Matters to Be Considered During Audits Conducted by the Social Security Institution
MATTERS TO BE CONSIDERED DURING AUDITS CONDUCTED BY
THE SOCIAL SECURITY INSTITUTION
Introduction
The Presidential Circular No. 2024/14 titled “Ensuring the Regular and Effective Conduct of Guidance, Inspection, and Audit Activities,” published on 26 November 2024 (the Circular), aims to identify problems and propose solutions in line with changing and developing conditions in the provision of public services. Within this framework, it is aimed to improve the quality of services provided by public institutions and to increase the effectiveness of audit activities.
With the Circular, the principles to be followed in inspections to be carried out on institutions subject to audit have been determined. This regulation is also an indication that the scope and frequency of audits of public institutions and organizations will expand and increase in the upcoming period.
In this article, within the scope of the state’s regulatory interventions in working life, the inspection activities carried out by the Social Security Institution (SSI) will be addressed in detail, including the preventive measures employers can take against SSI audits, the risks they may encounter during audit processes, and the steps they should follow.
SSI Audits at Workplaces
One of the most common reasons for audits conducted by the SSI is complaints made by employees or third parties. In addition, some other situations in which an SSI audit may be conducted are listed below:
- In case of a notice or complaint
- Work accidents and occupational disease cases
- Submission of retroactive declarations for periods earlier than three months
- Within the scope of works subject to minimum labor requirements
- Within the scope of SSI’s risk analysis-based inspections
- Within the scope of cross-checks conducted regarding unregistered employment
- Due to inspections and reports carried out by audit officers of other public institutions
- In other cases deemed necessary by the SSI
SSI officers assigned to audit and control are authorized, during on-site inspections, to freely enter all sections of the workplace and to take statements from employees. As a result of the audit, a workplace status determination report is prepared, including the identity information of employees, their employment start dates, and their net or gross wages, and bearing the signatures of the employee, employer, and audit officer. A copy of the report is delivered to the employer or the employer’s representative. In cases where difficulties are encountered during on-site inspections, SSI audit officers may request assistance from administrative authorities and law enforcement units. Therefore, it is essential to facilitate the inspection process and, when requested by authorized officers, to submit workplace records or request a period of time to present them.
Reports Prepared by the SSI
As a result of audits conducted by the SSI at workplaces, matters such as whether the workplace falls within the scope of the Law, the status of the workplace, its field of activity, the applicable activity code, and the determination of registered or unregistered employees are recorded in a “Status Determination Report” without examining the legal books and documents of the workplace.
In addition, a “Workplace Status Determination Report” is prepared and signed by the employer, employer’s representative, or workplace officials, as well as by the insured employees whose statements are recorded in the report, and a copy of the report is delivered to the employer, employer’s representative, or workplace official who signed it. If the inspection is conducted in the absence of the employer, employer’s representative, or workplace official, the report is signed by a registered employee listed in the monthly premium and service declaration or the withholding and premium service declaration, preferably the most senior one, or otherwise any listed employee, and a copy is delivered to the signatory.
Administrative Sanctions That May Be Imposed as a Result of the Audit
The risks and financial sanctions that employers may face as a result of SSI audits can be summarized as follows:
- Administrative fines
- Disqualification from employment incentives
- Loss and cancellation of minimum wage support
For this reason, it is of great importance that SSI audit processes at workplaces are carefully monitored and that necessary arrangements are made in a timely manner.
Administrative Fines Within the Scope of the SSI
The SSI may impose administrative fines on employers and insured persons found to be acting in violation of the obligations stipulated in the Law. Different penalties are prescribed in the Law for different acts, and these penalties are generally indexed to the gross minimum wage amount. Accordingly, with increases in the minimum wage, the administrative fines imposed by the SSI also increase.
According to the Law, acts arising from social security legislation that are subject to administrative fines can be broadly grouped as follows:
- Acts arising from employment entry and general health insurance entry declarations
- Acts arising from workplace declarations
- Acts arising from monthly premium and service declarations
- Acts arising from incomplete labor declarations
- Acts arising from the failure to submit books and documents or their invalidity
- Acts arising from the failure to submit information and documents requested for minimum labor practices in a timely manner
- Acts arising from the failure to make notifications regarding self-employed persons within the legal period
- Acts arising from the failure to make notifications regarding duty-related disability within the legal period
- Acts arising from the failure to notify employers awarded tenders
- Acts arising from the failure to notify uninsured persons
- Acts arising from the failure to make notifications regarding companies at the establishment stage
- Acts arising from the failure to make notifications regarding employment
- Acts arising from obstructing the duties of audit officers
- Acts arising from the failure to submit information and documents to the Institution within the scope of Article 100 of Law No. 5510
- Acts arising from the failure to submit termination declarations to the Institution
- Acts arising from the failure to make notifications regarding employees working in banks, insurance companies, chambers of commerce and industry, and stock exchanges
- Acts arising from the failure to timely enter information regarding dependents of general health insurance holders
- Acts arising from the failure to make notifications regarding drivers and artists
- Acts related to agricultural withholding (withholding tax) procedures
If payment is made within the 15-day objection period without objecting to or filing a lawsuit against the administrative fines imposed by the SSI, a discount of one quarter of the fine amount is applied under the advance payment discount. Advance payment does not affect the right to pursue judicial remedies against the administrative fine. If the administrative fine is not paid within the prescribed period, both the right to discounted payment will be lost and late payment penalties and interest will be applied until the date of payment.
Objection to Administrative Fines
Employers may object to administrative fines after payment or may directly object without making payment. The first authority for objection against administrative fines imposed by the SSI is the Institution itself. The objection period is 15 days from notification. Objection petitions should set out the grounds on which the fine is considered unjust and include any supporting evidence. Upon timely objection, enforcement proceedings are suspended.
Those whose objections are rejected may apply to the competent administrative court within 30 days from the notification of the rejection decision. If no lawsuit is filed within this period, the administrative fine becomes final, the institutional receivable becomes due, and enforcement proceedings are initiated.
Within the framework of administrative law, if it is determined that an unlawful administrative act has been carried out by the SSI, such act may always be revoked regardless of the time elapsed.
Conclusion
The right to social security is constitutionally guaranteed under Article 60 of the Constitution of the Republic of Türkiye and has been made mandatory by Law No. 5510. Being aware in advance of situations that may lead to SSI audits, taking preventive measures, and effectively managing audit processes are of critical importance in preventing potential administrative sanctions. In this context, the complete implementation of occupational health and safety procedures, the regular conduct of internal audits, and the timely fulfillment of legal notification obligations are of great importance.
Sincerely,
Atabay Law Office