As of July 8, one of the most discussed labor market reforms in Poland has come into effect. The National Labor Inspectorate (PIP) has gained the right to independently recognize civil law contracts and B2B contracts as fictitious and to demand their replacement with a standard employment contract (umowa o pracę). What does this mean for foreigners?
Until now, the inspectorate could only refer the matter to the court. Now, in certain cases, decisions will be made administratively, significantly speeding up the process
How inspections will now be conducted
If an inspector concludes that a civil law contract is used solely to circumvent labor law, the procedure will look like this:
- first, the employer will be offered the option to voluntarily formalize the employee under an employment contract or to bring the terms of cooperation into compliance with the law
- if this does not happen, the district labor inspector will be able to issue a decision to transfer the employee to an employment contract
- the employer or the employee themselves will be able to appeal this decision in court. Until the court proceedings are concluded, the execution of the decision will be suspended
How many fictitious contracts can be inspected
According to the Ministry of Labor, about 1.5 million people work exclusively under civil law contracts. At the same time, the authorities emphasize that not all of them are illegal
Ministerstwo Finansów wcześniej oszacowało, że około 160 000 umów B2B w rzeczywistości ukrywa standardowe stosunki pracy. Takie przypadki będą głównym celem nowej reformy.
Who will be inspected first
The authorities state that there will be no mass inspections. The labor inspectorate will gain access to information from the Social Insurance Institution (ZUS) and the National Revenue Administration (KAS). This will allow for the selection of companies with a higher risk of violations
According to representatives of the ruling coalition, the first to be inspected may include:
- employers who have previously used fictitious contracts
- businessy w małych miasteczkach, gdzie pracownicy często nie mają alternatywy dla zatrudnienia
- state hospitals and medical institutions where many doctors work under B2B contracts
Minister of Labor Agnieszka Dziemianowicz-Bąk stated that a significant portion of contracted doctors should work under employment contracts
What will change for foreigners
For foreigners working in Poland, the reform may have serious consequences. Many citizens of Ukraine, Belarus, Georgia, and other countries work under contracts zlecenie, dzieło, or through B2B, although they actually perform the duties of regular employees on a daily basis
If the inspectorate establishes that a person:
- works on a fixed schedule;
- is subordinate to a supervisor;
- performs work personally and continuously;
- uses the employer’s equipment;
- does not run an independent business,
then such a contract may be recognized as an employment relationship
This means that the employee will be able to obtain the rights provided by umową o pracę, including:
- paid leave;
- payment for sick leave;
- protection against dismissal;
- payment for overtime work;
- pełne rozliczenie doświadczenia zawodowego i gwarancji społecznych
At the same time, the reform does not prohibit B2B contracts and civil law contracts. If a person is indeed providing services as an independent entrepreneur, works with multiple clients, and organizes their own activities, nothing will change.
Why the reform is controversial
Businesses have long criticized the initiative, fearing increased costs and greater state control. Unions, on the other hand, believe that the changes will help combat abuses where employers hire employees under cheaper contracts, depriving them of social guarantees
Even within the ruling coalition, there are concerns that the new rules may provoke discontent among entrepreneurs and some workers, especially ahead of elections. The opposition also opposes the reform, arguing that the state should not interfere in the choice of employment form
What other changes have come into effect
In addition to the new powers of inspectors, the reform includes
- data exchange between ZUS, PIP, and KAS to identify violations
- the possibility of conducting remote inspections
- increased fines for violations of labor law.
Thus, the National Labor Inspectorate has gained significantly more tools to control the labor market, and employers using fictitious civil law contracts instead of employment contracts will now find it much harder to evade responsibility
