New Rules on Contract Reclassification

Choosing the right form of cooperation is becoming increasingly important as contract arrangements in Poland are being more closely monitored. This comes alongside growing powers of state authorities to review agreements and prevent the use of civil law contracts instead of employment contracts.

Different forms of cooperation

In Poland, there are various legal forms governing cooperation between worker and hiring entity, tailored to different needs and the nature of the work performed. The primary form of performing work is an employment contract which guarantees the full scope of employee rights, including working time limits, entitlement to paid annual leave, maternity and sick leave, social security coverage, and strict rules for termination. It is also possible to establish cooperation under civil law contracts (contract of mandate, contract for specific work, or so called self-employment). These arrangements are not governed by Polish Labour Code and therefore provide no statutory labour protections. 

The choice of contract can be reviewed

An employment contract should be concluded where a specific type of work is performed personally by an individual, for and under the direction of the employer, at a designated place and time. However, to avoid some formalities associated with employment contracts, parties often opt for civil law contracts. Such contracts are easier to terminate and are usually more favourable in terms of public-law charges.

Whether a given legal relationship - despite being formally based on a civil law contract - may in fact constitute disguised employment can be verified, e.g. during inspections by the competent authorities. When assessing a particular situation, not only the wording of the contract is taken into account, but also (and primarily) the way in which it is performed in practice. For example, authorities may examine whether the same or similar work is performed by employees, whether service providers (contractors) are assigned specific positions, included in internal organisational structures, and reflected in reporting lines. There are many factors to consider, so it is worth reviewing them before choosing the right form of cooperation. 

Such a review may be initiated not only by public authorities, but also by the service providers (contractors) themselves. If it is determined that a civil law contract in fact constitutes disguised employment, it may be reclassified as an employment contract.

Severe consequences of reclassification

Reclassification may lead to consequences both in the relationship between service providers (contractors) and the employing entity, as well as in terms of public-law obligations. As for the consequences for employers, the most common include:

• claims brought by service providers (contractors) for employee-type benefits, such as those arising from remuneration policies, bonus schemes, or the Labour Code (e.g. claims for paid annual leave or payment in lieu of unused leave) for the past three years,
• fines imposed on the decision-makers of the entity (as a rule, members of the management board) of up to PLN 30,000 (approx. EUR 7,070.78), and as of July 8, 2026, even up to PLN 60,000 (approx. EUR 14,141.55),
• payment of outstanding social security contributions together with interest and an additional penalty of up to 100% of the unpaid contributions (subject to a 5-year limitation period), and
• payment of outstanding personal income tax together with interest (subject to a 5-year limitation period), as well as the obligation to correct tax returns.

New powers of the State Labour Inspectorate

Until now, the reclassification of a civil law relationship into an employment relationship was most often carried out by a court, through appropriate legal proceedings. Such proceedings were typically initiated by service providers (contractors) or the State Labour Inspectorate. Certain powers in this area are also held by the Social Insurance Institution.

In mid-2025, work began on granting the State Labour Inspectorate the authority to reclassify a civil law contract into an employment contract. Under the new amendment:

• the Labour Inspector will be authorised to issue a decision converting a civil law contract into an employment contract,
• the decision will take effect in labour law, tax, and social insurance matters as of the date of issuance, but as a rule, it will not be immediately enforceable (except for persons covered by special protection against termination of employment contract).

The new rules will enter into force on July 8, 2026. The amendment has been also submitted to the Polish Constitutional Tribunal for review. However, it will remain in force until the Tribunal rules that it is inconsistent with the Polish Constitution.

AUTHOR:

Marta Rogocz is an attorney-at-law at our Polish member firm Zawirska Ruszczyk and a member of the Warsaw Bar Association. Author of numerous press publications. She has extensive experience in areas such as employee disputes, personal data protection, compliance, regulatory matters, and redundancies. She brings over ten years of professional experience gained at recognised law firms.