Employment law in Türkiye is uniquely demanding: severance, notice, and dispute exposures compound quickly, and equity-based compensation introduces a second layer of complexity for venture-backed companies operating across Türkiye and the US. The Vircon Legal employment team advises founders, scaling startups, and multinational employers on the full employment lifecycle: from hiring through equity grants, restructurings, and exits.
Our Employment practice covers:
- Day-to-day employment counsel. Employment contracts, internal policies, performance management, disciplinary procedures, and dispute prevention strategies.
- Stock options and equity compensation. ESOP design, vesting schedules, exercise mechanics, and tax-optimized structures for both US-incorporated companies (ISO / NSO / RSU under Delaware C-Corp structures, with vesting acceleration and ESOP pool sizing) and Türkiye-based companies (Anonim Şirket option pools, capital increase mechanics).
- Phantom and shadow equity programs. Cash-settled equity programs (“gölge opsiyon”) for situations where actual stock grants are impractical: common in TR operating companies that have a US holding parent, where local employees receive economic equity exposure without becoming shareholders of record.
- Cross-border ESOP architecture. Structuring option grants that work across US-flipped entities and Turkish subsidiaries: including 83(b) elections, withholding tax treatment, and option-to-equity conversion at exit.
- Severance and termination. Severance (kıdem tazminatı) package design, mutual termination agreements, and litigation-resistant termination workflows.
- Employee mobility and global hires. Work permits, expatriate assignments, remote-work compliance, and PEO/EOR structuring for international scaling.
- Litigation and labor tribunals. Defense in labor courts, unfair dismissal claims, and collective bargaining matters.
For founders preparing their first ESOP rollout or structuring equity for new hires, our ESOP Design Checklist walks through the major decision points. Where employment intersects with M&A, we coordinate with our M&A and Sell-Side Representation teams.
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Frequently Asked Questions
What termination exposure do employers carry in Türkiye?
Severance accrues at roughly one gross month per year of service (subject to the statutory cap) after one year; notice runs two to eight weeks by seniority. Workplaces with thirty or more employees face job-security claims — reinstatement plus up to eight months’ compensation — which is why termination files and documented performance processes matter.
Are post-termination non-competes enforceable?
Yes, within limits: written form, legitimate business interest (access to customers or trade secrets), and reasonable scope, geography, and duration — capped at two years under the Code of Obligations. Courts trim or void overbroad clauses, and a well-designed garden-leave or consideration mechanism improves enforceability.
How is employee equity taxed in Türkiye?
By default, option gains are taxed as employment income at exercise. Recent incentives soften this for technology employers — including exemptions tied to holding periods for techno-park and R&D-centre companies — so plan design (grant timing, exercise mechanics, sale windows) drives the net outcome for employees more than the headline grant size.