Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.
For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.
For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.
As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.
While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.
A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.
Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Turkey can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Turkey, you have to:
If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Turkey.
An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.
An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.
Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.
At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.
Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:
Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.
Paying employees in Turkey is not the same as paying workers in your own country. Employees have to be paid using Turkey’s employment and payroll standards.
This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.
Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.
After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:
One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.
Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.
Outside of EORs acting as the full admin employer, many also provide remote payroll.
For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.
We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.
A workweek is 45 hours. Hours can be distributed unevenly over the work days provided no single day lasts longer than 11 hours.
Hours worked over 45 in a week are overtime and paid 150% of a regular salary. Hours worked during the weekend are paid at 200%.
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The minimum wage is 2,826 Turkish liras.
The payroll cycle is monthly.
There is no 13th salary.
Paid time off increases with seniority:
14 days for those with 1-5 years’ service.
20 days for those with 6-14 years’ service.
26 days for those with 15+ years’ service.
Employees over 50 automatically get 20 days. Those who work underground get an additional 4 days to their level of service.
There are 14 public holidays per year.
There is no mandatory obligation for the employer to pay the employee salary during sick leave. After 3 days of sick leave, the Social Security will pay the employee. In practice, many employers pay regular salary for the first 2 days (which are not covered by the SS) or even for the entire period of sick leave (and get partial refund when paid by SS). After 6 weeks of sick leave, the employer is entitled to terminate the employee’s employment.
Working mothers are entitled to up to 16 weeks of maternity leave at full pay. Up to 8 weeks out of this leave may be used prior to their child’s birth. At least 3 weeks must be taken before the due date. In the case of premature or multiple births, the total maternity leave will be 18 weeks. Payment during maternity leave comes from social security according to the regular contributions of the employee.
The father is entitled to 5 days of paternity leave.
During paternity leave the employee receives regular salary, paid by the employer.
3 days, subject to presenting an official approval of marriage date.
3 days, with respect to losing a close relative such as parent or child.
There is an obligation to provide a reason for terminating an employee’s employment.
The reason must relate to the capacity or conduct of the employee or based on the operational requirements of the undertaking.
There are exclusions to such obligations, including:
Fix term contract; employees who worked less than 6 months; an employer who employs less than 30 employees; employer’s representatives and his assistants authorized to manage the entire enterprise. In such cases no need to provide a just reason for dismissal, but the employer is still obligated to avoid abusive or discriminating dismissal.
Notice is determined by seniority:
0 – 6 months 2 weeks
6 – 18 months 4 weeks
18 – 36 months 6 weeks
More than 36 months 8 weeks
Generally, employees who worked more than 1 year and were unfairly dismissed (or resigned due to just cause) are entitled to severance pay. The maximum amount of such payment varies according to the specific salary and up to the amount of 6,730.15 TRL per annum (for 2020), multiplied by the number of years that the employee worked for the employer.
The probation period is limited to 2 months.