Minimum labour review: the SGK difference in construction and tendered work
The SGK minimum labour practice: which work it applies to, minimum labour ratios, private building construction, tendered work, the clearance certificate, notification of the labour difference and objections.
In a building construction or a job undertaken through a public tender, it is hard to establish afterwards how many workers worked and for how many days. SGK therefore uses the minimum labour method: depending on the nature of the work, a certain proportion of the total cost is accepted as labour, and premiums are expected to have been reported on at least this amount.
Which work does it apply to?
- Private building construction (work for which a building permit is obtained),
- Construction, service and supply work tendered by public administrations,
- Construction, renovation, installation and similar work tendered by the private sector,
- Maintenance, repair and renovation of buildings and facilities.
The process step by step
| Step | What happens? |
|---|---|
| 1. Registration | A separate workplace file is opened at SGK for the job |
| 2. Reporting | Workers during the job are reported from this file |
| 3. Completion | When the job ends, SGK is notified; documents (contract, progress payments, invoices) are submitted |
| 4. Calculation | SGK applies the minimum labour ratio for the type of work to the cost of the job |
| 5. Comparison | The minimum labour calculated is compared with the premium-based earnings reported from the file |
| 6. Result | If there is a shortfall, the labour difference is notified to the employer |
Minimum labour ratio
The ratios are set by type of work in SGK's table of minimum labour ratios. For example, the ratio for a reinforced concrete building differs from that for renovation work dominated by finishing work. In private building construction, the cost is found on the basis of the approximate unit construction costs for the relevant year and the construction area.
Example logic (figures are illustrative):
| Amount | |
|---|---|
| Cost of the job (excl. VAT) | TRY 10,000,000 |
| Minimum labour ratio (illustrative) | 9% |
| Minimum labour that should be reported | TRY 900,000 |
| Premium-based earnings reported from the file | TRY 600,000 |
| Labour difference | TRY 300,000 |
The premium calculated on the labour difference is claimed together with a late payment penalty and late payment interest. Approximate calculation for your own job: Minimum labour calculator
Situations that reduce the difference
- If part of the job was given to a subcontractor and the subcontractor reported to SGK, the subcontractor's reports are taken into account.
- Costs of machinery and equipment used on the job, invoiced ready-made materials and purchases without labour can be deducted from the cost if documented.
- Work done and documented from another workplace can be taken into account.
Keeping contracts, subcontractor records and invoices in order from the start of the job therefore directly affects any difference that arises later.
Clearance certificate
In tendered work, the administration asks for a clearance certificate from SGK before paying the final progress payment and returning the guarantee. The certificate is issued after the minimum labour review is complete and any difference has been paid. In some cases a portion of progress payments is held back for this purpose.
If a difference is notified
- Check the calculation in the notification and whether the type of work and ratio were chosen correctly.
- Submit in full the documents that can be deducted (subcontractor, material invoices).
- Object to SGK within the deadline; if the objection is rejected, the courts are available.
- Plan payment or the deferral option for the difference you accept: SGK premium debt
Legal basis: Law No. 5510 art. 85; Social Insurance Procedures Regulation; SGK circulars on the minimum labour practice.