Civil law contracts under the scrutiny of the Chief Labour Inspectorate

Analysis

Civil law contracts under the scrutiny of the Chief Labour Inspectorate

Employer zone: taxes and law 4/2017 |27 February 2017

At the beginning of February the Labour Protection Council favourably assessed the work agenda prepared by the Chief Labour Inspectorate (PIP) for the year 2017. This year PIP will primarily focus on civil law contracts. Labour inspectors will examine the cases when civil law contracts are concluded in typical employment-relationship situations and verify compliance with the minimum hourly rate threshold.

Let us remind you that the Act Amending the Act on the Minimum Wage and Other Laws took effect on 01 January 2017. Before that date the minimum wage threshold was only applicable to employees, i.e. people who worked based on employment contracts. As from 01 January 2017 persons working under personal service contracts or other contracts of commission are also entitled to a minimum fee. The principal must pay not less than PLN 13 for each hour of their service.

In addition, beginning from January 2017 the amending act equips labour inspectors with certain new entitlements - namely inspectors can control whether the amounts paid comply with the requirements set out in the Act . If the minimum threshold hourly rate is not paid, the principal runs the risk of being fined (up to PLN 30 000). 

PIP controls of civil law contracts

Taking into account the recent media releases and public comments made by the Chief Labour Inspector, PIP is going to thoroughly verify adherence to the minimum hourly rate requirement in respect of persons working based on personal service or commission contracts. Moreover, Independent and Self-Governing Trade Union 'Solidarność' (NSZZ Solidarność) will assist labour inspectors in the efforts aimed at detecting any instances of non-compliance. NSZZ Solidarność has already started to encourage workers to report all situations where the hourly rate set in personal service or commission contracts is understated. PIP will follow up on this reports and conduct the appropriate controls.

In particular, PIP has suggested that entities operating in the sectors where PIP inspectors disclosed many cases of entering into civil law contracts in typical employment-contract situations in the past may expect intensified controls.

Based on the preliminary information concerning PIP's agenda for 2017, it is estimated that labour inspectors plan to carry out 79 thousand controls this year.

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