What Are the Requirements to Benefit from Employer’s Share Incentive of Unemployment Insurance Premium? 26 February 2019
As remembered, a number of amendments were made on Law on Unemployment Insurance no. 4447 (“Law”) with Article 25 of the Law on the amendments on Labor Health and Safety and other Laws and Statuary decrees in 04.04.2015. Within this scope, Communique on the Procedures and Principles Regarding The Benefit From Employer’s Share Incentive of Unemployment Insurance Premium In the Workplace Which is Classified as Very Dangerous and Have More than 10 Employees (“Communique”) was published in Official Gazette no. 36042 in December 31 2018 .
Article 4 of Law, it was regulated that in order to encourage employers for taking necessary precautions to prevent occupational accidents, an employer’s share incentive of unemployment premium will be applied for work place which have specific conditions. Employer’s share incentive of unemployment insurance premium of which principles and procedures are determined by Communique, is begun to apply as of 01.01.2019 with the termination of period regulated by Law.
In accordance with the Law and Communique, employer who wants to benefit from the application of employer’s share incentive of unemployment insurance premium should meet the following requirements:
- The work place should be classified as very dangerous class under Article 9 of Occupational Health and Safety Law,
- Employers should have totally more than ten employer for each month in workplaces which are classified as very dangerous throughout the Turkey,
- No occupational accidents resulting in death or permanent disability occurred in question work place, during the last three years,
- The work place should have an agreement concluded with an occupational safety specialist and workplace physician or institutions authorized by the Ministry of Family, Labor and Social Services.
In accordance with the provisions of Law and Communique, the period of benefitting from the application of employer’s share incentive of unemployment insurance premium is determined as three years from the calendar year following the three-year period in which the workplace meets the conditions for benefitting from incentive. Accordingly, employer share of unemployment insurance premium shall be collected as 1% instead of 2% over prime earnings for each months/periods for a period of three years from the beginning of the calendar year following the three-years in which conditions are met.
In order to continue to benefit from incentive, the above-mentioned conditions must be met during a three-year period of incentive. Even if the incentives will be discontinued in case of loss one of the conditions except the occurrence of an occupational accident resulting in death or permanent disability for work during the three years period in question, underpaid employer’s share of incentive unemployment insurance premium will not be collected from employers. However, it is required to pay attention that where the detection of that an occupational accident has occurred that results in death or permanent disability, employer’s share incentive of unemployment insurance premium with delay penalty and late fee shall be collected from employer. Furthermore, Communique regulates sanctions such as the prohibition of employer to enjoy from incentive for 5 years and collection of premium incentive together with delay penalty and late fee.
On the other hand, in case of an occupational accident resulting in death or permanent disability in the work place where relationship of primary employer & sub-employer is established, application of incentive for primary employer and sub-employer shall be discontinued. However, occupational accident resulting in death or permanent disability in the work place of primary employer does not cause to terminate application of incentive for sub-employer.
Since systems of Social Security Institution shall automatically control that whether work place meet all required conditions three years before the calendar year to benefit from incentive, there is no need for separate application by employers concerning with this issue. However, loss of any of the conditions of benefitting from incentive, employer should apply in order to benefit from the same incentive again.
In conclusion, employer’s share incentive of unemployment insurance premium is started to apply as of 01.01.2019, which is the following calendar year of the expiration of three years from the effectiveness date of Law, 04.04.2015. Although, Social Security Institution will automatically control whether employers covered by incentive, it should be evaluated by each employer that whether the conditions stipulated by the Law and the Communiqué have been fulfilled in order to benefit from employer’s share incentive of unemployment insurance premium which will provide a great advantage in terms of costs of employers.
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