Informal employment problem in Small and Medium-sized Enterprises (SME): Instance of Aydın

Informal employment is an important problem arising from the reflection of the informal economy to the working life, and it emerges as employment unregistered workers without complying with the legal rules governing the working life. Although, informal employment has positive consequences such as reducing unemployment and poverty, providing income opportunities to certain segments in the short term, it also has negative features that affects the economic, financial and social areas of countries such as disrupting the distribution of income, increasing unfair competition, decreasing public trust and loss of public income in the long term. Informal employment is most common in Small and Medium-Sized Enterprises (SME). Approximately %99 of the enterprises operating in Turkey are SME. Informal employment among SME is mostly seen in micro enterprises (enterprises with less than ten employees). Although the rate of informal employment, which was around 50% in the 2000s in Turkey, has dropped to around 31% today thanks to the work done, this rate is still 56% in micro enterprises. This study has two purposes. The first aim is to reveal the current status, causes and dimensions of informal employment in micro enterprises operating in Aydın Province. The second aim of the study is to investigate whether there is a difference between the audited enterprises and the non-audited enterprises and enterprises that are aware of employment incentives and those that are not aware of incentives in terms of informal employment. To reach the research aims; a field study covering 104 micro enterprises and 270 employees has been conducted in Aydın. Within the scope of the field research, quantitative (survey) and qualitative (interview) methods were used together. As a result of the research it has been determined that 22.6% of employees work informally, the most important reason for informal employment for employees is unemploymnet with 47.8%, for enterprises is insurance premiums and taxes are high with 44.2%. informal employment was found to be higher in women, age 55 and above, low education level, part-time employees, those who receive wage below 2.000 TL, and those who receive non-wage income, 39.4% of enterprises employ unregistered workers, informal employment is the highest in the food and beverage sector (cafes, restaurants etc.) with 65.3%, audited enterprises employ unregistered workers 19.2% less than non-audited enterprises and enterprises that aware of employment incentives employ unregistered workers 31.2% less than that are not aware of incentives. KEYWORDS: İnformal Employment, Social Security, Supervision