Use Of Company Vehicles By Persons Who Are Not Employees Of The Company

It is widely known that, in recent traffic inspections, controls integrated with the Social Security Institution (SSI) system regarding company vehicles have significantly intensified. When company vehicles are found to be used by individuals who are not employees of the relevant company during traffic inspections, this situation may give rise to a legal suspicion of "unregistered employment," and administrative sanctions may be imposed by the SSI.

Following the extensive media coverage of this issue in recent times, a public perception has emerged suggesting that a new legislative regulation has been introduced in this regard. However, the existing practices and legal regulations concerning this matter have long been in force, and no new legislative amendment or regulation has been enacted.

How Does the Process Operate in Practice and What Is the Legal Basis of the Inspections in This Regard?

This may be summarized as follows:

Articles 8/7, 11/6, and 100 of Law No. 5510 on Social Insurance and General Health Insurance authorize and oblige public administrations and other relevant institutions to verify the insurance status of the persons with whom they conduct transactions and to notify the Social Security Institution (SSI) in cases where uninsured employment is detected.

Based on this statutory framework, the "Regulation on the Procedures and Principles Regarding the Insurance Status Checks to Be Carried Out by Banks and Public Administrations and the Obtaining of Information and Documents from Institutions and Organizations" was published in the Official Gazette dated 6/12/2013 and numbered 28843. Subsequently, pursuant to Article 16 of the said Regulation, the "Communiqué on the Insurance Status Checks to Be Carried Out by Banks and Public Administrations and the Information and Documents to Be Obtained from Institutions and Organizations" was issued and entered into force as of 1/8/2014. Thereafter, the Presidency of the Social Security Institution issued Circular No. 2015/25 titled "Combating Informal Employment."

Under the aforementioned Circular, during traffic inspections of company vehicles used for commercial purposes, it is envisaged that the driver's status as an insured employee of the relevant company be verified in real time through SSI integration. Accordingly, if, during a traffic inspection, the driver operating a commercial company vehicle is not an insured employee of the company that owns the vehicle, such situation is reported to the Social Security Institution on the grounds of a suspicion of "unregistered employment."

Although such detection and notification do not, in themselves, constitute conclusive proof of uninsured employment, they give rise to a suspicion of unregistered employment before the Social Security Institution (SSI), and it is known that an inspection process is consequently initiated. In practice, the SSI conducts investigations by taking into account the reports issued during traffic inspections and may request explanations from legal entities. Depending on the specifics of the case, the SSI may also proceed by directly notifying the employer of the obligation to submit employment entry notifications and premium accrual declarations with respect to the driver who is determined, based on the report, not to be a registered employee of the company.

In the event that the SSI deems the driver to be an employee of the company, the employer may face risks such as administrative fines, ex officio premium assessments, and delay penalties on the grounds of failure to submit the employment entry notification, failure to file the monthly premium and service declaration, and the employee's absence from the payroll. It should also be noted that the employment of uninsured personnel may result in the cancellation of any incentives or subsidies previously benefited from and their retroactive reimbursement.

In conclusion, the use of company vehicles by persons who are not insured employees of the workplace constitutes a risky practice within the scope of the existing legal framework. Although no recent legislative amendment has been introduced, the issue has become increasingly critical in light of intensified inspections.

Undoubtedly, insurance status is a matter of public order, and it is well established that, even in potential disputes, judicial authorities are not confined solely to the evidence submitted by the parties and may, where necessary, conduct ex officio investigations in order to ascertain the material truth. The objective is not, and should not be, the registration of employment that does not actually exist. In this context, any registration or premium accrual initiated by the SSI solely on the basis of traffic inspection reports regarding a non-existent employment relationship may always be challenged. Indeed, case law indicates that determinations based exclusively on traffic reports may, in certain instances, be regarded as an "incomplete examination." Nevertheless, rather than assuming evidentiary risks in potential disputes, ensuring legal compliance and updating internal company policies and procedures should be regarded as the primary course of action in all circumstances.

Within this framework:

• It should be ensured that company vehicles are used exclusively by persons who have a legal relationship with the company; it must be borne in mind that allowing the use of such vehicles by other individuals may give rise to a suspicion of unregistered employment and trigger inspections by the Institution, as explained above.
• A written policy governing the use of company vehicles should be established, clearly specifying who is authorized to use the vehicles and under what conditions. As a matter of priority, preventive measures should be taken to mitigate risks arising from potential misuse.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.