ANTICIPATED MINIMUM WAGE INCREASE WILL BE ANNOUNCED IN JULY 2023
We would like to inform you that in accordance with the statements of relevant governmental units, as well as the high expectations in this respect, an increase in the minimum wage will be announced in the coming month of July.
Labor Code numbered 4857 (the “Code”) (in Turkish, “İş Kanunu”)envisages provisions in relation to the regulation of the minimum wage under the Turkish law system. As per its article 39, “With the object of regulating the economic and social conditions of all employees working under an employment contract, either covered or uncovered by this Code, the minimum limits of wages shall be determined every two (2) years at the latest, by the Ministry of Labor and Social Security through the Minimum Wage Fixing Board.”
In addition, Article 7 of the Regulation on Minimum Wage (in Turkish,“Asgari Ücret Yönetmeliği”) foresees that in determining the minimum wage, the living conditions and social and economic situation of the country shall be considered. In compliance with the Code, with the publication and the effectiveness of the Regulation amending the Regulation on Minimum Wage on 1 July 2022 (in Turkish, “Asgari Ücret Yönetmeliği’nde Değişiklik Yapılmasına Dair Yönetmelik”), the minimum wage will be determined every two years at the latest.
As you may recall from our Newsletter dated 4 July 2022, the net minimum monthly wage was TRY 5,500.35 (approximately Euro 315/ USD 325) and the total cost for the employer was TRY 7,603.43 (approximately Euro 435/ USD 450) between 1 July 2022 and 31 December 2022.
Afterwards, the monthly minimum wage of the employees between 1 January 2023 and 31 December 2023 was determined as gross TRY 333,60 pursuant to the Minimum Wage Determination Commission’s Decision dated 22 December 2022 and numbered 2022/2. Pursuant thereto, the net minimum monthly wage is TRY 8,506.80(approximately Euro 425/ USD 455 as per the foreign exchange rate valid on 22 December 2022) and the total cost for the employer is TRY 11,759.40 (approximately Euro 590/ USD 630 as per the foreign exchange rate valid on 22 December 2022) as from the date of 1 January 2023.
The Minimum Wage Determination Commission was convened for the first time on 13 June 2023 to discuss the minimum wage. The Commission is expected to determine the amount of the interim increase in July, taking into account the inflation figure for the first 6 months of 2023, which will be formed after the June inflation to be announced by the Turkish Statistical Institute (in Turkish, “Türkiye İstatistik Kurumu”) on 3 July 2023
Given that the costs of living soar at a considerable rate and the demand for an increase in the minimum wage is very high by the public, it was already anticipated that there would be an increase in the minimum wage in the coming July in Turkey. In this direction, there are various estimates between TRY 10,500 net and TRY 12,000 net for the increase in the minimum wage, which will be valid in the second half of 2023.
There should be noted that the increase of minimum wage of employees should also have an impact on other employees’ wages, which are above the minimum wage. Hence, it would be recommended for employers to consider an increase of wages for those employees in order to protect them against rising inflation, purchasing power, high living costs and so on.
Our Law Firm remains at your disposal for any further clarifications you may need.
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