Some entrepreneurs, mainly large companies, do not intend to comply with orders from State Labour Inspectorate (PIP) inspectors to convert B2B contracts and civil-law contracts into employment contracts – reports “Dziennik Gazeta Prawna”. By early October, inspectors had issued over 600 such orders.
The dispute concerns the reform of the State Labour Inspectorate (PIP), which took effect on Wednesday, 8 July. From that day, a district labour inspector may, by administrative decision, convert an improperly concluded civil-law contract – a contract for mandate, a contract for specific work or a B2B contract – into an employment contract, without a prior court judgment. Previously, an inspector could only refer the case to court, and such proceedings lasted for years.
How the procedure works
The mechanism has two stages. First, during an inspection, the inspector issues an order to remove the violations. Only if the employer fails to comply is administrative proceedings possible, ending with a decision to convert the contract. A decision can be appealed to the labour court within 30 days, and the appeal suspends its enforcement (description of the rules in Puls HR).
Companies that voluntarily replace a defective contract with an employment contract within a year of the rules taking effect are expected to avoid financial liability. Later, a fine of PLN 2,000 to PLN 60,000 applies; previously the upper limit was PLN 30,000. The Ministry of Finance estimates that 160,000 people work in Poland under sham B2B contracts – reports Interia.
First data and refusals
According to DGP, as cited by Interia, by early October inspectors had issued over 600 orders to change contracts, of which 535 were carried out. In over 70 cases, proceedings are ongoing, partly due to conflict between the inspectorate and the employer. There are also the first open refusals to comply with orders.
For comparison, in an earlier PIP summary described by Forsal.pl, there were 121 orders after more than 100 inspections. The number of orders is therefore growing quickly, although the data come from different dates.
According to experts quoted by DGP, the resistance mainly comes from large companies that can afford the services of the biggest law firms. Smaller entrepreneurs do not want to enter into a dispute with PIP. Attorney Edyta Defańska-Czujko says that some employers believe they have the right to engage collaborators on B2B terms and will not comply with the inspector’s order.
Why the fear of millions
The main reason for the disputes is cost. According to DGP, unpaid ZUS social security contributions and taxes may reach millions of zloty, especially if ZUS decides that contributions must be paid for five years back. Choosing the court route is meant to protect companies from such claims. Experts quoted by the daily predict long disputes, and the procedure may last months or years.
The scale of disputes may grow in 2027. Currently, inspections are carried out randomly, but next year PIP is to receive a risk-analysis tool. Data from PIP, ZUS and the National Revenue Administration (KAS) are to be used to select companies.
What it means for companies and collaborators
- The name of a contract does not determine its nature. According to Interia, the inspector checks, among other things, whether the contractor is subject to constant instructions and supervision, has fixed hours and a fixed workplace, does not bear the risk of the result, and must perform the work personally.
- Companies that want to use the period for voluntary contract changes without penalties have until 8 July 2027.
- An appeal to court suspends the decision’s enforcement, but does not remove the risk of back payments of contributions and taxes.
- People on B2B contracts whose work has the characteristics of employment may report the matter to PIP.
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