As is well known, the unemployment fund pays unemployment benefits to dismissed workers based on the insured premiums paid during the last three years prior to termination of the employment contract. The longer the insured premium period, the longer the duration of the benefit.
Accordingly;
- Insured workers who have paid unemployment insurance premiums for 600 days receive unemployment benefits for 180 days,
- Insured workers who have paid unemployment insurance premiums for 900 days receive unemployment benefits for 240 days,
- Insured workers who have paid unemployment insurance premiums for 1080 days receive unemployment benefits for 300 days.
In addition to this known support from the Unemployment Fund, when an employer becomes unable to pay wages, the Wage Guarantee Fund covers a portion of the employee’s unpaid wages. While unemployment payments arise after an employee’s contract is terminated by the employer without just cause, the Wage Guarantee Fund provides support for wages that cannot be paid either during employment when the employer is unable to pay or after termination for unpaid wages earned before the employer’s payment difficulty.
When Does the Wage Guarantee Fund Take Effect?
Under Law No. 4447, the Wage Guarantee Fund applies when an employer who employs persons considered insured under the law becomes unable to pay due to one of the following: declaration of concordat, issuance of an insolvency certificate (aciz vesikası), bankruptcy, or postponement of bankruptcy. In these cases the employer is deemed to have payment difficulties and the fund is activated.
How to Apply to the Wage Guarantee Fund?
- a) If an insolvency certificate is issued against the employer: the insolvency certificate or a seizure report indicating that no assets are available for seizure obtained from the enforcement office, together with a worker receivable document prepared by the employer,
- b) In case of the employer’s bankruptcy: the court decision declaring bankruptcy or a document showing the publication of the bankruptcy decision under Article 166 of the Enforcement and Bankruptcy Law, and a worker receivable document certified by the bankruptcy office or bankruptcy administration,
- c) If the employer’s bankruptcy is postponed: the court decision postponing bankruptcy or a document showing the publication of the postponement under Article 166 of the Enforcement and Bankruptcy Law, and a worker receivable document approved by the trustee,
- d) If a concordat is declared for the employer: the court decision granting a concordat period or a document showing the publication of the concordat period decision under Article 288 of the Enforcement and Bankruptcy Law, together with a worker receivable document approved by the concordat commissioner or concordat liquidation officer. The employee should then apply to the relevant Institution unit with these documents.
What Are the Conditions for Payments from the Wage Guarantee Fund?
- The worker receivable document must relate to wage claims arising before the date the employer fell into payment difficulty.
- The worker must have worked at the same workplace within the last year prior to the employer’s payment difficulty.
- The daily wage claim cannot exceed the daily earnings upper limit determined under Article 82 of Law No. 5510.
- The wage claim is paid by the end of the month following the employee’s application to the Institution.
- Applications must be submitted to İŞKUR directorates using the EK-1 Worker Receivable Document.
How Many Months Can Be Covered by the Wage Guarantee Fund?
The fund covers unpaid claims for up to three months of the worker’s basic wage that accrued before the employer declared concordat, an insolvency certificate was issued for the employer, or the employer was declared bankrupt or had bankruptcy postponed. The important point is that the fund covers unpaid wages that accumulated before the bankruptcy or payment difficulty, not wages earned after bankruptcy.