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Employment in Poland

Polish employment law appears complex and confusing when looking from outside view although in some ways there are many similarities to other countries. The following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Poland.

Key points on employment in Poland

There are several key areas to be aware of within Poland’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department.  These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.

  1. Contracts

    The labour code sets out a number of employment contract types, including a contract for a trial period, fixed term, specific work or unlimited term.

    No matter which type of contract, at a minimum Polish employment contracts must define the parties to it, its type, date of conclusion and conditions of work and remuneration in writing. Any amendments to conditions of pay or work require a written from.

    Part time employment contracts also exist, although they may not stipulate lesser working conditions than full type employees would receive.

    Unlimited period contracts are the most typical, although recently there has been increasing shift towards fixed-term contracts or civil law agreements.

    Polish employment law does not clearly define the length of a fixed term contract, however, the courts have leaned towards a period of five years or less.

  2. Probation periods

    Employers may set a trial period of up to three months to precede a contract for an unlimited term or for specific work. At the conclusion of the trial period, the employer may not arrange for another trial period.

    Theoretically, only one trial period may be arranged between an employer and employee, although the period may extend beyond three months if the concluded contract sets the trial period to be shorter.

  3. Termination procedures

    For contracts of indefinite or trial periods, either party is entitled to terminate the employment contract without notice. For other contract types, the length of notice required is contingent upon the duration of employment with the employer:

    • If the duration of employment has been less than six months, two weeks’ notice is required
    • If the duration of employment is between six months and three years, one month’s notice required
    • If the duration of employment exceeds three years, three months’ notice required

    Any decision to terminate must be in writing and should include a statement which details the reasons for termination and any steps the employee may take to appeal the termination. If applicable, the employee’s trade union must also be notified in writing.

    Employers are entitled to terminate without notice under the following circumstances:

    • Serious breach of the employee’s basic duties
    • An offence is committed that prevents the employee from performing their future duties – it must be obvious or confirmed by a court judgment
    • The employee loses a license necessary for performance of their work by their own fault
    • The employee becomes ill or incapable of working for more than three months
    • The employee fails to attend work for over a month without a justified reason other than the aforementioned

    Employees may terminate an employment contract without notice if:

    • A medical certificate is issued stating that their work is harmful to their health, and the employer has not made efforts to reallocate the employee to a more suitable position
    • The employer committed a severe violation of their basic duties. This also gives rise to the right for compensation

    Collective dismissals are also possible for employers with more than 20 staff members within a period of maximum 30 days. To be classified as collective dismissal, the number of employees dismissed must be:

    • At least 10 employees, if the employer employs less than 100 persons
    • 10% of employees, if the employer employs at least 100 but less than 300 persons
    • 30 employees, if the employer employs 300 or more persons.

    The process for collective dismissals heavily involves trade unions, and requires extensive consultation from unions. Written notice must be delivered to the local labour office and agreement reached between the employer and company trade unions.

    Severance pay is as follows:

    • One month’s salary, if the employee has worked for less than two years
    • Two months’ salary, if the employee has worked for two to eight years
    • Three months’ salary, if the employee has worked for more than eight years.
  4. Statutory leave

    There are laws that regulate leave periods based on years of service and the type of leave requested, including:

    1. Annual Leave: for a period of either 20 or 26 days depending on the duration of employment. This is granted for the employee’s regular working days.

    2Maternity Leave: Female employees are entitled to 20 weeks maternity leave. Fathers have the right to 2 weeks paternity leave.

     3. Sick Leave: employees are entitled to 33 days of sick leave at a minimum 80% of their regular compensation for illness during the calendar year at the employer’s discretion. Employees are entitled to 100% remuneration if incapacity to work is a result of a work-related accident, illness during pregnancy or medical testing on candidates for organ, tissue or cell donors.

  5. Pensions and benefits

    There are requirements for both employee and employer contribution rates based on a percentage of salary.

    The categories of Welfare Contributions include:

    • Pensions:  Employer contributes 9.76% of salary and employee contributes an additional 9.76%
    • Medical Insurance: Employee contributes 2.45%
    • Invalidity Pension:  Employer contributes 6.5% and the employee contributes 1.5%
    • Accident Insurance:  Employer contributes between 0.67% and 3.85% and the employee does not contribute
    • Health Insurance:  Employee contributes 9% of salary
    • Labour Fund: Employee contributes 3.45% and the employer does not contribute

Outsourcing Employment Through a GEO Employer of Record Service

Compliance with local employment requirements is just one of the issues foreign companies face when employing staff in Poland. For companies which intend to employ their staff directly through their incorporated Polish entity, professional legal advice is recommended. Shield GEO provides an alternative path for companies to outsource the employment of their staff in Poland.

As a Global Employer Organization (GEO), Shield GEO acts as the Employer of Record and ensures the employment is compliant with host country regulations regarding employment. In addition Shield GEO will handle payroll processing, tax and immigration. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Poland. The Shield GEO solution is an attractive alternative where

– the company is looking to employ staff quickly

– the company doesn’t have an appropriately incorporated entity in Poland

– the company wants to work within a defined budget

– the company wants to limit its initial commitment in Poland

– the company needs help with tax, employment, immigration and payroll compliance in Poland

Shield GEO can contract directly with the company to employ and payroll their staff in Poland. Shield GEO supplies local employment contracts for the staff which ensure that local statutory requirements are met covering issues such as termination, probation periods, leave entitlements and statutory benefits.  Shield GEO is able to advise companies how to cover local employment regulations whilst still providing consistent global employment policies. Understand more about outsourced employment through Shield GEO.

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