The Social Security Institution (SGK) requires employers—both natural persons and legal entities registered with provincial and district directorates—to submit an insured employee registration form for each worker they employ. Employers must declare the total premium amount for each worker by 23:59 on the 23rd day of the month following the relevant month. This total includes the employee’s SGK contribution (14%), the employee unemployment insurance contribution (1%), the employer’s SGK contribution (22.5%), and the employer unemployment insurance contribution (2%). Employers are also responsible for making the actual payment to the institution by the end of the month. Submitting registration and payments is entirely the employer’s responsibility; insured employees have no obligation to report or pay these contributions.
Many employers still try to employ workers without registering them with SGK, often because of the mistaken belief that registered employees are too costly. Since previous years, significant changes have been introduced to deter this behavior. The penalties for employing uninsured workers were made more effective in 2017. Employers and citizens can report uninsured employment through the SGK tip line (ALO 170) or by submitting a written complaint at local SGK offices. Reports are investigated promptly by SGK inspectors and processed without delay.
The following sanctions are applied to employers found to have employed an uninsured worker:
- Failure to submit the worker’s employment registration (regardless of which ledger the employer keeps): penalty equal to 2 times the minimum wage.
- Failure to declare the worker on the monthly premium and service statement: a penalty of twice the minimum wage for each month not declared.
- If the worker is not included on the payroll, the payroll is considered invalid and a penalty equal to half the minimum wage is imposed for each month (regardless of ledger type): half the minimum wage per month.
- If statutory books become invalid because of the uninsured worker, a penalty equal to half the minimum wage is imposed for each month. This penalty does not apply to employers who are not required to keep ledgers.
In addition to these fines, any incentives or subsidies previously granted to the employer will be reclaimed from the month the sanction applies.
Court rulings have clarified the responsibilities and protections for employees. The Supreme Court (Yargıtay) has determined that employees are not responsible for unpaid employer contributions: the employer is the party that withholds employee shares and files declarations to SGK, and therefore unpaid employer contributions do not prevent an employee from receiving old-age pensions (retirement benefits). Submitting premium and service declarations and making payments are employer responsibilities, while collection of unpaid amounts falls to SGK. Consequently, whether SGK contributions have been paid by the employer does not affect the employee’s entitlement to social security rights and benefits.