For many years, the structure of employment law in Poland has been characterized by a large number of civil law agreements, which serve as a substitute for employment contracts.  According to statistical data, up to 85 per cent of service providers in Poland historically have  been hired under civil law agreements, but not as a matter  of choice – they would have preferred to work under an employment contract[1].  Although there are many reasons for this situation, one of the principal ones has been the practice of circumventing the minimum monthly wage legislation, which applies only to employment contracts.

In order to minimize the negative effect of such practices on workers, as from 1 January 2017, the legislator introduced a new minimum hourly wage act (Journal of Laws 2016, item 1265).

The most important change brought about by the new regulations involves the implementation of a minimum hourly wage for work carried out under services agreements (“umowy zlecenia”, “umowy o świadczenie usług”).  At present, a gross hourly wage for service providers cannot be lower than PLN 13 (≈EUR 3), such threshold to be determined each year.  The right to receive the minimum wage is protected in the same way as the right to remuneration under an employment contract – workers cannot waive their right to remuneration or transfer such right to another person. It is worth noting that in the case of employment contracts, the minimum monthly wage (currently, PLN 2,000 / EUR 450) has been in force for a long time.

The new regulations are designed to cover (i) individuals hired under services contracts and (ii) self-employed service providers who are not employers themselves or who do not contract work out to other parties. Persons working under so-called specific task agreements (“umowy o dzieło”, another type of civil law agreement) are the biggest group of individuals who are not protected by the new legislation. Specific task agreements are designed to be used when someone is needed for a specific task or project but it is also common practice for such agreements to be used as a substitute for an employment contract. Providers of personal care services are another group of individuals who are not covered by the new legislation. This is because personal care services are usually provided 24 hours a day, so that were the new regulations to apply to such services, their cost would increase considerably. Likewise, the new regulations do not apply to service providers who determine the place and time of their services themselves and work on commission (for example, sales agents).

Parties to an agreement covered by the new legislation may agree on the method of determining the number of hours worked by the service provider. If they do not do so, it is for the service provider to indicate the number of hours worked. However, this rule does not apply to service providers who are temporary workers – in which case, the number of hours worked is determined by the user undertaking.

Employers who violate the new regulations by paying their employees hourly wages below the minimum statutory amount may be subject to a fine of up to PLN 30,000 (≈EUR 6,500).

Another important change that came into effect on 1 January 2017, is the abolition of a lower minimum monthly wage for first-time workers, who under the previous regime could be paid 80 per cent of the standard minimum monthly wage. They are now entitled to the full amount of the minimum monthly wage. The rationale behind this change is to stop discrimination against young employees.

[1] Persons hired under atypical work arrangements (Pracujący w nietypowych formach zatrudnienia), Central Statistical Office, Warsaw, 27 January 2016.

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