Employer of Record in Türkiye: Between the Promise of Flexibility and the Reality of Employment Law

EOR models are not a freely available employment model in Türkiye. This article explains the legal limits, risks and permissible forms of employee leasing.

Table of contents

• Why is “EOR” being discussed so frequently right now?
• What does “EOR” mean – and what is the legal reality in Türkiye?
• Which legal models are even available in Türkiye?
• What is a legally compliant model through licensed temporary employment agencies?
• Under what conditions may employees be leased by temporary employment agencies?
• Which statutory limits must be observed?
• What happens in the event of incorrect implementation?
• Occupational health and safety and workplace accidents: what cannot be “delegated away”?
• Does work permit law also apply to foreign employees?
• Where do additional tax and structural risks arise?
• Conclusion

Why is “EOR” being discussed so frequently right now?

International companies often want to deploy personnel in Türkiye quickly, even before establishing their own company or branch office. Many providers advertise Employer-of-Record models with the promise of being able to employ staff at short notice “without a local company”. From a Turkish perspective, however, the term “EOR” is not decisive; what matters is the specific legal and factual structure of the model. Accordingly, the label is not decisive, but rather whether the chosen structure fits within a legally recognised framework.

What does “EOR” mean – and what is the legal reality in Türkiye?

Internationally, “Employer of Record” is generally understood as a model in which a local service provider formally acts as the employer, in particular assuming responsibility for the employment contract, payroll and administrative HR processes, while the commissioning company operationally manages the relevant person and integrates them into its day-to-day work. Under Turkish law, however, such a structure is not permissible merely because it is contractually designated as “EOR”. Rather, what is decisive is whether the actual implementation can be classified as permissible temporary employee leasing under Article 7 of Turkish Labour Law No. 4857, or whether it constitutes a genuine, independently organised service without employee leasing.

Which legal models are even available in Türkiye?

In essence, Turkish employment law provides for two statutory routes for temporary employee leasing: first, temporary employment through a personnel service provider authorised by the Turkish Employment Agency, İŞKUR, i.e. a licensed private temporary employment agency; and second, intra-group temporary employee leasing within a holding company or group of companies. In the case of intra-group temporary employee leasing, the employee’s written consent is required; as a rule, the leasing may be agreed for a maximum period of six months and may be extended no more than twice. The obligation to pay remuneration remains with the lending employer; the borrowing employer is jointly liable for certain claims.

What is a legally compliant model through licensed temporary employment agencies?

In the case of legally permissible temporary employment through a licensed private temporary employment agency, the temporary employment agency remains the formal employer of the temporary employee. An employment contract is concluded between the temporary employment agency and the employee; a written agreement on the leasing of the temporary employee is concluded between the temporary employment agency and the user undertaking. Within this framework, the user undertaking has a legally recognised right to give instructions within the scope of the agreed assignment, but it does not have the status of the formal employer.

A legally secure setup also requires that a temporary employment agency actually authorised by the Turkish Employment Agency, İŞKUR, is engaged. İŞKUR publishes information on the application and approval process as well as lists of duly authorised temporary employment agencies. Anyone working with a provider should specifically verify its authorisation status in advance.

Under what conditions may employees be leased by temporary employment agencies?

Pursuant to Article 7 of Turkish Labour Law No. 4857, employees may only be leased in certain cases or areas of activity. Accordingly, temporary employee leasing is permissible in the following cases:

1. in the cases regulated under Article 13(5) of the Turkish Labour Law, in particular where an employee requests part-time employment after the expiry of maternity- or adoption-related leave periods until the child reaches compulsory school age; 
2. in the cases regulated under Article 74 of the Turkish Labour Law, in particular during the statutory maternity protection periods before and after childbirth, in the case of adoption-related leave, unpaid leave following maternity leave, and other leave rights related to childbirth and breastfeeding; 
3. during the employee’s military service; 
4. in other cases where the employee’s employment contract is suspended by operation of law or for another statutory reason; 
5. for seasonal agricultural work; 
6. for household services; 
7. for work that does not form part of the employer’s ordinary daily activities and arises only temporarily; 
8. for work that is urgent for reasons of occupational health and safety, or in the event of compelling reasons that significantly affect production; 
9. in the event of an unforeseen increase in workload; 
10. in the case of periodically recurring, time-limited increases in work, with the exception of seasonal agricultural work. 

These categories are not merely a non-binding list of examples, but the statutory framework within which employee leasing is permissible.

Which statutory limits must be observed?

For the cases listed above under items 1 to 4, the agreement on the leasing of temporary agency workers may be concluded for as long as the respective statutory reason continues to exist.

In the cases listed under items 5 and 6, i.e. seasonal agricultural work and household services, there is no statutory maximum duration.

In the cases listed under items 7 to 10, the agreement on the leasing of temporary agency workers may be concluded for a maximum period of four months. In the cases listed under items 7 to 9, the agreement may be extended no more than twice, provided that the total duration does not exceed eight months. In the case of item 10, however, an extension is excluded.

After the expiry of the respective permissible leasing period, the employer that has employed temporary agency workers may only use temporary agency workers again for the same activity after six months have passed; in other words, a six-month waiting period applies before a temporary worker may again be used for the same position.

Additional restrictions also apply by operation of law: In workplaces where a collective dismissal within the meaning of Article 29 of the Turkish Labour Law has taken place, such leasing is excluded for eight months. It is also not permitted in public institutions, in underground mining, or during strikes and lockouts. For the category of an unforeseeable increase in capacity, an additional 25 percent limit generally applies in relation to the number of employees employed at the workplace; in small workplaces with up to ten employees, up to five temporary workers may be used.

What happens in the event of incorrect implementation?

A key risk lies in impermissible employee leasing or in exceeding the permissible assignment period. The law expressly provides that, if the assignment continues beyond the contractually permissible period, an indefinite-term employment contract with the user undertaking is deemed to have been established. This is a significant legal consequence in practice and shows that the time limits and structural requirements are not merely formal side issues.

In addition, the basic working conditions of the temporary employee during the assignment must not be less favourable than the conditions that would apply to the same work if the employee were directly employed by the user undertaking. Social benefits at the place of assignment must also be granted in accordance with the law from an equal treatment perspective.

Occupational health and safety and workplace accidents: what cannot be “delegated away”?

Even in the case of legally permissible temporary employment, essential obligations remain with the user undertaking. Article 7 of the Turkish Labour Law requires the user undertaking, in particular, to notify workplace accidents and occupational diseases without delay to the authorised temporary employment agency and to report them to the competent authorities in accordance with social security regulations. In addition, the user undertaking must ensure the training provided for under Article 17(6) of the Occupational Health and Safety Law No. 6331 and take the necessary occupational health and safety measures.

With regard to general accident reporting, a workplace accident must also be notified to the competent authorities without delay and, as a rule, to the Turkish Social Security Institution no later than within three working days. Occupational health and safety is therefore clearly not an area that can be fully shifted through outsourcing or by engaging a payroll service provider.

Does work permit law also apply to foreign employees?

Yes. An EOR model does not replace the assessment of Turkish work permit law. For foreign employees, it must be examined separately whether a work permit or, by way of exception, an exemption from the work permit requirement is necessary. The Turkish authorities expressly clarify that a mere residence permit generally does not grant the right to take up employment. Likewise, exemptions are only available in certain cases regulated by law.

Depending on the specific circumstances, further assessment criteria for the work permit may also become relevant, such as labour market-related and company-related criteria. Anyone planning an international hiring model should therefore not treat EOR issues and the law on the employment of foreigners separately.

Where do additional tax and structural risks arise?

If a foreign company effectively deploys personnel in Türkiye on a permanent basis for its market activities, additional questions regarding taxable presence may arise. Under Turkish tax law, the existence of a permanent establishment and a permanent representative plays a particularly important role in this respect. Whether this actually gives rise to a taxable permanent establishment or other tax consequences always depends on the specific structure and activity, especially in cases involving external representation, customer contact, contract negotiations or authority to conclude contracts. This is therefore not an automatic effect of every EOR model, but it is a key area to be reviewed.

Conclusion

“Employer of Record” is not an independent statutory term in Türkiye and is not a shortcut for arbitrarily flexible personnel recruitment. Such a model is legally viable only if its actual implementation fits within a recognised legal framework – in particular, temporary employment through a temporary employment agency authorised by İŞKUR or an intra-group, time-limited assignment in compliance with the statutory requirements.

As a mere “payroll solution”, where a person is formally listed on the payroll of a local service provider but is in fact permanently deployed like the client’s own employee, the model is regularly vulnerable to legal challenge in Türkiye. Anyone wishing to operate in the Turkish market on a long-term basis should therefore assess at an early stage whether establishing their own local structure would be the legally safer and economically more sensible solution. For a short, clearly limited transition phase, a bridging solution may certainly work — provided that it remains within the applicable legal framework.

As GEMS Schindhelm, we would be pleased to assist you with a structured initial assessment of your planned hiring solution in Türkiye.