Employment of foreigners in Poland: What will the new law bring?
Given the pending work aimed to amend the regulations on employment of foreigners, we would like to inform you that the planned regulations may have a significant impact on the labor market. Presented below is a brief description of the principal assumptions of the current version of the bill on the conditions for permitting foreigners to work in Poland as proposed by the Ministry of Family, Labor and Social Policy (hereinafter: the Bill).
The Government is still working on the Bill, but the plans are that the Bill is enacted in this quarter of the year.
Work in Poland and work permits
The Bill in its current wording provides that a work permit is issued in the following situations, without limitation:
- if a foreigner is to perform work on the territory of Poland under an employment contract or a temporary employment contract,
- if a foreigner resides in Poland and holds a position in the management board of a company or acts as a proxy, or
- if a foreigner is an employee of a foreign entity and is delegated to Poland in order to perform work (however, a permit is not to be required in cases where no such obligation exists under the present law).
The bill does not provide for the possibility of issuing a work permit when the work is based on civil law contracts, such as a contract of mandate or a contract for specific work. The proposed regulation has been widely criticized – both by business representatives and labor market experts. Entrepreneurs and industry organizations argue that civil law contracts are often opted for due to their flexibility and specific needs of certain industries. The Ministry explains that they were motivated by the desire for greater protection of foreigners and reduction of malpractice, particularly consisting of circumvention of the labor law.
If the legislation comes into force as currently proposed, it will be impossible for contractors to obtain a work permit – a potential solution would then be to work with a temporary work agency or to employ foreigners on a contract basis.
Employee outsourcing
The bill provides that a work permit is not issued when a foreigner is employed to perform work for a third party, unless it is a temporary work agency that acts as the employer. The explanatory memorandum indicates that the intention behind this regulation is to limit ‘employee outsourcing’ on the pretense of providing services.
The change will allow the authorities to refuse work permits in situations where the circumstances indicate that the work is to be performed for an entity other than the employer (or employer-user). This, in turn, is most likely to have the effect of restricting the outsourcing of services or increasing its costs due to unavailability of staff, as outsourcing companies will have to adapt to the new legal reality. However, the impact of the regulation will depend on the final wording of the legislation and on how rigorously the new rules will be enforced by the authorities and the courts. In our opinion, checking whether a foreigner actually works for and under the direction of a third party may be difficult in practice. Assessing the future state of affairs may be a problem, as decisions on work permits must be taken before the employment actually begins.
Restriction and limits on employment of foreigners
The cost of employing foreigners will also potentially increase as a result of the right conferred on the Council of Ministers to set limits on the maximum number of work permits that can be issued in a calendar year. In addition, the Council of Ministers will be authorized to set limits on the employment of foreigners by individual employers (in the form of a defined minimum percentage of Polish citizens and citizens of countries that are members of the European Economic Area and the United Kingdom – as equal to Polish citizens).
On the other hand, there are plans to abandon the job market test consisting in the requirement to obtain information from the starost (town mayor) that the employer is not able to satisfy its staffing demands. This solution is to be replaced by a list of professions and types of jobs in which work permits will not be granted. These lists are to be issued by the starosts and are to be valid in the territory of each district.
Electronification of proceedings
Proceedings in cases concerning the employment of foreigners are to be electronified. The exchange of information between the province authorities and other institutions, such as the Border Guard or the National Tax Administration, is also to take place electronically.
Costs for entrepreneurs
It is planned that the fee for submitting an application for a work permit (employment of a foreigner) will be non-refundable even if the application is rejected. The purpose of this change is to reduce the number of incomplete or unjustified applications.
We continue to monitor the progress of the legislation and will keep you informed of further developments. Should you have any questions or doubts, please contact our team:
KONTAKT
E: magdalena.patryas@pl.Andersen.com
T: +48 32 731 68 84
M: +48 502 392 419
