Türkiye cracks down on illegal employment, nearly $31.5M in fines issued

In a nationwide crackdown, Türkiye’s Social Security Institution (SGK) uncovered over 11,000 unregistered workers and issued over 1 billion Turkish liras in fines, targeting fake workplaces and fraudulent insurance practices.

Türkiye’s crackdown on illegal employment

• SGK’s intensified efforts: As part of its battle against illegal employment, SGK focused on fake workplaces and fraudulent insurance practices through its “Fake Insurance and Fake Workplace Tracking Platform.”
• Widespread inspections: Between January and July 2024, SGK conducted inspections at 71,456 workplaces across Turkey, particularly in sectors and regions known for high rates of illegal employment.
• Unregistered workers: SGK identified 11,172 workers being employed without proper registration.
• Massive fines: Businesses employing these unregistered workers were fined ₺1,073,333,289.
• Fake workplaces: 1,407 workplaces were discovered to be fraudulent, with 47,766 workers’ insurance premiums being falsely reported under these fake entities.

What is economic impact of illegal employment?

• Minister’s insights: Labor and Social Security Minister Vedat Isikhan highlighted the economic consequences of illegal employment, noting that a 1-point reduction in illegal employment could increase annual income by approximately ₺27.1 billion.
• Sustainability concerns: Minister Isikhan also emphasized the importance of this crackdown for the sustainability of SGK’s actuarial balance and the overall social security system.

How Türkiye fights against illegal employment?

• Fair competition: Isikhan warned that illegal employment creates unfair competition between compliant employers and those who evade regulations, harming both workers’ rights and the national economy.
• Progress in reducing illegal employment: The rate of illegal employment has significantly decreased from around 52% in 2002 to 26% today, and 16% in non-agricultural sectors.
• Future focus: SGK’s inspections will continue to target sectors with high levels of illegal employment and foreign workers, intensifying efforts where these issues are most prevalent.