What you need to know about wage payments, the obligation of bank transfers, and the timing and manner of wage payments under Article 32 of the Turkish Labour Law No. 4857.
What Is a Wage? How Is It Defined Under Turkish Labour Law?
Article 32 of the Turkish Labour Law No. 4857 clearly defines the concept of a wage and the method of its payment. According to the law, a wage is the monetary payment made by the employer or third parties in return for the work performed by the employee. The fundamental condition is that the wage must be paid in exchange for work performed, and it must be paid in money.
Method of Payment: Obligation to Use a Bank Account
Following a legislative amendment in 2008, wages, bonuses, premiums, and similar entitlements paid to employees must, as a rule, be paid in Turkish Lira (TRY) via specially designated bank accounts.
This practice aims to both reduce informal employment and facilitate the tracking of employees’ receivables. However:
- If the employment contract stipulates that the wage will be paid in foreign currency, payment may be made in TRY based on the exchange rate applicable on the payment date.
- Even if payment is made through a bank, details such as whether the amount received by the employee is net or gross fall under the authority of the relevant ministries.
Who Is Obliged to Make Payments via Bank Transfer?
Depending on criteria such as the number of employees, the size of the business, and its location, some employers in Türkiye are legally required to make all employee payments exclusively via bank transfers.
This obligation is introduced through joint regulations issued by the Ministry of Labour and Social Security and the Ministry of Treasury and Finance.
Such employers are prohibited from making payments to their employees by any means other than bank transfer.
When Must Wages Be Paid?
According to Turkish Labour Law, wages must be paid at least once a month. However, through individual employment contracts or collective labour agreements, this period may be shortened to one week.
In the event of termination of the employment contract, the employer is obliged to pay all monetary entitlements owed to the employee in full and without delay.
Prohibited Methods of Wage Payment
Wages must be paid exclusively in money. Payments made using the following methods are considered invalid:
- Promissory notes
- Vouchers
- Documents claimed to represent money
- Receipts or tokens from entertainment venues or retail stores
Prohibited Locations for Wage Payments
According to the law, wages cannot be paid in taverns, bars, or similar entertainment venues. Likewise, payment cannot be made in retail outlets. An exception applies to employees who actually work in such venues.
Statute of Limitations for Wage Claims
Wage-related claims must be brought within five years. Once this five-year statute of limitations expires, the employee loses the right to claim unpaid wages. Therefore, it is important for employees to monitor their entitlements and seek legal remedies within the prescribed time.
Q&A Summary
- What is the definition of a wage?
It is the amount paid in money to a person in return for work performed. - How must a wage be paid?
It must be paid in money. - Is payment via bank account mandatory?
Yes, it is mandatory for certain employers. - Can wages be paid in foreign currency?
If stipulated in the contract, they can be paid in TRY based on the applicable exchange rate on the payment date. - What is the latest time by which wages must be paid?
Monthly, although this may be shortened to weekly by contract. - What happens to wage entitlements upon termination?
All monetary entitlements must be paid in full. - Can wages be paid in vouchers or promissory notes?
No, such payments are invalid. - Where is it prohibited to make wage payments?
Taverns, entertainment venues, and retail shops (except for employees working there). - What is the statute of limitations for wage claims?
Five years. - What if payment is made outside the bank when it is legally required?
For employers subject to this requirement, it constitutes a violation of the law.
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.
