Nawrocki Signs PIP Reform: Inspectors Gain Power to Reclassify Sham Contracts as Employment Deals

President Nawrocki has signed amendments to the Law on the State Labour Inspectorate (Państwowa Inspekcja Pracy, or PIP), effective three months from publication in the Journal of Laws (likely entering into force at the end of June).
 
This reform strengthens PIP’s enforcement powers against “sham” contracts - civil law agreements (e.g., mandate or commission contracts) or B2B deals disguised to evade employment protections. Key change: PIP inspectors can now directly reclassify these as employment contracts, shifting the burden to employers to challenge via appeals.
 
Core Mechanism: Reclassification Power
 
Inspector’s Role: During inspections, if PIP finds an employee performs tasks like an employee (subordination, fixed hours, employer control) but under a non-employment contract, the inspector may issue an order obliging the employer to remedy the situation by introducing changes to the agreement to make it compliant. If the order is not carried out as demanded, the inspector may issue a binding decision which converts the contract into a full employment agreement under the Polish Labour Code.
 
No Retroactive Effects: The inspector’s decision does not have retroactive effect - it is binding from the moment of issuance. However, the inspector’s decision is immediately suspended if the employer appeals to the court (within 14 days). Employee status only takes full effect after a final, non-appealable court judgment confirming the decision.
 
Evidence Threshold: PIP relies on factual indicators like work instructions, reporting lines, exclusivity, and economic dependence – aligning with prior Supreme Court precedents (e.g., on bogus self-employment).
 
Appeal Process
 
The amendment tries to balance enforcement with due process:
 

1. First step: Employer may file an appeal to the district labour court (sąd rejonowy) via regional labour inspector (okręgowy inspektor pracy) – within 1 month of the inspector’s decision. If the regional labour inspector finds the appeal to be fully justified, they may amend or overturn the contested decision. In that case, the appeal is not pursued further. If regional labour inspector finds the appeal to be unfounded, they refer it to the court for consideration.
2. Second step: The appeal will be reviewed by the district labour court (sąd rejonowy).
3. Third step: The losing party may appeal to the II instance labour court (sąd okręgowy).

 
Practical Impacts on Businesses
 
Real-world consequences for businesses in Poland could be negative:
 
Financial Exposure: Retroactive reclassification could trigger ZUS (social security) arrears, plus penalties up to 60,000 PLN per case under PIP fines.
Operational Disruptions: Immediate compliance orders during inspections (e.g., granting holiday pay) could halt operations if not appealed quickly.
Audit Triggers: PIP prioritizes high-risk sectors like IT, the gig economy (e.g., delivery apps), construction, and outsourcing.
 
Compliance Checklist
 
Action items for contractor classification compliance (pre-June 2026):
 

• Review contracts for red flags: fixed schedules, tools provided by the employer, and performance metrics.
• Document independence: invoices, multiple clients, and self-scheduling.
• Train HR personnel on PIP inspections and prepare appeal templates.
• Conduct internal audits before June 2026.

 
Woźniak Legal has the know-how and experience in employment matters to help you succeed. Our team guides you through every stage – from contractor classification compliance program to preparing new documents - minimizing risks like overlooked liabilities or regulatory hurdles while uncovering hidden issues.
 
Please contact us on office@wozniaklegal.com.
 
You can also email me directly on grzegorz.wozniak@wozniaklegal.com.