New powers of PIP (Państwowa Inspekcja Pracy)

The Polish government is planning significant changes to the competences of the National Labour Inspectorate (Państwowa Inspekcja Pracy, PIP) starting on 1 January 2026. According to the draft legislation:
 

• PIP will be granted far-reaching powers to issue administrative decisions reclassifying civil law contracts - such as contracts of mandate (umowa zlecenie), contracts for specific work (umowa o dzieło), and B2B cooperation contracts - into employment contracts.
• This administrative decision by a labour inspector will be immediately enforceable, requiring employers to treat contractors as full employees from the date of the decision.
• The burden of proof will shift to employers or contractors to demonstrate that the working relationship does not constitute employment.
• The decision will specify employment conditions like type of work, working hours, workplace, start date, and remuneration (minimum wage if not specified).
• Employers will then have obligations such as creating employee records, registering for social security (ZUS), paying contributions, withholding income tax advances, and providing employee rights (e.g., paid leave, dismissal protection).
• The new rules will also apply retroactively to contracts signed before the law takes effect if they remain in force.
• Appeals against PIP decisions will be possible but limited to an extremely short seven-day window.
• PIP will receive data from social security and tax authorities (ZUS and KAS), enabling more effective inspections.
• The draft also envisages much higher fines and an increase in PIP’s budget and staffing to enforce these changes.

 
If the proposed legislative changes are adopted, starting on 1 January 2026, PIP will acquire new and far-reaching powers in the area of employment regulation. In particular, PIP will be authorized to issue administrative decisions reclassifying civil law contracts - such as contracts of mandate (umowa zlecenie), contracts for specific work (umowa o dzieło), as well as B2B cooperation contracts - into employment contracts.
 
Such reclassification will carry significant legal and financial consequences for the employer:
 

• Labour law: Workers previously engaged under civil law arrangements will be granted full rights and protections under the Labour Code, including limits on working time, entitlement to annual leave, and protection against termination without cause.
• Taxation: Employers will be required to adjust settlements for personal income tax, potentially for past periods covered by the PIP decision.
• Social security contributions: Employers will face additional obligations to pay outstanding social security contributions (ZUS), including for retroactive periods.

 
Importantly, PIP decisions are immediately enforceable unless the employer files an appeal within the statutory timeframe. In practice, this means that a failure to challenge such a decision will result in the automatic recognition of the employment relationship, together with all corresponding obligations.
 
These reforms represent one of the most significant planned changes in Polish labour law in recent years, radically shifting the power to reclassify working relationships away from courts to an administrative body, with immediate and binding effects for employers
 
The new powers of PIP significantly increase the risks associated with the widespread use of civil law or B2B contracts as alternatives to standard employment contracts. Companies employing personnel under such arrangements will need to reassess their practices before the new rules enter into force to avoid financial exposure and compliance challenges.