FAQ

Frequently asked questions

PEO (Professional Employment Organization) service is a functional contractual arrangement between a PEO and its client, whereby they share the rights and responsibilities of a hired employee. While it is important to note that the employee works directly for the client company, not for the PEO, and all financial responsibilities belong to the client company.

 

The PEO acts as a co-employer, which means that they share the responsibility for the employees. They will provide many necessary HR services, but decisions regarding hiring, termination, and compensation are left to the client employer. Suppose the client employer’s employee is in Turkey. In that case, PEO will also assist with the country’s compliance, which is important when hiring in a country like Turkey, where the client is not aware of employment laws and regulations.

 

PEO service process is progressing in Turkey as follows:

 

  • The client employer chooses the local or foreign candidate or trusts to the PEO company to help the client employer to find the right local talent via the PEO company’s Recruitment and Head-hunting Service.
  • The PEO company hires the chosen employee in its payroll and takes care of the employment contract(fixed or indefinite term), job offer letters, side benefits, work permit requirement (if the employee is a foreigner) and permanent payroll requirements, human resources, taxation, accounting, and compliance.
  • Thanks to the PEO company’s local expertise, the PEO company ensures that the needs of the client company’s employees are met promptly while the client company aware of what is legal, competitive, and customary in Turkey.
  • A well-established relationship with local benefits agents enables the PEO company to assure a range of benefits to the client employer’s employees, even with a small staff.
  • The client employer’s employees immediately start working directly with the client company, just as if they were on its payroll.
  • After this stage, the client employer can only focus on its growth in the Turkish Market! The PEO company will be in constant communication with the relevant departments and people (Finance, Accounting, HR, and Sales) in the client company and share relevant reports.

This scheme has clear benefits for the client employer, as it allows the client employer to keep its clients and business needs at the top of its priorities. In addition to this objective, the client employer benefits in four areas by taking advantage of a local PEO service in Turkey:

 

  • Flexibility: PEO service allows client employers to hire full-time employees (not contractors) without risk and no need to create a legal entity in Turkey. Rather than trying to manage the complexity of Turkey’s subcontracting limitations, PEO service allows companies to hire employees who can do the work, creating a stronger working relationship and more stability than a stream of temporary workers could provide.
  • Country knowledge: One of the biggest challenges for client employers is understanding local customs, culture, and legal requirements. ERAI Turkey’s professional employer organization (PEO) facilitates your expansion throughout Turkey, optimizing employment tasks while ensuring full and up-to-date compliance with local labor regulations.
  • Lower-Cost: The incorporation of a local entity in Turkey is a challenging and costly process. The PEO service allows employers to hire local employees without the expense and hassle of incorporating a permanent local entity.
  • Time-Saving: The PEO service allows the client employer the opportunity to exceed the competition, putting employers in place in a fraction of the time it would take to hire by more traditional means.

The nine benefits of choosing the PEO service of Erai Turkey can be summarized as follows:

 

  • Time-Saving Process: We manage everything for you so that you can focus on business growth and profitability.
  • Increased Speed in the Market: We speed up procedures and paperwork, so your local employees can work efficiently and generate revenue faster.
  • Streamlined Costs: We save you the cost and efforts of setting up a legal entity in Turkey to invest more resources in other areas.
  • Regulatory Compliance: We manage the tax and legal compliance in all laws and jurisdictions. Thus, you can deploy your business safely.
  • Risk-Management: We become the legal employer/ Employee of Record (EoR) of your staff, thus we take all risks abroad on behalf of you.
  • Reduced Responsibilities: We guarantee by contract that no hidden costs or unforeseen expenses will be invoiced so that you can succeed with peace of mind.
  • Local Knowledge: We take care of the formalities on-site; thus, you can settle into your new environment, respecting the local corporate culture and protocols.
  • Unique Expertise: We are the only consultancy origin company in Turkey that provides this service with a team of experts in HR, Payroll, Legal, Visa & Mobility to support you and your employees.
  • Your Data Is Secure and Well-Protected: Our company protects sensitive employee data following the local data protection law KVKK (GDPR).

Typically, there are three actors in the PEO service, and these are as follows:

 

  • The client company/client employer who uses a workforce capable of carrying out missions on Turkish territory and signs a PEO service contract with ERAI Turkey.
  • The PEO company/ Legal Employer/Employer of Record intervenes by having the employee sign an employment contract and guaranteeing the client company an excellent performance of its on-site activities.
  • The employee who signs a contract with the PEO company becomes an employee of the client company through the employment contract.

However, especially for projects involving foreign consultants, there are more actors in the PEO service, these are as follows:

 

  • Foreign consulting/ recruitment agency (The Client Employer) will recruit foreign consultants and assign them to Turkish companies’ projects.
  • Turkish client of the foreign consulting/recruitment agency who will receive the service of the foreign consultant for its projects.
  • The PEO company/ Legal Employer/Employer of Record, who will have a fixed-term employment contract with the Contractor Consultant and be legally responsible in front of the governmental institutions. Legal Employer, Erai Turkey, will sign an umbrella company/ PEO/ Payrolling Service contract with the main employer.
  • Foreign Employee-Contractor Consultant will work 100% for the client of the main employer.

Companies looking for one of the following alternatives instead of incorporating a company in Turkey can benefit from the PEO service of Erai Turkey:

 

  • Employ and deploy the foreign staff/ consultants to Turkey in to start their project quickly
  • Not to plan to have an appropriately incorporated entity in Turkey soon
  • Want to work within a defined budget
  • Want to limit the initial commitment in Turkey
  • Need for assistance with tax compliance, employment, work permit and payroll in Turkey

Prices will be variable as PEO companies generally provide tailor-made services. The cost of the service is determined by a commission rate to be calculated on the annual gross employment cost of the employee to be hired. However, in some cases, the PEO service fee can be determined as a fixed price instead of a commission rate.

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