- Business in Poland -

Labor Laws

1.Labor law legislation

In Poland, labor issues are regulated in several acts and regulations but mainly in the Labor Code which provides for the rights and obligations of employer and employee, with a wide range of benefits and protection for employees.

Labor Code applies only to those working under employment relationships (mainly based on employment contracts) while in Poland it is common to use other forms of employment as well: contract of mandate, specific-task contract, or self-employment (Business-to-Business contracts). They are not subject to Labor Code as they are regulated by the civil law (mainly Civil Code). Other forms of employment shall not be used to hide an employment relationship.

There are several types of employment contracts: for an indefinite period of time, for fixed period of time (up to 33 months and not more than 3 such contracts), for a trial period. An employment contract for a trial period may be concluded for no more than 3 months, depending on the duration for which the parties intend to conclude a subsequent contract. The trial period may therefore only be 1 or 2 months if the subsequent contract will be a fixed-term employment contract for less than 6 months or 12 months respectively. These (1- or 2-months’) trial periods may be extended by a maximum of 1 month if justified by the nature of the work. Furthermore, the employment contract for a trial period may in any case be extended by the time of a leave or other excused absence if the parties provide for this in the contract.

National Labor Inspectorate is an authority established in order to supervise and inspect the observance of labor law by employers, in particular occupational safety and health rules and legality of employment.

2. Working time

The basic working time system provides for a maximum of 8 hours per day and an average of 40 hours per week in an average 5-day week. Several different working time systems are possible if justified, including a balanced working time system under which the working time may be extended by up to 12 hours balanced by a shorter working time or with days off.

Work performed in excess of the binding working time is overtime which entitles an employee, in addition to the regular remuneration, to a bonus in the amount of 100% or 50% of remuneration (depending on when the overtime occurs). Alternatively, in exchange for overtime, an employer may grant the employee time off equal to the overtime (on the request of an employee) or equal to one and a half times the number of hours worked overtime (without the employee’s request).

As a rule, employees managing the workplace are not entitled to overtime compensation.

3. Minimum wage and other benefits

The Polish law provides for a minimum wage for the employees on the employment contract. The amount of the minimum wage may vary every year. In 2022 3,010 PLN gross per month. At the beginning of 2023, the minimum wage was 3490,00 PLN gross. From July 2023, the minimum wage will be 3600,00 PLN gross.

The minimum hourly rate is regulated for those who work under a contract of mandate. In 2022 it was equal to 19.70 PLN gross per hour. From January 2023 it is equal to 22,80 PLN gross per hour and from July 2023 it will be 23,50 PLN gross per hour.

Specific benefit offered to the employees in the form of welfare is related to the Social Benefits Fund – a fund that shall be created and financed by an employer who hires at least 50 employees. However, an employer may opt out from creating the Social Benefits Fund under specific conditions.

4. Leaves

Employees are entitled to 20 or 26 days (depending on the overall tenure and years of education) of paid holiday leave per year. Employees are also entitled to sick leave with a compensation equal to 80% which is covered by the employer only during the first 33 days of sick leave – then the compensation is paid by the public Social Insurance Institution (ZUS). There are some differences in this regard applying to employees who are 50 years old or more and pregnant employees.

At the employee’s written request, the employer may grant unpaid leave. The period of unpaid leave is not included in the period of service on which the employee's rights depend. The employer may also grant the employee unpaid leave to perform work for another employer.

A specific type of absence from work is time off from work on grounds of force majeure. Employees are entitled to 2 days or 16 hours of absence at work for reasons of force majeure for urgent family reasons in the case of illness or accident making the immediate attendance of the worker. The time off from work is paid in the amount of 50% of the remuneration.

Employees are also entitled to care leave during a calendar year to provide personal care or support to a person who is a family member or living in the same household and who requires care or support for serious medical reasons. This leave can be taken at one time or in parts. The size of the leave is 5 days and the employees do not receive remuneration for taking it.

5. Parental benefits

Polish Labor Code provides for a wide range of benefits and privileges related to pregnancy and parenthood. A pregnant employee is protected against termination of employment and against detrimental working conditions, including overtime work and working at night. A mother-employee is entitled to overall 52 weeks of paid maternity and parental leave. 41 weeks of this parental leave may be shared between both parents. Each employee-parent has an exclusive right to 9 weeks of parental leave. This right is not transferable to the other employee-parent. The Social Insurance Institution (ZUS) covers the compensation paid during maternity and/or paternity leave.

The employees are entitled to 36 months of unpaid upbringing leave until a child is 6 years old. Within the 36 months of parental leave, 1 month is dedicated exclusively to the other parent. As a rule, the upbringing leave provides protection against termination (with a few exceptions).

The father-employee is also entitled to paternity leave of up to 2 weeks until the child is 12 months old.

Other categories of employees protected against termination of employment include employees in pre-retirement age, trade union activists, and employees using sick leave (up to a certain time period).

6. Dismissal

There are four main modes of termination of employment contract: (i) termination upon notice; (ii) termination without notice due to employee’s fault; (iii) termination without notice through no fault of an employee; (iv) mutual agreement.

Termination upon notice of an employment contract for an indefinite period of time and fixed-term employment contract requires providing written reasons justifying termination. Notice period equals 2 weeks, 1 month, or 3 months depending on the tenure at the given employer.

Termination without notice due to the employee’s fault may be justified with a severe breach of the employee’s obligation and shall be handed out within 1 month of acknowledging this breach by the employer.

Termination without notice through no fault of an employee may occur after a defined period of time when an employee uses a long-term sick leave and does not return to work.

In the described situations an employee may appeal to a labor court and demand either compensation (as a rule up to 3 months remuneration) or reinstatement to work if the provided reasons for termination were not true or not justified or the termination occurred outside the time limits provided by the Labor Code.

In case of redundancy occurring at the employer hiring at least 20 employees, an employee will receive an additional severance payment in the amount of 1- to 3-months remuneration.

7. Retirement age and benefits

The retirement age in Poland is 60 years for women and 65 years for men.

There are mandatory monthly contributions for retirement insurance paid to the Social Insurance Institution (ZUS), financed by the employer and employee (included in the monthly remuneration). In addition, the employer must offer an Employee Capital Plan - a voluntary long-term saving system for employees co-financed by employers (compulsory contribution is 1,5% of the employee’s monthly remuneration), employees, and the state.

8. Remote work and occasional remote work

Due to the Polish Labor Code employees are entitled to working remotely on command of the employer or on request of the employee. In certain cases, the employer is obliged to allow the employee to work remotely (e.g. in the case of an employee raising a child up to the age of four). The terms and conditions of performing remote work may be agreed upon at the time of conclusion of the employment contract or during employment. Remote working can be done either full-time (completely outside the employer’s premises,  at a place indicated by the employee and agreed by the employer) or part-time - both on- and outside the employer's premises. The employer is obliged to provide the employee with the materials and tools to perform remote work. If the employee uses their own items, the employer must pay the employee a cash equivalent or a lump sum. Besides, the employer is in any case obliged to reimburse the costs of electricity and telecommunication services to an appropriate extent.

Occasional remote work may be performed occasionally, from time to time, at the request of the employee made in writing or electronically. The permissible length is 24 days per calendar year. The employer is not obliged to reimburse any expenses incurred by the employee in connection with the occasional remote work.