Sejm Decision on the Powers of the National Labor Inspectorate – Amendment Passed
On Wednesday, March 11, 2026, the Sejm passed an amendment to the Act on the National Labor Inspectorate (“the Act”).
We invite you to read this brief summary, in which we present the proposed changes and explain what the adoption of the Act means in practice for employers.
Scope of the Regulation
The main objective of the Act remains to limit the practice of entering into civil law contracts (contracts of mandate, B2B) in circumstances indicating the existence of an employment relationship. The changes include:
- the authority of the National Labor Inspectorate (PIP) to issue administrative decisions converting improperly concluded civil law contracts into employment contracts (“conversion decision”),
- the introduction of an “order to remedy violations” regarding the operation of a civil law contract or the actual performance of work by a person for remuneration under the terms of an employment contract, which precedes the conversion decision,
- the introduction of the possibility of obtaining an individual interpretation regarding the application of labor law provisions to determine whether the legal relationship described in the application constitutes an employment contract,
- the introduction of a safeguard in cases concerning the determination of the existence or content of an employment relationship, or in cases of appeal against a decision of the regional labor inspector, consisting in the fact that a civil law contract may be amended during the proceedings, terminated or rescinded only in accordance with the rules set forth in labor law regarding general and specific protection of employees against termination or rescission of an employment contract,
- the possibility for a regional labor inspector to file a lawsuit to determine the existence or content of an employment relationship, in particular when it is necessary to determine the existence of an employment relationship for a period prior to that which may be covered by the decision.
- data exchange between the National Labor Inspectorate (PIP), the Social Insurance Institution (“ZUS”), and the National Revenue Administration (“KAS”) for inspection purposes,
- the introduction of remote inspections by the PIP,
- a twofold increase in the maximum fine (up to PLN 5,000) that the PIP may impose in summary proceedings,
- a doubling of the fines provided for in the Labor Code—to amounts ranging from PLN 2,000 to PLN 60,000 (for offenses currently punishable by fines ranging from PLN 1,000 to PLN 30,000) and from PLN 3,000 to PLN 90,000 (for offenses currently punishable by fines ranging from PLN 1,500 to PLN 45,000).
Consequences for Employers
Importantly, the amendment does not provide for the automatic and immediate conversion of a contract into an employment contract by way of a decision. The date of issuance of the decision is considered the date of conclusion of the employment contract pursuant to the conversion decision, and if it is necessary to establish the existence of an employment relationship for a period prior to that which may be covered by the decision, a court ruling is required.
Additionally, a system for the voluntary rectification of violations by the employer has been introduced in the event that a labor inspector issues an order to convert a civil law contract into an employment contract prior to the conversion decision.
Pursuant to Article 34(2j) of the Act, as amended, the conversion decision, “from the date of its issuance, produces legal effects associated with the establishment of an employment relationship, under the provisions of labor law, tax law, social security and health insurance law, and mandatory contributions to the funds referred to in separate regulations”.
At the same time, pursuant to the amendment to Article 34(2k) added to the Act, the conversion decision “becomes enforceable on the day following the expiration of the deadline for filing an appeal, if neither party has filed an appeal, or on the date of a final court ruling, or on the date it is declared immediately enforceable.
Both of the above-mentioned provisions raise interpretative doubts. How does a conversion decision produce legal effects if it is unenforceable until one of the events listed in Article 34(2k) of the Act occurs? It appears that the solution to this apparent contradiction lies in assuming the retroactive effect of the conversion decision or the court’s ruling. This means that, upon the decision becoming enforceable, the employer will be obligated, for example, to pay advance PIT payments and social security contributions for the employee not only for the future but also for the period that elapsed from the date of the decision’s issuance until the moment it became enforceable. Some consolation may be found in the fact that, in our opinion, there will be no grounds for claiming interest on these payments for the retroactive period.
Similarly, the employee will retroactively acquire the right to leave in the appropriate amount; that is, upon the decision becoming enforceable, it may turn out that the employee is entitled to accrued leave, for example, for two years (the duration of the appeal proceedings until the decision becomes final).
At the same time, if a labor inspector files a lawsuit to establish the existence of an employment relationship during an earlier period, a final confirmation that an employment relationship existed between the parties to a civil law contract entails the obligation to:
- pay outstanding PIT advance payments along with interest,
- pay outstanding social security contributions along with interest,
- make corrections to VAT returns regarding the deduction of input VAT on purchased services (for B2B contracts).
Furthermore, if an appeal is filed against the issued decision or if a labor inspector files a lawsuit to determine the existence or content of an employment relationship, the court automatically grants a protective measure ensuring that the contract may be amended during the proceedings, terminated, or rescinded only in accordance with the provisions of labor law regarding general and specific protection of employees against termination or rescission of an employment contract. In practice, this protective measure will restrict the employer’s ability to freely terminate the contract and will require compliance with provisions such as:
- the obligation to consult with labor unions regarding the intention to terminate an employment contract,
- protection against termination during periods of absence or in pre-retirement age,
- the obligation to observe the notice periods applicable to employment contracts,
- the obligation to justify the termination in a clear and precise manner for the employee,
- the obligation to provide written notice of termination and to inform the employee of their right to appeal the termination to a labor court.
Entering into a civil law contract under conditions where, according to the Labor Code, an employment contract
should have been concluded in accordance with the proposed changes would also be subject to a fine ranging from PLN 2,000 to PLN 60,000 imposed on persons acting on behalf of the employer.
How to Prepare for the Upcoming Changes
In anticipation of the new regulations, it is advisable to review existing civil law contracts now for the risk of reclassification.
As part of our support, we offer:
- verification of existing civil law contracts and the practices surrounding their execution for the risk of reclassification,
- verification of existing internal regulations regarding employee benefits granted to collaborators,
- comprehensive support in implementing changes to mitigate the risk of reclassification
- taking into account labor law, personal income tax, and social security regulations.
We encourage you to contact Andersen’s experts, who will provide support in adapting to the new solutions and assist in preparing the relevant documents and internal procedures.
KONTAKT
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E: magdalena.kuczynska@pl.Andersen.com
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