Over 2.3 million Poles hold contracts for specific tasks and creative works. At times, workers are encouraged to opt for such contracts that “pretend” to be employment contracts. However, data from the Ministry of Labour reveals that only around 2 percent of individuals, approximately 7,000 creators, use creative work contracts as their primary form of employment. The remaining 98% use these contracts to supplement their employment earnings. To eliminate labour market pathologies, it is not necessary to “treat as employment” all civil law contracts. It is enough to adhere to and enforce existing Polish law, including Article 22, § 1 of the Labour Code.
In some sectors of the economy, particularly in administration and support activities, civil law contracts are utilised as a form of permanent cooperation. There are instances where such contracts are used instead of employment contracts, despite the fact that employees have regular working hours, a workplace designated by a supervisor, repetitive or similar duties identical to full-time employees. These workers also have a fixed salary, paid holidays, and paid sick leave. Both parties benefit – employers seeking to reduce employment costs, which have risen significantly in the last 2-3 years, and employees, who receive a higher net salary, opt for task contracts instead of employment contracts.
However, there is a need to distinguish the collaboration with freelancers, of which there are just over 330,000 in Poland, who mainly use creative works contracts to complete small tasks from individuals who cooperate permanently and instead of employment contracts work on task contracts.
Przemysław Głośny, CEO of Useme.com, opines, “We are unequivocally in favor of adhering to existing law. However, there is no need to ‘treat as employment’ all contracts to eliminate labour market abuses. All it takes is for relevant authorities, like the State Labour Inspectorate or the Social Insurance Institution (ZUS), to enforce the existing provisions of the labor code.”
Every year, more than 1.6 million creative contracts are reported to ZUS, translating to approximately 350,000 people signing such contracts. The Ministry of Family, Labor and Social Policy recently pointed out that creative contracts are rarely used as the primary form of earning a living. According to the Ministry’s estimates, only about 2 percent or approximately 7,000 creators work on creative contracts considering this as a primary source of income. Why then does the Ministry want to “treat as employment” all 1.6 million creative contracts and, in doing so, punish over 330,000 freelancers for their entrepreneurial and professional activity, reducing their earnings by almost a third?
The data from the Central Statistical Office (GUS) reveals that in 2023, most people (18.8%) working on task contracts were employed in the “Administration and Support Activities” sector. The second largest group involved the “Health Care and Social Assistance” sector, where women were the majority, accounting for 83% of those employed.
Legislation has been created under the labor code to foresee situations where employers will try to replace employment contracts with civil law contracts. Polish law is clear on the distinction between an employment contract and a contract for a task or creative work, and explicitly prohibits the substitution of one for the other.
Differences between these contract types include the type of work performed for the employer, supervision by the employer, and the location and timing of work, which are determined by the employer.
The majority of Polish freelancers consider freelancing as an additional source of income, implying that they are already employed – under an employment contract – and hence already pay all contributions, such as health, pension, or sick leave. Therefore, charging contributions from all contracts will lead to freelancers paying contributions in one month from several contracts, which will not facilitate nor hasten access to health care or a decent retirement pension.
An additional important argument in the discussion about “treating as employment” civil law contracts is the fact that the state budget would receive only about 0.6 billion PLN annually from contributions from creative contracts. In 2023, ZUS collected contributions exceeding 400 billion PLN. Therefore, an additional 0.6 billion PLN from creative contracts would only increase the annual ZUS budget by 0.15%, which is a symbolic amount in the context of the Polish Social Insurance Institution or the Polish State budget.
Source: https://managerplus.pl/ozusowanie-umow-cywilnoprawnych-jakie-konsekwencje-dla-rynku-pracy-i-freelancerow-31063
