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- How many more zlotys must employees on the lowest rates be paid from 2020?
- What is the latest date for granting employees outstanding annual leave for 2019?
- What is the 2020 holiday-leave coefficient used for cash compensation?
- By when must annual employee PIT returns be sent electronically to the tax authorities?
- What duties and deadlines apply to employers at the turn of the year regarding accident insurance, statistical reporting to the Central Statistical Office and setting up the company social benefits fund?
In 2020 the minimum wage increased by a record amount to PLN 2,600 gross, up by as much as PLN 350 year on year. Thus, every employer who specified a monetary amount in an employee’s employment contract should change the pay terms by making an agreement amending that contract. If the contract states the rate as “minimum wage” without an amount, the employer should inform the employee, preferably in writing, of the updated basic minimum wage.
Increase in the minimum hourly rate for mandate contracts
As the minimum wage increased in 2020, so did the minimum hourly rate for work under a mandate contract – from January it is PLN 17 gross. A service or mandate contract need not specify an hourly rate, because pay can also be agreed as a lump sum. However, before payment, the contractor or service provider has the right to check that the amount received divided by hours worked is not below the guaranteed minimum rate.
Changes in the minimum wage also change the related indicators, for example the basis for the night-work allowance, deductions and the minimum basis for benefits.
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Outstanding annual leave
As regards leave, remember that annual leave should be granted in the year in which employees become entitled to it. Every employer should therefore have granted unused leave by the end of 2019 to employees who still had days available. If that was impossible, the outstanding leave carries over to the following year, but should be used by the end of September 2020 at the latest.
Leave on demand (four days in each calendar year) does not carry over to the next year as such. If an employee did not use it, it becomes ordinary leave in the following year.
All employees became entitled to a new annual-leave allowance on 1 January 2020. Depending on each employee’s length of service, it may be 20 or 26 days in a calendar year. Part-time employees have their leave calculated proportionately to their working hours; people with moderate or significant disabilities are entitled to an additional ten days off.
Cash compensation for leave
Sometimes an employee must be paid cash compensation for unused annual leave, for example if the employer terminates the contract during the year or it expires. To calculate that compensation correctly, the holiday-leave coefficient is needed. It depends on the number of days off and statutory holidays in a calendar year, and is therefore usually calculated anew each year. In 2020 it is PLN 21.08. The coefficient for a given year applies as stated only to full-time employees. Part-time employees use the same coefficient, reduced proportionately to their working time.
Leave plan for 2020
Well-organised companies use annual leave plans for the whole year. Remember not to include leave on demand in such a plan. The plan must be communicated to employees in the manner adopted by the employer.
Working time schedule
Under the Labour Code definition, working time may not exceed eight hours per day and an average of 40 hours in an average five-day working week, over an accounting period of no more than four months. In 2020 two holidays fall on Saturdays, 15 August and 26 December. Employers therefore need to designate other additional days off for employees to plan working time schedules correctly. Part-time employees under employment contracts have reduced working hours proportionate to full-time hours.
Annual PIT-11 return
The Personal Income Tax Act requires employers to calculate and remit income-tax advances for their employees.
Annual PIT-4R, PIT-8AR and PIT-11 returns must be delivered electronically by 31 January 2020 to the tax office competent for the employer’s registered office.
By the end of February 2020, every employer who engaged an employee under an employment contract or a contractor under a civil-law agreement in the previous year must also deliver PIT-11 to that person. An exception applies if the total remuneration due under that contract does not exceed PLN 200 gross. The employer then only has to remit the so-called flat-rate income tax of 17% and is not obliged to prepare PIT-11.
PFRON contribution and return
The number of employees is the main criterion for the obligation to pay into the State Fund for Rehabilitation of Disabled Persons. Employers who employ at least 25 people on a full-time-equivalent basis in a month and do not achieve the prescribed proportion of disabled employees in that month must make payments and submit monthly returns by the 20th of each month for the previous month. The annual PFRON return for 2019 must be filed by 20 January 2020.
Accident insurance
By 31 January 2020, employers had to send the Social Insurance Institution the ZUS IWA return for 2019. It should contain information on workplace accidents and people employed in hazardous conditions. If an employer files ZUS IWA for three consecutive calendar years, the Social Insurance Institution will use those documents to calculate the accident-insurance contribution rate effective from 1 April 2020 to 31 March 2021. Employers who did not file ZUS IWA in the previous year determine their rate themselves according to their economic activity group (PKD classification).
Not all entrepreneurs have to submit ZUS IWA. The obligation applies to payers who jointly met these conditions:
- they were continuously registered with ZUS as accident-insurance contribution payers from 1 January to 31 December 2019 and for at least one day in January 2020,
- they reported at least ten insured people for accident insurance in 2019,
- they were listed in the REGON register on 31 December 2019.
Reporting to the Central Statistical Office
Employers must also submit annual information to the Central Statistical Office using these forms:
- Z-05 (labour-demand survey) – this form had to be submitted by 9 January 2020,
- Z-06a (report on employed persons, wages and working time) – prepared by entities required to submit quarterly Z-03 reports in 2019, and filed by 18 January 2020,
- Z-06b (report on employed persons, wages and working time) – prepared by business-sector entities and filed by 4 February 2020,
- Z-10 (report on working conditions) – prepared and filed by 15 February 2020.
Duties relating to the company social benefits fund
The company social benefits fund is formed from an annual basic allocation based on the average number of employees. The calculation uses the planned average employment, adjusted at year-end to the actual average. Whether an employer must establish the fund depends on employment as at 1 January of the calendar year. In 2020, employers with at least 50 full-time-equivalent employees on 1 January 2020 had to establish it. If an employer has at least 20 but fewer than 50 full-time-equivalent employees, it must establish the fund if a trade union requests it. Other employers, namely:
- those with fewer than 50 full-time-equivalent employees on 1 January, or
- those with at least 20 but fewer than 50 employees whose trade union has not requested a fund,
may establish the fund voluntarily or pay a holiday benefit. Employers with at least 50 full-time-equivalent employees where no trade union operates, or where the union does not demand a fund, may decide not to establish it for a fixed period or indefinitely, or reduce the allocation rate by amending internal rules (a collective agreement or remuneration regulations). However, an employer cannot do this unilaterally.
As the article shows, employers have many obligations to different authorities, making it easy to lose track. I hope the above information will be helpful.
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