![Business World Waits for Increasing Government Aids Business World Waits for Increasing Government Aids](https://www.textotex.com/en/application/static/data/news/100x82/1455724290_asgari-logo.jpg)
After the minimum wage was increased to 1300 Turkish Liras within the 2016 Action Plan of the government, Süleyman Soylu, Minister of Labour and Social Security, said that they would provide support to 40 % of the costs of the employers. With the new arrangement, the total cost of an employee to the employer reaches 1.933 Turkish Liras. Accordingly, the treasury will give 110 Turkish Liras which corresponds to 25 % of the additional cost. This arrangement covers 8.5 million insured individuals out of 12.5 million individuals in total. The aid that the employer will receive will be reduced from the premiums to be paid to the Social Security Institution and the total aid cost will be transferred from the Treasury to the Social Security Institution.
Çağlar, “Incentive Should Be Applied to All 12.5 Million Employees”
Various suggestions were offered from the business world with respect to the government aid to be made to the employers for minimum wage as well. İbrahim Çağlar, Chairman of İstanbul Chamber of Commerce (İTO), reminded that the government will offer an incentive of 100 Turkish Liras for the employees with gross salaries up to 2.500 Turkish Liras with the aim of sharing the burden concerning the minimum wage and added that, “Despite this, 65 % of the additional cost of a minimum wage worker is under the responsibility of the employer. We want this incentive for minimum wage to be applicable to all 12.5 million employees so that informal labour does not increase, employment does not decrease and we can protect our competitive power.”
Tanrıverdi; “Costs May Lead to Serious Problems for the Employer”
Hikmet Tanrıverdi, Chairman of İstanbul Ready Wear and Apparel Exporters’ Association (IHKIB), made assessments for the minimum wage issue in his explanation concerning the 2016 performance of the ready wear sector and stated that, “Another important factor expected to affect the 2016 performance of the ready wear sector is minimum wage. The fact that the net minimum wage became 1300 Turkish Liras with an increase of 30 % as per the 2016 program of the government may increase the motivation of the workers by improving their economical and social situations but I think that it will lead to serious problems for the employers. With this increase, the total cost of an employer per employee will be about 1950 Turkish Liras. Beside this, those earning above the minimum wage will demand increases as well. I believe that these two factors will create an excessive cost pressure on the employer.”
Stating that another point that will be problematic for the enterprises will be the increasing seniority indemnities as a result of the increases in the minimum wage and other salaries, Tanrıverdi added that, “Seniority indemnities are already a serious problem for the firms. They will become an even bigger problem with the increases in the wages especially for the small and medium sized enterprises.”