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On 8 July 2026, the National Labour Inspectorate gained new powers allowing it to challenge civil-law contracts, including B2B cooperation, more effectively where the arrangement actually has the characteristics of an employment relationship. In certain cases, a district labour inspector can now issue an administrative decision establishing the existence of an employment relationship. What should employers and employees know about such reclassification, and what consequences can it have? Read on.
The reform of the National Labour Inspectorate has become a reality
The long-announced and controversial reform of the National Labour Inspectorate entered into force on 8 July this year. We already discussed all the key provisions of this amendment in May this year in the article “The President has signed the PIP reform — what does the new PIP Act mean for entrepreneurs and employers?”.
However, the most significant change for entrepreneurs is undoubtedly the expanded range of powers of PIP authorities, including the possibility for a district labour inspector to issue an administrative decision establishing the existence of an employment relationship.
The first figures from the National Labour Inspectorate show that the new powers are already being used to some extent in practice. According to information published on the PIP website, between 8 July and 13 August this year more than 100 inspections were carried out concerning the justification for using civil-law contracts, and 121 written orders to confirm employment under an employment contract were issued. Although, as of the date the information was released, none of these cases involved circumstances justifying the initiation of administrative proceedings leading to a decision, it is already essential to understand what consequences such possible reclassification could have for employers and employees.
Consequences for the employer of a district PIP inspector reclassifying a B2B contract as an employment contract
Let us begin with the fact that the amendment to the Act on the National Labour Inspectorate and certain other acts increased penalties for offences against employees’ rights. The list of these offences is set out in Article 281 of the Labour Code and also includes concluding a civil-law contract where an employment contract should have been concluded.
In this context, however, Article 16 of the amending act should be noted, as it introduces a 12-month amnesty period for these penalties. Under this provision, an entity which, before the act entered into force (that is, before 8 July 2026), concluded a civil-law contract with a person performing work, or for which a person actually performed paid work, even though the relationship had all the characteristics of an employment relationship, and which voluntarily brings the situation into compliance with the law by concluding an employment contract within 12 months of the act entering into force (that is, by 8 July 2027), will not be subject to a fine, which currently ranges from PLN 2,000 to PLN 60,000.
Recognising the cooperation as employment and the district labour inspector issuing an administrative decision to that effect establishes the existence of an employment relationship and consequently entails the need to apply labour-law provisions and the rules governing employees’ compulsory social insurance and health insurance.
For the employer, this means, among other things, the need to:
- Pay the employee’s social and health insurance contributions;
- Calculate, collect and remit PIT advance payments;
- Provide employees with safe and hygienic working conditions and conduct training in this area;
- Pay remuneration correctly and on time;
- Prevent discrimination in employment;
- Comply with all other rules relating to the employment relationship.
It should also be noted that the PIP decision itself takes effect in establishing an employment relationship from the date it is issued. However, if the existence or terms of an employment relationship need to be established for an earlier period, the district labour inspector may bring an action before the labour court. Earlier periods may also be examined by other authorities (including ZUS and the tax authorities) within their statutory powers.
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Consequences for the employee of converting a B2B contract into an employment contract
For the employee, reclassifying a B2B contract as an employment contract means both acquiring the rights enjoyed by employees and becoming subject to new obligations.
The former include, in particular, the right to annual leave (that is, 20 or 26 paid days off work per year), a guarantee of timely payment of remuneration and other legal guarantees and protective arrangements provided for in the Labour Code.
Employee obligations, on the other hand, include:
- Following instructions from supervisors relating to work;
- Observing the working hours established at the workplace;
- Observing the work regulations and workplace rules introduced at the workplace;
- Complying with employment regulations and occupational health and safety rules.
It should also be remembered that reclassifying a civil-law contract as an employment relationship entails a change in the source of income — from non-agricultural business activity to income under an employment contract. A change in the classification of income can have significant tax consequences. Employment income is settled under the rules applicable to employment relationships, and employees generally use statutory tax-deductible costs rather than the cost-accounting rules applicable to business activity.
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Summary
Consequences of reclassifying a B2B contract as an employment contract from the employer’s and employee’s perspectives
On 8 July 2026, the National Labour Inspectorate gained new powers under which district PIP inspectors may, in justified cases, issue administrative decisions establishing the existence of an employment relationship.
Such a decision can have far-reaching consequences for both employers and employees. For both parties, an employment relationship means new rights and obligations.
It should be remembered that, although a PIP decision takes effect in establishing an employment relationship from the date it is issued, earlier periods may be examined by other authorities (in particular ZUS and the tax authorities). If the existence or terms of an employment relationship need to be established for an earlier period, the district labour inspector may also bring an action before the labour court.
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