Labour Law And Employment In Poland - 2019 Guide

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Labour Law and Employmentin Poland - 2019 Guidepoland@accace.comwww.accace.com www.accace.pl

ContentsEmployment characteristics3Employment contract types3Non-EU residents3EU residents3Employment contract minimums4Termination of the employment5Alternatives5Termination without notice5Notice period6Contributions and income tax7Working time and vacation9General requirements9Paid leave9Unpaid leave10Temporary work11General aspects11Minimum requirements and limitations11Temporary work agencies – obligations12EMPLOYEE CAPITAL PLANSGeneral information1313Overview of applicable legislation15ABOUT ACCACE162 Labour Law and Employment in Poland – 2019 Guide

EMPLOYMENTCHARACTERISTICSEmployment contract typesThere are three types of employment agreements in Poland: employment agreement for the trial periodemployment agreement for definite periodemployment agreement for indefinite periodThe agreement for the trial period can be concluded fora maximum of 3 months. This type of agreement can precedeemployment agreement of definite or indefinite time.The agreement for definite period can be concluded for a maximumof 33 months. Moreover, it is possible to conclude only3 of such agreements in a row. The agreement which exceeds the total of 33months or is a 4th agreement in a row will be considered as the agreementconcluded for indefinite period.All foreigners, EU and non-EU residents, can be employed on the basisof the same types of agreements as Polish citizens.Non-EU residentsForeigners to perform work in Poland have to obtain a work permit. Such document is issued on arequest of employer by competent local authority (in Polish: wojewoda). The procedure lastsapproximately 1 month. Issued work permit can be a basis to obtain working visa.Different rules apply to citizens of Republic of Armenia, Republic of Belarus, Republic of Georgia,Republic of Moldova, Russian Federation and Ukraine. Citizens of these countries can perform work inPoland for not longer than 6 months in a period of 12 consecutive months without obtaining a workpermit. In such case the employer only has to submit to the labour office a declaration of intention toemploy a foreigner. Furthermore, the foreigner has to possess a document certifying the title of residencein Poland.EU residentsThe work permit is not required in case of citizens of EU and EEA and Switzerland. Residents of thesecountries are allowed to perform work under the same conditions as citizens of Poland. However, if theforeigner (EU resident) plans to stay in Poland longer than 3 months, he should register his stay inprovincial office.3 Labour Law and Employment in Poland – 2019 Guide

EMPLOYMENT CONTRACTMINIMUMSAn employment agreement should specify the parties of theagreement, the type of agreement, the date of its conclusion,as well as the work and remuneration conditions, including inparticular: the type of workthe place where the work is performedthe remuneration corresponding to the type of work, witha specification of the remuneration components,the working timethe starting date of employmentFurthermore, the employer must inform the employee in writing, not laterthan within 7 days from the date of concluding the employment contract,about: the standard daily and weekly working time binding the employeethe frequency of the remuneration paymentsthe length of annual leave to which the employee is entitledthe length of the notice period binding upon the termination of theemployee's employment contractany collective labour agreement that covers the employeeIf the employer is not obliged to establish work regulations – he should additionally inform the employeeabout the night-time hours, the place, date and frequency of remuneration payments, and the adoptedprocedure of confirming the arrival and presence of employees at work, as well as the procedure ofexcusing their absence from work.The remuneration in Poland cannot be lower than minimum wage, which is determined by the Council ofMinisters each year. In 2019 the minimum wage amounts to PLN 2,250 gross.4 Labour Law and Employment in Poland – 2019 Guide

TERMINATION OF THEEMPLOYMENTAlternativesThere are 3 methods of terminating employment agreement inPoland: termination by mutual consenttermination with noticetermination without noticeTermination without noticeAn employer may terminate an employment agreement without notice: in the event of a severe violation by the employee of the employee'sbasic dutiesif the employee commits an offence, which prevents furtheremployment in the occupied job position - if the offence is obvious orhas been declared by a final court sentenceif the employee, through his fault, loses a license required to perform work in the occupied jobpositionif an employee is unable to work as a result of an illness: for more than 3 months - if the employee has been employed with a given employer forless than 6 months for longer than the total period of receiving remuneration and welfare and sicknessbenefits on that account, as well as receiving rehabilitation allowance for the first 3months - if the employee has been employed with a given employer for at least 6months, or if the incapacity to work was caused by an accident at work or anoccupational diseaseif an employee has any justifiable absence from work for other than aforementioned reasons,lasting for more than 1 monthAn employee may terminate an employment agreement without notice: if he received a medical certificate declaring a harmful effect of the work performed on the healthof the employee, and the employer, within the period determined in the medical certificate, failsto transfer the employee to another position appropriate for his health condition andcorresponding to his professional qualifications5 Labour Law and Employment in Poland – 2019 Guide

in the event of severe violation of employer’s basic duties, in such case the employee is entitledto compensation in the amount of remuneration for the notice period.Notice periodThe employment agreements can be terminated by notice given by each party. The termination noticeperiod depends on the period of employment. Notice periods for definite and indefinite period agreementsare: 2 weeks if the employee was employed for less than 6 months1 month if the employee was employed for at least 6 months3 months if the employee was employed for at least 3 yearsIn case of agreement for indefinite period, the employer’s notice of termination should state the reasonjustifying the termination. The law in Poland does not provide the list of possible reasons, but accordingto Polish judicature, the reason should be real, concrete and understandable for employee.In case of agreements for trial period, the periods of termination notice are: 3 business days if the trial period does not exceed 2 weeks1 week if the trial period is longer than 2 weeks2 weeks if the trial period is 3 months6 Labour Law and Employment in Poland – 2019 Guide

CONTRIBUTIONS ANDINCOME TAXThe employer is obliged to pay monthly contributions tosocial and health insurance and advances on the income tax.The tax advance should be paid until 20th day of the nextcalendar month. The contribution to social insurance shouldbe paid until 15th day of the next calendar month.The amounts of personal income tax and contributions owed inPoland are presented in the tables below.Basis for tax calculationTax amounts to:Up to PLN 85,52818 % - amount decreasing thetaxAbove PLN 85,528PLN 15,395.04 32% ofsurplus over PLN 85,528.00The tax-reducing amount mentioned in the table amounts to:PLN 1,440 - for a taxable base not exceeding PLN 8,000;PLN 1,440 reduced by an amount calculated using the following formula:PLN 883.98 x (taxable base - PLN 8,000) PLN 5,000, for a taxable base higher than PLN 8,000 and notexceeding PLN 13,000;PLN 556.02 - for a taxable base higher than PLN 13,000 and not exceeding PLN 85,528;PLN 556.02 reduced by an amount calculated using the following formula: PLN 556.02 x (taxable base - PLN85,528) PLN 41,472, for a taxable base higher than PLN 85,528 and not exceeding PLN 127,000;PLN 0 for taxable basis exceeding PLN 127,0007 Labour Law and Employment in Poland – 2019 Guide

The tax-reducing amount mentioned in the table amounts to:EmployeeEmployerRetirement pension contribution9.76 %9.76 %Pension contribution1.5 %6.5 %Sickness contribution2.45 %N/ADisability pensionN/Afrom 0.4 % to 3.6 %Health insurance9%N/AEmployment FundN/A2.30 %Fund of GuaranteedEmployment BenefitsN/A0,1 %N/A/0,15 %22.71 %19.21 % – 22.41 %ContributionSolidarity Support FundDisabled EmployeesTOTALfor8 Labour Law and Employment in Poland – 2019 Guide

WORKING TIME ANDVACATIONGeneral requirementsWorking time in Poland should not exceed 8 hours per dayand an average of 40 hours per an average five-day workingweek. For the work performed in excess of the workingtime standards employee is entitled to an allowance. If it’sjustified by the type of work or the organization thereof, theemployer can introduce the other working-time systems whichallow to extend daily amount of working time. Specificrequirements related to this matter are indicated in the PolishLabour Code.Paid leaveAn employee is entitled to an annual, paid vacation leave amounting to 20days - if an employee has been employed for less than 10 years, or to 26 daysif an employee has been employed for at least 10 years.Periods of previous employment, regardless of intervals in employment andhow the employment relationship ended, are counted into the employment perioddetermining the right to leave and the length of leave.Graduating from the following schools means the following periods are counted into the employment ofperiod on which the length of leave is based: basic or other equivalent vocational school - the duration of the education provided for by thesyllabus, but not more than 3 yearssecondary vocational school - the duration of the education provided for by the syllabus, but notmore than 5 yearssecondary vocational school for graduates of basic (equivalent) vocational schools - 5 yearsmiddle comprehensive school - 4 yearspost-comprehensive school - 6 yearsschool of higher education - 8 yearsThe periods of education cannot be aggregated.9 Labour Law and Employment in Poland – 2019 Guide

If an employee attended school while being employed, the employment period determining the length ofleave includes either the duration of employment while attending school, or the duration of attendingschool, whichever is the more favourable to the employee.In the event of changing the employer during the year, the employee is entitled to paid leave as follows: with current employer - in an amount proportional to the period worked at this employer in thecalendar year in which employment relationship ends, unless the employee has already used upor exceeded the leave he is entitled towith new employer - in the amount: proportional to the time remaining until the end of the calendar year - if the employee isemployed for a period not shorter than up to the end of the calendar year, orproportional to the employment period in the calendar year – if the employee is employedfor a period shorter than up to the end of the calendar yearAn employee who has exceeded the leave he is entitled to during employment (with the prior employer),is entitled to leave with the new employer in an appropriately reduced amount. The total length of leavewithin a calendar year cannot be shorter than the amount resulting from the employment period, asindicated above.For the period of an employee’s incapacity to work, the employee retains the right to the remuneration.The remuneration is due in amount of 100 % or 80 % of regular remuneration depending on the cause ofthe incapacity. The employer is obliged to pay the remuneration for the first 33 days of incapacity in anygiven calendar year. If the incapacity lasts longer the employee is entitled to receive sickness benefit paidby social security institution for a period of up to 182 days.Unpaid leaveAt the written request of an employee, the employer in Poland can grant unpaid leave to the employee.The period of unpaid leave is not counted into the employment period on which the employee's rights arebased.When granting unpaid leave longer than 3 months, the parties may provide a possibility to recall theemployee from leave for important reasons.An employer can also grant an employee, with the written consent of the employee, unpaid leave toperform work at another employer for a period set out in an agreement concluded on this matter betweenthe employers. The period of such leave is counted into the period of work on which the employee' rightsat the existing employer are based.10 Labour Law and Employment in Poland – 2019 Guide

TEMPORARY WORKGeneral aspectsAccording to Polish law, temporary work shall be understoodas: seasonal, periodic, or casual work; orwork that the employees of the user-undertaking wouldnot be able to perform on time; orwork that falls within the scope of duties of an employeeof the user-undertaking who is absent.The legal scheme of temporary employment is the following:1. a temporary work agency conducts a contract with a userundertaking setting forth the rules of leasing of the temporaryemployee;2. the temporary work agency employs a temporary employee;3. the temporary work agency assigns the temporary employee to perform temporary work for theuser-undertaking.It shall be stressed out that the temporary employee remains the employee ofthe temporary work agency at all time. But it is the user-undertaking who instructsthe temporary employee and subsequently supervises his performance.It shall be noted that unless regulated otherwise, the provisions of labour law concerning the employerand the employee apply accordingly to temporary work agency, temporary employee and userundertakings. The only exception is the regulation related to group redundancies.Minimum requirements and limitationsThe temporary work agency should agree with the user-undertaking in writing, at least on the following: the type of work to be entrusted to the temporary employeethe qualifications required from the temporary employee to perform assigned workthe expected duration of the temporary employmentthe working hours of the temporary employeethe place of performing the temporary work11 Labour Law and Employment in Poland – 2019 Guide

the scope of information regarding the performance of the temporary work that affects the levelof remuneration for the temporary employee’s work, as well as the method and deadlines forproviding this information to the temporary work agency in order to correctly calculate theemployee's remunerationthe extent to which the user-undertaking assumes the obligations of the employer with respect tohealth and safety at workthe extent to which the user-undertaking assumes the obligations of the employer with respect topayments to cover business travel expensesThe user-undertaking shall also inform the temporary work agency about the remuneration and itsstructure (bonuses, fees, additional payments) and also health and safety conditions.The temporary work agency may not assign the temporary employee with temporary work for a singleuser-undertaking for a total period of work exceeding 18 months within a period of 36 successive months.The user-undertaking can use the temporary employee for not more than 18 months within a period of 36successive months.There is an exception only in a situation when the temporary employee performs temporary work for thebenefit of a given user-undertaking in a continuous manner, and the work includes performing the tasksof an absent worker of the user-undertaking. In such a case the temporary work can be performed formaximum of 36 months. The break between the employment for the same user-undertaking shall last atleast 36 months.Temporary work agencies - obligationsThe activity of temporary work agency is regulated by Polish state. In order to conduct such activity eachentity should register in the employment Agencies Register kept by the marshal of the voivodship.In order to be registered as a temporary work agency the following conditions shall be fulfilled: the entity cannot have tax, social security, health insurance and the Labour Fund andGuaranteed Employee Benefits Fund arrearsthe entity cannot be criminally recordedthe entity cannot be subjected to bankruptcy or liquidation proceedingsThe employment agency has an obligation to provide the marshal of the voivodship with a report on theactivities of employment agencies - within January 31st of each year for the preceding year - containing inparticular the number of persons assigned to perform temporary work.In the documents, announcements and offers the temporary work agency is obliged to disclose theregistration number and label the job adverts for temporary employment as "temporary jobs".12 Labour Law and Employment in Poland – 2019 Guide

EMPLOYEE CAPITALPLANSGeneral informationEmployee Capital Plans (PPK) is a voluntary pension savingsystem for all persons paying the social security contributions,regardless of the form of employment. This is a universal socialprogram which aim is to increase the financial security of Poles.Regulations concerning PPK are included in the Act on EmployeeCapital Plans from October 4, 2018.Funds accumulated in PPK by a participant will be paid to him afterreaching the age of 60 (the legislator introduced the same age for womenand men in accordance with the principles of equal treatment in relation tovoluntary pension schemes for employee). This payment will be divided intoone-off payment and the other parts paid for the period of 10 years in 120monthly installments.The participation in PPK is voluntary. An employee will be automatically assignedto PPK, however they will be able to resign from paying the contributions based on their written declaration.In accordance with the adopted Act, the obligation to create a PPK will be spread over time and will dependon the number of people employed in the entity:THE AMOUNT OF EMPLOYEESTHE ACT IS APPLIED FROM: 2501st July 201950 – 2491st January 202020 – 491st July 2020 19pluspersons employed in the public finance entities13 Labour Law and Employment in Poland – 2019 Guide1st January 2021

The obligatory basic contribution is financed by both the employee and the employing entity’s funds.The scheme below depicts the contribution rates:OBLIGED ENTITYTHE AMOUNT OF PAYMENTState – welcome contributionPLN 250State – annual contributionPLN 240Employer – basic contributionEmployer – additional contributionEmployee – basic contributionEmployee – additional contribution1,5 % of basis of pension and disability insurancecontribution2,5 % of basis of pension and disability insurancecontribution2 % of basis of pension and disability insurancecontribution2 % of basis of pension and disability insurancecontribution14 Labour Law and Employment in Poland – 2019 Guide

OVERVIEW OFAPPLICABLE LEGISLATION Labour Code dated 26.06.1974 (Official Journal2018, position 917)Act on promotion of employment and labour marketinstitutions dated 20.04.2004 (Official Journal 2018,position 1265)Act on minimum remuneration for work dated10.10.2002 (Official Journal 2018, position 2177)Act on Personal Income Tax dated 26.07.1991 (OfficialJournal 2018, position 1509)Act on Social insurance system dated 13.10.1998 (OfficialJournal 2017, position 1778)Act on employment of temporary workers dated 09.07.2003(Official Journal 2018, position 594)Act on Employee Capital Plans dated 04.10.2018 (Official Journal2018, position 2215)DisclaimerPlease note that our materials have been prepared for general guidance on the matter and itdoes not represent a customized professional advice. Furthermore, because the legislation ischanging continuously, some of the information may ha

4 Labour Law and Employment in Poland – 2019 Guide . EMPLOYMENT CONTRACT MINIMUMS . An employment agreement should specify the parties of the agreement, the type of agreement, the date of its conclusion, as well as the work and remuneration conditions, including in particular: the type of work the place where the work is performed

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