The debate over reforms to the social insurance system and labour law has returned in light of new information. The Social Insurance Institution (ZUS) is developing an algorithm designed to identify companies that conceal traditional employment behind B2B contracts. The National Labour Inspectorate (PIP) will receive ready-made lists of „suspicious” entities, which could significantly change the landscape of the Polish labour market.
New PIP Powers and the Role of the ZUS Algorithm
From next year, PIP inspectors will gain significantly strengthened tools. Instead of referring cases to courts, they will be able to issue administrative decisions recognising a B2B contract as an employment relationship. Such a decision is immediately enforceable, meaning the company must straight away treat the contractor as a full-time employee, paying wages and remitting ZUS contributions and advance income tax. Moreover, the employer will not be able to terminate the contract until the court ruling becomes final, which may take as long as 3-5 years.
The key element of the reform is the Risk Analysis System, an integrated algorithm based on databases of ZUS, PIP and the National Revenue Administration (KAS). The system will automatically flag entities for inspection by detecting anomalies such as:
- A transport company that owns trucks but has no full-time employees.
- A software house employing programmers exclusively on B2B contracts.
- A contractor issuing invoices to only one client, with the description „salary for [month]”.
In one interview, the Chief Labour Inspector described the system as „a child in a toy shop”, highlighting its potential for effectively detecting abuses. Inspections may be carried out remotely or in a hybrid form, without the need for a physical visit to the company.
If a B2B arrangement is deemed fictitious, ZUS may demand correction of contributions going back as far as 5 years, together with interest. Recent updates indicate that ZUS and the Ministry of Finance oppose writing off outstanding contributions, which runs counter to earlier proposals for a „thick line” covering past violations.
Consequences for Businesses and Workers
The reform carries serious financial and legal risks. For businesses, this means potential top-ups to contributions, corrections to tax returns (PIT, VAT) and reputational damage. Small firms, such as software houses, could be pushed to the brink of bankruptcy if inspections cover several contractors over a five-year period.
For self-employed workers, losing B2B status means no longer being able to deduct business costs (for example, equipment or car leasing), which may lead to cash-flow problems. In the event of an algorithmic error, so-called „false positives”, an honest entrepreneur may be wrongly labelled, for instance due to a temporary drop in clients caused by a sector-wide crisis.
To minimise the risk, experts recommend auditing B2B contracts, documenting the independence of contractors (working with multiple clients, freely managing their own time) and consulting lawyers specialising in labour law.
