The government has proposed legislation that would significantly expand the powers of the National Labour Inspectorate (PIP), allowing inspectors to immediately reclassify civil law contracts as full-time employment, conduct remote inspections, and impose higher penalties on employers. The changes are expected to reshape employment practices in Poland, particularly in sectors with a high share of non-standard contracts and foreign workers. According to the PIP 2024 Annual Report, labour inspectors secured benefits for more than 52,400 employees, with outstanding wages and allowances amounting to PLN 158.8 million. Approximately 4,200 workers on civil law contracts also recovered PLN 1.7 million due to violations of the minimum hourly wage. A further 3,200 individuals had their civil law agreements converted into full-time employment contracts. PIP inspections highlighted persistent irregularities in the employment of foreigners. In 2024, 19.6% of foreigners checked by inspectors were found to be working illegally, compared with 17% in 2023 and 12.8% in 2022. The highest number of violations occurred in construction, manufacturing, administrative services, and transport. Labour market specialists stress that foreign workers remain essential to Poland’s economy, particularly in industries facing chronic labour shortages. “The work of foreigners contributes directly to GDP growth. Eliminating practices such as undeclared work or under-the-table wages is vital not only for employees but also for the wider economy,” said Krzysztof Inglot, founder of Personnel Service. The proposed legislation introduces several changes. Inspectors would be able to order the conversion of civil law contracts into employment contracts with immediate effect, bypassing lengthy court procedures. Inspections could also be carried out remotely, while financial penalties for violations would at least double. In addition, inspectors would gain quicker access to data through information-sharing with the Social Insurance Institution (ZUS) and the National Revenue Administration (KAS). However, legal experts have raised concerns about unclear provisions in the draft law. Monika Mądra-Sokołowska, lawyer and board member at Personnel Service, noted that it remains uncertain how cases will be handled if courts later overturn inspectors’ decisions. “During the time between the inspector’s ruling and a court’s reversal, employers would have treated contractors as employees, paying contributions and benefits. It is not clear whether they could then reclaim those costs if the court disagrees with PIP,” she explained. Employers are advised to prepare by auditing existing contracts against the Labour Code, establishing appeal procedures, and training HR departments on the new inspection regime. Experts emphasise that advance preparation may help mitigate the risks of sudden reclassification decisions. The government argues that the reform will improve compliance with labour law, ensure better protection for workers, and strengthen oversight in sectors vulnerable to exploitation. Employers, meanwhile, warn of potential administrative burdens and legal uncertainties that could follow once the law comes into effect. Source: Personnel Service