A new Polish law allows labor inspectors to reclassify contracts as employment, impacting social security obligations for both employers and employees.
PIP Reform and Contribution Effects
The contribution consequences of recognizing a contract for services as employment depend on whether full contributions were previously paid, or only health insurance contributions. Financial effects may be felt by both the employee and the employer.
The law introducing the PIP reform (Act of March 11, 2026, amending the State Labor Inspectorate Act and other acts) is currently awaiting the President’s signature.
Decision-Making Authority
The law allows the district labor inspector to issue a decision stating that a specific contract for services (or a service agreement subject to contract law, commonly referred to as a “contract for services”) is, in reality, an employment contract. This decision will not have retroactive effect.
Concerns Regarding Social Security Contributions
Employers are concerned about the social security contributions on contracts for services that are reclassified as employment contracts. The contribution effects of such a decision will depend on how the contract for services was previously subject to contributions, primarily whether there was a concurrent basis for insurance.
Social Security Contributions for Employment Contracts
Income from an employment relationship, with certain exceptions outlined in the regulation of the Minister of Labor and Social Policy of December 18, 1998, is subject to mandatory contributions for pension, disability, sickness, accident, and health insurance.
If an individual performs multiple employment contracts, they are subject to mandatory social and health insurance from each of those contracts, regardless of any concurrent self-employment or contract for services work.
The Principle of Employee Status
Article 8(2a) of the Social Insurance System Act defines an employee as someone performing work under an agency agreement, contract for services, or other service agreement subject to contract law, or a work contract, if the agreement is concluded with an employer with whom they already have an employment relationship, or if the work is performed for an employer with whom they already have an employment relationship. Income from an additional contract for services or work contract concluded with their own employer is treated as income from an employment relationship.
Social Security Contributions for Contracts for Services
Contracts for services are subject to contributions similar to employment contracts. The contribution base is the contractor’s income, with certain exceptions outlined in the regulation of December 18, 1998.
The contracting party is obligated to pay the following social insurance contributions on behalf of the contractor:
Health insurance contributions are also mandatory. Sickness insurance contributions for the contractor are voluntary, with the contractor deciding whether to be registered for this insurance. If they choose to do so, the contracting party additionally pays a contribution (2.45% of the contribution base), which is not co-financed by the contractor.
Multiple Contracts for Services – Contribution Rules
According to the rules of concurrent insurance titles resulting from Article 9 of the Social Insurance System Act, a contractor performing multiple contracts for services can choose which contracts to be subject to mandatory pension and disability insurance, and consequently, accident insurance.
However, the condition is that in a given month, the contribution base from the selected contract or the sum of the contribution bases from several selected contracts must be at least equal to the currently applicable minimum wage. If so, the remaining contracts for services may be subject only to health insurance contributions, which are always mandatory.
Multiple Contracts for Services with One Entity
Generally, the same rules of concurrent insurance apply to multiple contracts for services with one entity as to contracts with different entities. However, if the subject matter of the contracts with the same entity is the same, it may be considered an attempt to circumvent contribution regulations by artificially dividing the remuneration into several contracts to take advantage of the rules of concurrent insurance.
Contract for Services and Employment Contract with Another Entity
If an individual simultaneously performs a contract for services and has an employment relationship with another entity, the contract for services may not be subject to contributions if the contribution base from the employment contract is not less than the minimum wage.
If the income from employment (regardless of its scope) is not less than the current minimum wage, the individual is not subject to mandatory social insurance from contracts for services.
Contract for Services and Employment Contract with the Same Entity
Income from a contract for services concluded with one’s own employer, or formally with a third party but actually performed for the employer, is subject to contributions as income from an employment relationship (as per Article 8(2a) of the Social Insurance System Act). There is therefore no concurrent basis for insurance.
PIP Decision – Contribution Effects Without Concurrent Titles
The effects of a PIP decision will depend on whether there was previously a concurrent basis for insurance. In the simplest case, if the former contractor previously paid full contributions for the contractor (pension, disability, accident, and health insurance), the difference will relate only to sickness insurance, which will now become mandatory.
This will not affect the employer’s costs (the former contractor), as this amount is entirely deducted from the funds due to the employee (the former contractor). If the former contractor was already voluntarily insured for sickness benefits and the payer deducted the sickness contribution from their remuneration, recognizing the contract as an employment contract will not involve paying any additional contributions. This applies to both the employer and the employee.
PIP Decision – Contribution Effects With Concurrent Titles
If the PIP decision concerns a contract for services that did not previously constitute a mandatory basis for insurance, i.e., was subject to only health insurance contributions, the situation will change significantly. The employer (the former contractor) will be obliged to pay contributions for full social insurance. This will mean a reduced net amount for the employee (the former contractor) and increased costs for the employer (the remuneration amount will include so-called “super-gross”).
Depending on the existing insurance title, this will have different additional effects for the employee.
Contracts for Services with Remuneration Above the Minimum Wage – Examples
1. A contract for services with Company A was recognized as an employment contract. Previously, Company A paid only health insurance contributions for this person, as the person was compulsorily insured under a contract for services with Company B. In both companies, the income exceeded the equivalent of the minimum wage. After the PIP decision, the contract with Company A becomes a mandatory basis for insurance, and the contract with Company B becomes voluntary. If the insured person so decides, they may be subject to only health insurance under the contract for services with Company B.
Contracts for Services with Remuneration Below the Minimum Wage – Examples
2. A contract for services with Company A was recognized as an employment contract. The number of hours worked on the contract was less than the standard working hours, so it was recognized as a part-time employment contract. The monthly remuneration, and therefore the contribution base, is lower than the minimum wage. Previously, Company A paid only health insurance contributions for this person, as the person was compulsorily insured under a contract for services with Company B. This was possible because the income from the contract performed for Company B was not less than the minimum wage. After the PIP decision, the contract with Company A becomes a mandatory basis for insurance, but the contract with Company B also remains a mandatory basis for insurance. The contribution base from the contract recognized as an employment contract with Company A is lower than the minimum wage.
PIP Decision – Contribution Effects When Multiple Contracts with One Entity
The PIP decision will have other effects if the contractor previously concluded multiple contracts for services with the same contractor. Regardless of whether all contracts for services were recognized by the PIP as employment contracts, or only some, the effects will be similar. If even only one contract is recognized as an employment contract, the principle set out in Article 8(2a) of the Social Insurance System Act will apply.
Multiple Contracts for Services with One Entity – Example
3. The PIP determined that one of the two contracts for services concluded by the contractor with Company A is an employment contract. This means that the second contract, even if not recognized as an employment contract, must also be subject to contributions as an employment contract under Article 8(2a) of the Social Insurance System Act.
PIP Decision – Effects for Students
The decision will have the greatest impact on students. If a contract for services performed by a student is recognized as an employment contract, their remuneration will have to be fully contributed, i.e., with contributions for social and health insurance. Therefore, the student’s net remuneration will decrease significantly, and the employer’s costs will increase to the so-called “super-gross” amount.
Legal Basis
Regulation of the Minister of Labor and Social Policy of December 18, 1998, on detailed rules for determining the contribution base for pension and disability insurance (Journal of Laws of 2025, item 316).
Article 8(2a) and Article 9 of the Act of October 13, 1998, on the Social Insurance System (Journal of Laws of 2026, item 199).
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