SGK’s calculations reveal underreported workers and the employer receives a resulting contribution debt, the employer may object. If the employer presents invoices showing either material-plus-labor or labor-only costs for the work, the SGK office will forward the file to the Guidance and Inspection Group Presidency for an inspector review and an inspection will begin.
When the job has special circumstances that make assessment difficult — for example, if a specific minimum labor rate cannot be identified — the office may not be able to determine whether the reported workers are sufficient. In such cases, the file is subject to inspector review even without the employer’s consent. Otherwise, whether the file proceeds to inspection depends on the employer’s request, so the employer should carefully consider asking for an inspection.
Consider Carefully Before Requesting an Inspection
An employer should think carefully before requesting an inspector review. During the SGK office calculation, the assessment typically uses the listed minimum labor rate reduced by 25% for the relevant job. If the file goes to an inspector, the inspector will apply the full listed minimum labor rate. This difference effectively results in a 25% disadvantage for the employer. Offices may also escalate files for inspection when no workplace file exists in SGK records for that employer’s site, when no labor was reported even if a workplace file exists, or when it is not stated that the work was performed by the employer’s regular workforce. In such cases inspectors apply the full listed rate rather than a reduced rate. For these reasons, employers should weigh the decision carefully before requesting an inspection regarding labor debt that may arise from SGK calculations.
Practical guidance: if the total amount of labor invoices (including material-plus-labor invoices excluding VAT) does not exceed 25% of the building’s construction cost, or for tendered work does not exceed 25% of the net payable amount excluding VAT, and if labor-only invoices excluding VAT do not exceed the missing labor amount by more than 25%, then requesting an inspector review is generally not recommended. When material-plus-labor and labor-only invoices are available, it is useful to consult the relevant tables and perform calculations before deciding whether to seek an inspector review.