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Recent development
With the Law on the Amendment of the Social Security and General
Health Insurance Law No. 5510 and Decree No. 375
(“Law“) published in the Official
Gazette on 3 March 2023, which is also known as The Law on Early
Retirement Despite Failing to Meet the Age Requirement
(“EYT” – Emeklilikte Yasa Takilanlar in
Turkish), the conditions for the individuals who were deemed
registered with the Social Security Institution before 9 September
1999 to be eligible for retirement have been rearranged.
We would like to provide you with this quick guide for
employers, dealing with the questions that employers may face in
light of EYT. You may use this guide for information purposes, but
note that as this situation evolves, there may be changes in the
secondary legislation that concerns employers as well as this
guide. The information in this guide is presented as of 3 March
2023; the high-level guidance in this document is not intended to
be comprehensive legal advice.
1. Who will be able to retire under the relevant legal
legislation?
Individuals who were deemed registered with the Social Security
Institution (“SSI”) before 9 September
1999 will benefit from the relevant legal legislation. To qualify
for retirement within the scope of the Law, those who work under
the 4/1-(a) status of the Social Security and General Health
Insurance Law No. 5510 must (i) complete a 20-year
social security period if female, or a 25-year social security
period if male, and (ii) fulfill the conditions of
having paid 5000-5975 days of statutory social security insurance,
which vary gradually according to the insurance start date.
According to the relevant Law, the following individuals will be
entitled to retirement without any age
requirement:
- Individuals who started working before 8 September 1999
(inclusive) within the scope of long-term insurance branches
(disability, old age, and death insurance)
- Individuals who started working after 9 September 1999
(inclusive) within the scope of long-term insurance branches, but
whose insurance start date has been brought back to a date before 8
September 1999 (inclusive) with the service debt they incurred, as
per the provisions of the legislation that allows it
Insured individuals will be able to retire under the Law
regardless of whether they are subject to 4/1-(a), 4/1-(b), or
4/1-(c) status.
2. What should the employer demand from the employee who will
benefit from the Law and what actions should the employer
take?
In order to retire within the scope of EYT, the employee must
submit a resignation letter to the employer together with a letter
obtained from the SSI regarding eligibility for statutory seniority
compensation and preferably a letter stating that he/she has
applied to the SSI for old age pension pay.
The employer must notify the SSI within at most ten days
following the termination of the employment agreement. In this
case, the employer must make the SSI notification regarding the
termination of the employment with the code “08 – Due to
retirement (old age) or lump sum payment”.
3. What are the employer’s payment obligations for the
employees who will retire and terminate their employment within the
scope of EYT?
The Law does not have a specific regulation in relation to the
employer’s current payment obligations regarding employee
receivables and compensation per Labor Code No. 4857 and the
relevant legislation. In this context, the current practice
regarding the items to be paid by the employer to the employee who
terminates their employment relationship upon retirement will
continue to be applied. Accordingly, the employer’s payment
obligations regarding the employee receivables and compensation
towards the retired employee are as follows:
- Statutory seniority compensation
- Accrued and unpaid salary
- Accrued contractual benefits (e.g., premiums, bonuses,
commissions, etc.) - Accrued and unused annual leave pay
- Accrued and unpaid overtime/exceeding time pay
- Accrued and unpaid pay for work on national and public holidays
and weekly holidays
4. Can these payments be made in installments?
When the employment agreement is terminated, all of the
employee’s entitlements must be paid in full. Therefore, the
rule is that all receivables must be paid to the employee by the
date they retire. However, if there is a mutual agreement between
the employer and the employee, the relevant receivables may be paid
in installments.
5. Is the employer obliged to rehire the employees who retired
within the scope of EYT?
The rehiring of an employee who benefits from EYT depends on the
mutual agreement of the parties. The employer may rehire the
employee taking into account its needs and the employee’s
position, knowledge and qualifications. However, the employer is
not obliged to rehire the retired employees.
In any case, the employer is obliged to refrain from
discriminatory behavior, including during the recruitment process.
Otherwise, the employer may face risks of compensation and
administrative fines due to discrimination.
6. Does a period need to elapse before an employee who retired
within the scope of EYT is rehired?
There is no obligation for a certain period to elapse before the
reemployment of an employee who retired within the scope of EYT.
The employer may rehire the retired employee the day after they
terminated the employment, but may also reemploy them at a later
date.
7. Will there be a difference in the social security support
premium under the EYT legislation?
With the EYT legislation, employees who retire within the scope
of EYT will also be subject to social security support premium if
they work for the same employer or a different employer.
The EYT legislation stipulates that if employees who are deemed
registered with the Social Security Institution before 8 September
1999 (inclusive) start working subject to social security support
premium in the same workplace they last worked in, within 30 days
following the date the employee terminated the employment, the
amount corresponding to five points of the employer’s share of
the social security support premium will be covered by the
treasury.
However, if an employee who continues to work in the same
workplace after retirement subject to the social security support
premium terminates the employment relationship, it is not possible
to benefit from this incentive for the relevant employee.
The employer will not be able to benefit from the five-point
incentive for the employees who benefit from EYT and continue to
work in another workplace after terminating their employment within
the scope of the EYT legislation.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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