The “gig economy” and the employment status of those working within it, has been in the spotlight in the EU recently. The same applies to Poland. Foreign employers may face a number of challenges in Poland in the light of the recent developments. This issue requires serious consideration.
Currently, there are three main categories of individuals in the workplace in Poland which are available to a foreign company - (a) employees, (b) self-employed contractors and (c) persons hired for a specific task (i.e. freelancers). The classification is crucial because it determines what rights and entitlements will apply. For example, an employee is entitled to holiday pay and sick pay, but a self-employed contractor is not.
Which option is the best depends on the specific circumstances and on what the parties agreed. Naturally, the best option from an employee point of view is the employment status. The self-employed contractor is the most popular solution because it gives a lot of flexibility to both parties. Sometimes, however there could be controversies whether the individual is self-employed rather than an employee.
If you utilise freelance or self-employed resource within your business, you ought to review your arrangements to ensure that:
- The reality of the arrangement is consistent with the label given to the individual (Labour Court will look at how the arrangement works in practice, not just what is stated in the contract).
- The self-employed person is not integrated into the business (i.e. they are not treated like employees).
- Any right of substitution is not in reality restricted.
In essence, employment status is under increasing scrutiny at the moment and that might be compounded if the process of harmonization is continued. If you utilise self-employed contractors, we recommend that you review your current arrangements to mitigate any risk of a self-employed contractor asserting employment status. Not only could that result in financial exposure, but it could also set an unhelpful precedent within your business
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