Is an Employer of Record Lawful in Türkiye? Article 7 of the Labour Act and Its Hard Limits

It knows the temporary employment relationship under Article 7 of the Labour Act No. 4857 — available through an İŞKUR-authorised private employment agency on closed grounds and short clocks, or inside a group of companies. Everything outside that is characterised on its facts.

Turkish law does not use the term “employer of record”, and there is no licence category with that name. The closest structure the legislation recognises is the temporary employment relationship (geçici iş ilişkisi) in Article 7 of the Labour Act No. 4857, and Article 7 permits it in only two forms: through a private employment agency authorised by the Turkish Employment Agency (İŞKUR), or by assigning a worker within a holding company or to another workplace belonging to the same group of companies. An EOR proposal for Türkiye is therefore lawful only to the extent that it fits inside one of those two routes — and most cross-border EOR arrangements are used for precisely the thing Article 7 does not allow: filling an ordinary, open-ended role for years.

This matters because the search results a foreign head office sees on this question are almost entirely written by providers selling the service. The statutory position is narrower than the marketing, the clocks are shorter, and the sanction for getting it wrong lands on the client company as well as the intermediary.

What Turkish Law Actually Recognises

Article 7(1) is the gateway, and it is exhaustive on its face: a temporary employment relationship “may be established through a private employment agency, or by way of an assignment within a holding company or at another workplace belonging to the same group of companies.” Nothing else in the Labour Act creates a third route.

The agency route requires two things at once. First, the agency must be authorised by İŞKUR — not merely licensed to do recruitment intermediation, but separately authorised to establish temporary employment relationships. Second, the arrangement must fall within one of the seven grounds set out in Article 7(2):

Read the list once and the gap is obvious. There is no ground for “we want a permanent country manager and would rather not incorporate.” A role that is ordinary, ongoing and central to the business does not sit inside grounds (d) to (g), and grounds (a) to (c) are narrow substitution and sector categories. This is the single most important point for a foreign employer weighing an EOR quote, and it sits one step above most of the questions that surface later on the labour and employment side.

The group route in Article 7(15) is different in character and often overlooked. Where an employer transfers one of its own workers, having taken the worker’s written consent at the time of transfer, to perform work within a holding or at another workplace of the same group, a temporary employment relationship also arises. It may be established in writing for no more than six months and renewed at most twice. The transferring employer’s obligation to pay wages continues, and the receiving employer is jointly liable with it for unpaid wages, the duty of care towards the worker and social insurance premiums for the period the worker spends there. This route presupposes an existing Turkish workplace inside the group — which is exactly what a company with no entity does not have.

The Hard Limits: Clocks, Quotas and Prohibited Workplaces

Where the four-month clock applies, Article 7(3) allows the supply contract to be renewed at most twice and never beyond eight months in total. The sentence carries an express carve-out for ground (g) — it reads that the contract “may be renewed at most twice, excluding subparagraph (g) of the second paragraph, provided it does not exceed eight months in total” — and the scope of that carve-out is read in more than one way, so a ground (g) arrangement is best planned on the four-month figure unless the position has been checked for the specific case. The paragraph then closes a workaround: at the end of that period, the user employer may not engage a temporary worker again for the same job until six months have passed.

Several workplaces are off limits under Article 7(4). A temporary employment relationship on the agency route cannot be established for eight months in a workplace that has carried out a collective dismissal under Article 29, nor at all in public institutions and organisations or in underground mining workplaces. Article 7(5) adds that temporary workers cannot be used during a strike or lockout, subject to Article 65 of the Unions and Collective Bargaining Act No. 6356. A shorter but effective bar sits in Article 7(7): an employer may not take back a worker whose employment contract it terminated as a temporary worker until six months have passed from the termination.

There is also a headcount cap, but only for ground (f): Article 7(6) limits temporary workers to a quarter of the workers employed at the workplace, with an express exception allowing up to five temporary workers in workplaces employing ten or fewer. Part-time workers are converted to full-time equivalents for that calculation, and temporary workers are not counted towards either party’s headcount for the purposes of Article 30.

Two further limits shape what the contracts can say. Article 7(10) requires that the temporary worker’s basic working conditions at the user’s workplace not fall below what the same employer would provide for direct employment in the same job — an equal-treatment floor that undercuts any pitch based on cheaper terms. And Article 7(11) forbids clauses that stop the worker from taking services from İŞKUR or another agency, or from working for the user employer afterwards; the employment contract must also state how long the worker may go without being called to work before terminating for just cause, and that period cannot exceed three months.

Article 7(11) states it plainly: in a temporary employment relationship, the employer is the private employment agency. The relationship is built from two written contracts — an employment contract between the agency and the worker, and a supply contract between the agency and the user employer — and the supply contract must specify its start and end dates, the nature of the work, the agency’s service fee and any special obligations of either side.

Whoever carries the employer title, the registration duty is unforgiving. Under Article 8(1) of the Social Insurance and Universal Health Insurance Act No. 5510, the insured-person commencement notification must reach the Social Security Institution before the start of insured employment, with narrow exceptions for construction, fishing and agricultural workplaces and for workplaces filing a first workplace declaration. Article 102(a) of the same Act sets the price of missing it at one minimum wage per insured person, two minimum wages where the omission emerges from an inspection or a court finding, and five where it is repeated within a year — which is why an arrangement that leaves it unclear who registers the worker is a problem before any court ever characterises it.

What Breaching Article 7 Actually Costs

The most expensive consequence is not a fine. Article 7(13) provides that where the temporary employment relationship continues despite the expiry of the term stated in the contract, an indefinite-term employment contract is deemed to have been established between the user employer and the worker as from the date the contract ended. The next sentence then confines the agency’s exposure: it remains liable for wages arising from the temporary employment relationship, the duty of care and social insurance premiums, but limited to the contract period. In other words, the client company that let the arrangement run on acquires a Turkish employee by operation of law, with all the severance, notice and job-security consequences set out in our guide to employing staff in Türkiye as a foreign employer.

Administrative penalties sit alongside that. Article 99(b) of the Labour Act imposes a per-worker fine on the employer or employer’s representative that engages temporary workers contrary to the principles and obligations in Article 7, and the final paragraph of Article 99 applies that fine fourfold where Article 7(2)(f) — the ground on which the quota operates — is breached. Under Article 20 of the Turkish Employment Agency Act No. 4904, a person or company that arranges a temporary employment relationship without İŞKUR authority — or after its authority has been revoked — is fined, doubled on repetition, and the employers that received the service in that framework are fined separately. The same structure applies in Article 20(a) to unauthorised recruitment intermediation. These are nominal figures set in 2016 that are revalued annually, so the current amounts come from the relevant year’s revaluation rather than from the text of the Act; the point is the exposure, not the number. Article 20 also provides that an appeal does not suspend collection.

Finally, characterisation risk runs underneath all of this. Article 2 of the Labour Act provides that where a principal–sub-contractor relationship is found to rest on a simulated transaction, the sub-contractor’s workers are treated as the principal employer’s workers from the outset, and Article 3 gives labour inspectors the power to make that finding, with a thirty-working-day window for the employers to challenge the report before the labour court. Outside sub-contracting, the framework the law provides for supplying workers is Article 7: a temporary employment relationship may be established through a private employment agency, or by assignment within a holding or to another workplace in the same group of companies, and on the agency route the employer is the agency; the name given to the contract does not change that framework.

Checking the Provider, Not the Pitch

Because the client is exposed in its own right, the authorisation question is not due diligence theatre. Article 17 of Law No. 4904 separates two permissions. The first is the intermediation licence, granted on conditions that include a suitable workplace or website, qualified staff, trade or artisan registry records, and security equivalent to twenty times the gross minimum wage. The second is the authority to establish temporary employment relationships, which is granted only to an agency already registered with İŞKUR that has operated without interruption for two years, has a favourable inspection report, has no outstanding debts to the tax office or the Social Security Institution, and lodges security equivalent to two hundred times the gross minimum wage. A six-month track record can suffice where the Ministry approves and double that security is lodged. Both permissions run for three years, renewable in three-year periods where the request is made at least fifteen days before expiry.

Article 17 also states that intermediation and the establishment of temporary employment relationships may not be carried on without İŞKUR permission, whether at a workplace or through press, broadcast, internet or electronic communication channels, and that advertisements for unauthorised providers may not be published. Article 18 makes unauthorised temporary-work activity an express ground for revoking an agency’s licence. The practical question to put to any provider is therefore narrow and answerable: show the current İŞKUR authority for the temporary-work activity itself, with its expiry date — not the company registration, and not a general services licence.

The Presence Question Nobody Prices In

An EOR arrangement is usually sold as a way to avoid a Turkish presence. It does not necessarily achieve that, because presence for tax purposes is defined by activity rather than by whose payroll runs the salary.

Under Article 3(2) of the Corporate Tax Act No. 5520, a company whose statutory and business centres are both outside Türkiye is a limited taxpayer, taxed on income derived in Türkiye. Article 3(3)(a) then captures business profits derived by non-resident companies that have a workplace in Türkiye within the meaning of the Tax Procedure Act No. 213, or that maintain a permanent representative there, from work done at those places or through those representatives. Article 156 of Law No. 213 defines the workplace broadly — offices, administrative premises, branches, warehouses and other places allocated to or used in a commercial activity — and Article 8 of the Income Tax Act No. 193 defines the permanent representative as a person bound to the represented party by a service or agency contract and authorised, for a definite or indefinite period or for multiple commercial transactions, to act in its name and account.

Read together, these provisions mean a Türkiye-based salesperson negotiating and closing deals for a foreign parent can raise a permanent-representative question regardless of which entity issues the payslip; any applicable double taxation treaty then has to be read alongside them. The mirror-image point is that a liaison office is not a workaround either: Article 3(h) of the Foreign Direct Investment Act No. 4875 permits a liaison office only on condition that no commercial activity is carried on in Türkiye. Where the real plan is revenue-generating activity with staff, the comparison worth running is the one set out in our guide to choosing between a liaison office, a branch and a subsidiary in Türkiye.

Where That Leaves a Foreign Head Office

For a genuinely short, genuinely exceptional need — cover for an employee on suspended contract, an unforeseen capacity spike, urgent safety work — the agency route is available, and using it properly means an İŞKUR-authorised agency, a ground identified in writing, a diarised expiry date and equal basic working conditions. For a group with an existing Turkish workplace, the Article 7(15) assignment is a real option within its six-month, twice-renewable frame, subject to written consent and joint liability.

For an ordinary, ongoing hire, neither route fits, and the question stops being “which EOR” and becomes “which structure”. That is a decision about entity form, tax exposure and the terms the first contract will carry — the drafting questions set out on the employment contracts page, and better taken before an offer letter goes out rather than after a labour inspector or a departing employee raises the point. Article 7(13) does not require anyone to have acted in bad faith; it operates on the calendar alone. One clause survives every structure and deserves drafting on its own terms: confidentiality. Article 396/4 of the Code of Obligations imposes a duty of loyalty without requiring a written clause, but the clause is what proves the employee knew the information was treated as secret — the point developed in trade secret protection in Türkiye.

This article states the law as at September 2026 and is general information, not advice on any particular arrangement. Administrative fine amounts and security thresholds under Law No. 4904 are indexed and revalued, so current figures must be checked against the applicable annual determination.