Unregistered employment in Turkey refers to the phenomenon where individuals work in the informal economy, without being officially registered with the government. This can include working in jobs that are not regulated by labour laws, or being paid “off the books” by employers to avoid paying taxes and contributions to social security. Informality can be in the form of working dependent to an employer or working on his/her own name independently.
People with unregistered employment are not registered with the Social Security Institution as the governing body of the Turkish social insurance regime, and they cannot be able benefit from the rights provided by the Social Security Institution (SSI).
Within a general perspective, as a part of the bigger problem of informal economy, the problem of unregistered employment can lead to a number of issues, such as lack of access to benefits and protections for workers, difficulty in enforcing labour laws, and difficulty in accurately measuring the size and growth of the economy.
Additionally, informality in employment can lead to a loss of revenue for the government from unpaid taxes and contributions to social security. Turkish Social Security Institution is aiming to decrease the rate of informality as to increase its premium revenues and to ensure a sustainable social security budget.
The informal economy also make it harder for the government to track the employment rate and make economic predictions in the country.
Although the informal employment rate was higher than 50 percent in Turkey in the early 2000s, with the efforts of the Social Security Institution, especially, with the extending inspections and audits in the enterprises, this rate has been reduces to approximately 30 percent in the last decade. According to the official figures of TurkStat unregistered employment rate is approximately 34 percent as of 2022. The informality is not distributed equally amond different sectors and regions. While the informality is lower (around 10 percent) in other economic sectors and in metropol cities, informality in the agricultural sector is around 85 percent. Additionally, while the informality is relatively lower in the metropolitan cities it is higher in the rural areas of the country and in the underdeveloped Southeastern Regions of Turkey.
In sum, the term informal employment refers to the phenomenon where individuals work in the informal economy, without being officially registered with the government. Turkish economy has a high rate of informal employment. Despite significant decreases in the informality rate in the recent two decades due to extending inspections and audit, the country still has 34 percent informality rate.
