Employment Contracts in Poland. In the Czech Republic and Slovakia, you can also work on the basis of contracts other than an employment contract. In Poland it’s a bit different. Among other things, you may encounter the Polish version of a work contract and a contract for works. What are the advantages and disadvantages of each contract? How about a holiday? What happens in the event of incapacity for work? We will try to answer these and other questions in today’s article.
Employment Contracts in Poland (Umowa o pracę)
From the employee’s point of view, this is the contract that provides the most security. You have the right to paid leave, sick pay and, in the event of termination of employment, the right to keep your notice period. From the employer’s perspective, this is the most costly form of cooperation. In addition to the salary itself, it pays your advance tax, social security and health insurance, and pays for 33 days a year in case you are unable to work. If you’re just starting out in Poland, it’s the best way to work with your new employer.
Employment Contract and Incapacity for Work
It happens to everyone, we all get sick from time to time. But what does it look like in Polish practice if such a situation arises?
The incapacity benefit is paid either by ZUS (the national insurance company) or by your employer (in the context of the total amount of time you are unable to work during the calendar year) and is usually 80% of your salary. There are exceptions to this as well. In some cases, support may be higher, in others lower. 100% of the salary particularly applies to pregnant women who cannot work before taking maternity leave due to their pregnancy. However, the highest possible support also applies to other employees, receiving it in the following cases:
- If the incapacity for work is caused by an accident on the way to or from work
- In the event of an accident at work or occupational disease
- In the event of the necessary examination of cell, tissue and organ donor candidates or incapacity for work caused by the procedure itself
In some cases, there may also be a reduction in the amount of the incapacity benefit. These are mainly situations where the employee has not sent a certificate of incapacity for work to the employer within 7 days (the amount of the benefit is reduced by 25% from the eighth day). However, we will not encounter this practically anymore, because since 01. 07 2018, the sickness certificate is issued electronically and the entire process is automated.
Paid leave is only due to employees working under an employment contract. If you have worked for less than 10 years, you are entitled to 20 days’ holiday. If you have at least 10 years’ service, you can count on 26 days. Remember that completed studies, including secondary and higher education, count towards your length of service. You can also take 4 sick days in each calendar year (deducted from your holiday) and if you have children, you are also entitled to 2 additional childcare days.
Termination of Employment
This can happen too, and each of us should know what to do in that moment and what our rights and obligations are. Unlike an employer, an employee can terminate his or her employment at any time, but it is important that he or she gives proper notice and complies with the notice period. This depends on the length of the employment relationship and the type of employment contract. Most companies will first employ you on a trial basis. If the probationary period is no longer than 2 weeks, the notice period is 3 working days. If the contract is for more than two weeks, you will have to wait a week, and if the contract is for 3 months, you will have to attend work for another 2 weeks.
If everything goes smoothly and both parties are satisfied, there is usually an extension of the employment contract. This can be for a fixed or indefinite period. Remember that you can only get a fixed-term contract 3 times and then it must be either terminated or extended indefinitely. The length of the notice period in this case is based on the duration of the employment relationship.
Working for less than 6 months? Count on the fact that your employer can hold you for 2 weeks after you give notice. This period is extended to 1 month if you work for more than half a year and to 3 months if the length of employment exceeds 3 years.
Employment Contracts in Poland: Contract for the Performance of Work (Umowa zlecenie)
Employers often use this type of contract as a substitute for an employment contract because it is cheaper. However, if the content of the contract implies the necessity to personally carry out the activity, at a place and time specified by the employer, it is not an agreement from a legal point of view, but an employment contract. The employer can be fined up to PLN 30,000 for doing so.
Contract for the Performance of Work and Advances
If you choose to work on the basis of a contract of employment, you must expect to pay income tax, health, social security and pension contributions, just as you would if you had an employment contract. Students under 26 do not pay these deposits or taxes. Optionally, you can also pay sickness insurance, which entitles you to sickness benefit. On the positive side, the activity carried out under this contract is included in the years of service and therefore has an impact on the amount of the pension. However, this only applies if you are not simultaneously carrying out other activities that pay social security contributions (for example, work under an employment contract).
When is this form of cooperation worthwhile?
It is very often used by students. The Umowa zlecenie is very flexible and the fact that the work can be done at any time and in any place plays into their hands. However, students are not the only target group. An Umowa zlecenie will also find use among persons for whom an employment contract is too restrictive. In this group we can include freelancers offering services such as translation, copywriting, graphic design and all sorts of activities where it is not necessary to be physically at the employer’s office.
Employment Contracts in Poland: Contract for Works (Umowa o dzieło)
Unlike an umowy zlecenie, which is about the implementation of an activity, the main objective of a umowy o dzieło is its final effect. The party executing the order under this contract shall have overall responsibility for the accuracy and functionality of the resulting product/work. If you work under this type of contract, you will not be entitled to pension, social security or health insurance.
This can be advantageous if you are working under a contract of employment and you are doing it for a living. Another advantage is higher tax deductible costs. The basic rate is 20% and rises to 50% if the contract is a copyright assignment contract. In practice, this means that you only pay 18% of half of the total remuneration for the activity set out in the contract.
Trade (Działalność gospodarcza)
This is also an opportunity to earn money in Poland. Administratively, it is one of the most demanding forms of cooperation. It is necessary to keep accounts, file control reports, pay all taxes and insurance advances. As a freelancer, in most cases you can make do with what the aforementioned civil contracts offer. On the other hand, after a certain period of time there may be a need to issue invoices or employ additional staff. In that case, a trade is the easiest option and it is also the right step towards developing your own business.
Which contract/form of cooperation is best for me?
If you are a newcomer who is just starting to look around the Polish labor market, you should definitely look for job offers with a contract. You get a certain comfort and security that the other options do not offer. Definitely avoid employers offering different combinations of these contracts. Most of the time it is a way to save money.
However, it is not you who will save, but your employer. This will have a rather negative effect on you in the form of lower insurance contributions and lower incapacity benefit. In short, if you are not one hundred percent sure about what you are doing, choose a contract if possible. It’s a safe bet.
No matter what type of contract you end up signing, once you’ve successfully completed your interview and arrived in Poland, you’ll have our Community Manager on hand to help you during your first days and weeks in your new country. Whether it’s help with arranging a bank account, information about important offices or advice on how and where to find suitable accommodation, you’ll have a contact person to turn to from day one.