If your company is currently operating or planning to operate in Poland, or you are an employed professional or entrepreneur with clients or business partners within the country, you should be aware of the significant changes to the Polish labor law coming into effect in 2023.
The new policies will be introduced in response to the fast-paced inflation and the post-pandemic state of the Polish labor market, adapting it to hybrid and remote working models. Furthermore, the new labor law will bring about opportunities for domestic companies to hire remote talent from overseas. The changes will facilitate workplace flexibility and ensure that Poland keeps up with the competition in the global market.
Changes to Polish labor law in 2023 in a Nutshell: What to Expect?
The expected updates in labor law will encompass the following aspects of professional relationships:
- new statutory regulations for hybrid and remote working
- new termination rules for open-ended and fixed-term employment contracts
- increase in minimum wage, employee benefits, and business-related allowances
- a simplified and digitalized procedure of hiring international employees, including relocation and immigration
On top of that, changes will be introduced in regard to social security contributions, mandatory pension plans, transparency of working conditions and collective bargaining. Let us take a closer look at the key new policies in Polish labor law in 2023 and define what is there for businesses and workers to anticipate.
New Legislation for Hybrid and Remote Work
Embracing the post-pandemic surge in hybrid and remote employment, Poland introduces statutory regulations for remote work. Companies with partly or fully remote working policies should adjust their job agreements and workplace standards accordingly. This may include methods to monitor attendance and performance, reimbursement of costs related to home office, installation and maintenance of digital tools and equipment for remote workers, data security, and more.
Employers with remote teams will need to ensure the management of previously acquired as well as newly relocated remote personnel is in compliance with the new regulations. Relocation services and other forms of assistance provided by Acvian reduce the administrative burden, thus allowing our clients to focus on more strategic aspects of operations. A comprehensive guide to remote employment in Poland can be found on our website.
Impact on Employment Contracts
The 2023 labor legislation will unify the rules for terminating fixed-term and open-ended employment contracts. Namely, employers will no longer be able to terminate fixed-term contracts without stating the reason and involving the union. If the reason is considered unlawful by the employee, the new regulations will allow for reinstatement. Thus, companies are to revise current practices for terminating employment contracts.
Change in Minimum Wage and Work-Related Allowances
In 2023, an increase in the minimum wage will occur in Poland not once but twice due to high inflation. The minimum wage rate is PLN 3,490 (PLN 3,010 in 2022) as of 1 January 2023 and will be further raised to PLN 3,600 by 1 July 2023. Consequently, there is an increase in certain employee benefits with the value linked to the minimum wage, such as nighttime allowance, illness- and maternity-related social security compensation, and statutory lay-off pay. The change also concerns the minimum hourly rate going up to PLN 22.80 from 1 January 2023 and further to PLN 23.50 from 1 July 2023.
Travel allowances related to business and employed work will increase, too. Namely, employees will receive a lump sum of PLN 9 to cover commutes by public transport and a lump sum of PLN 67.50 per night on business trips in case no free accommodation is provided. The daily allowance for domestic business trips goes up to PLN 45. Those employees who use private vehicles for business purposes are now reimbursed PLN 0.89 per kilometer for a passenger vehicle with an engine capacity of less than 900 cm3 and PLN 1.15 in case the engine capacity exceeds 900 cm3.
Current updates indicate that Polish labor law legislation is taking a progressive stance to provide employees with more social benefits, generous leave entitlements, improved working conditions and protection of rights.
Changes in the Process of Hiring Foreigners and the Relocation Procedure
The good news for companies in Poland hiring foreign talents is that the updated legislation greatly simplifies the process. Procedures related to immigration will be modernized and digitalized. The labor market test is eliminated, and an electronic system is introduced to submit and review applications for a work permit. The procedures of issuing or rejecting the permit and filing an appeal will also be done electronically.
According to the new regulations, a work permit cannot be issued to foreigners if their employment type is less than quarter-time (10 hours per week). If a foreign employees working hours increase with a proportionate increase in compensation, there is no need to modify the existing permit or apply for a new one. The existing employment contract will terminate if a foreign national loses the right to be legally employed in Poland.
The new digitalized procedure must also be considered by companies planning to relocate their personnel to Poland in 2023. If you are a representative of a business operating in Poland and are in need of immigration support, connect to us via this online contact form: https://acvian.com/contact-us/.
What Challenges Are in Store for Employers with the Newest Polish Labor Law?
The 2023 updates to the Polish labor legislation, along with increased social security contributions and leave benefits, create a demand for employers to optimize their labor costs and adjust policies to accommodate the changes. New legal obligations are introduced to avoid workplace discrimination and ensure on-site and remote employees have more flexibility regarding working hours and various forms of leave. This leaves decision-makers monitoring the Polish labor market with a lot to process. Luckily, Acvian is here to offer a range of solutions. Our Employer of Record service takes the burden off your HRs shoulders and ensures your experience with international employment is smooth and stress-free.