Employer of Record (EOR) in Poland: When It Makes Sense and Key Legal Risks

An Employer of Record (EOR) in Poland is a third-party company that formally employs a worker in Poland while that worker performs services for a foreign business. In practice, the EOR signs the employment contract, runs payroll, pays social security contributions and handles statutory HR obligations, while the foreign business coordinates the commercial work.

This is informational material, not legal advice. The legal assessment of an EOR model in Poland depends on the factual situation, including who manages the employee, where decisions are made, how costs are recharged and what role the Polish-based worker performs.

Lawyersinpoland.com by Kopeć & Zaborowski advises international businesses on employment, corporate, tax-sensitive structuring, compliance and litigation risks connected with operating in Poland.

Employer of record Poland – why the model is used

The EOR model is usually considered by foreign companies that want to test the Polish market, hire a specialist quickly or avoid immediate incorporation of a Polish subsidiary. It may reduce administrative friction at the beginning of operations, especially where there is no local HR, payroll or legal infrastructure.

However, Polish law does not contain one simple, separate statutory regime called “EOR”. The structure must be assessed through existing rules, especially Polish employment law, temporary work regulations, tax rules, social security obligations and data protection law.

Under Article 22 of the Polish Labour Code, employment exists where work is performed for remuneration, under the direction of an employer, at a place and time designated by the employer [1]. This rule is central. If the foreign company exercises day-to-day managerial authority, the formal EOR arrangement may be challenged as inconsistent with the actual employment relationship.

When to use EOR Poland – three common use cases

An EOR should not be treated as a universal alternative to establishing a Polish company. It is most defensible in limited situations. The three practical use cases are:

• Use case 1 – short-term market testing: the foreign business needs to verify whether Poland is commercially viable before committing to a subsidiary, office lease, accounting function and full local management.
• Use case 2 – transitional hiring before incorporation: the company has already decided to enter Poland, but needs temporary employment coverage until a Polish company is registered, bank accounts are active and payroll systems are operational.
• Use case 3 – isolated specialist engagement: the Polish-based employee supports a foreign team without creating a local operating unit, negotiating contracts, managing sales infrastructure or representing the company as a permanent local presence.

Outside these use cases, the EOR model may become difficult to defend. If the company builds a stable Polish team, appoints local managers, serves Polish clients or conducts core revenue-generating activity from Poland, an own company is usually a safer long-term structure.

EOR Poland legal risks under Polish labor law

The main labor law risk is misalignment between the contract and reality. A contract may state that the EOR is the employer, but Polish authorities or courts may look at who actually gives instructions, approves leave, evaluates performance, imposes discipline and controls working time.

Employment contracts in Poland must include mandatory elements, including the parties, the employer’s registered office or residence address, type of contract, date of conclusion, type and place of work, remuneration, working time dimension and start date, as required under Article 29 of the Labour Code [1]. Employers also have statutory duties regarding working time, health and safety, anti-discrimination, documentation and timely payment of salary.

If the structure resembles employee leasing, the Act on Employment of Temporary Workers may become relevant [2]. Temporary agency work in Poland is regulated and subject to limitations, including rules on the maximum period of assignment and equal treatment. As a rule, a temporary employee may be assigned to one user employer for no longer than 18 months within 36 consecutive months, subject to statutory exceptions. An EOR arrangement that functions like temporary work without the required registration or is improperly structured may create regulatory exposure.

Hiring employees in Poland without an entity – payroll, tax and ZUS

Hiring employees in Poland without an entity does not remove Polish payroll and social security obligations. Where work is performed in Poland, social insurance contributions will usually be relevant under the Act on the Social Insurance System, subject in particular to EU social security coordination rules and applicable international rules [3]. Personal income tax withholding may also arise under the Polish Personal Income Tax Act, depending on residence, place of work and payer status [4].

An EOR typically manages payroll administration. This may be practical, but it does not automatically eliminate tax risk for the foreign client. The commercial agreement should clearly allocate responsibility for payroll data, reimbursements, benefits, working time records, tax filings and employee claims.

EOR permanent establishment risk Poland

One of the most serious issues is EOR permanent establishment risk Poland. A permanent establishment may arise where a foreign enterprise has a fixed place of business in Poland or operates through a dependent agent, subject to the relevant double tax treaty and Article 4a point 11 of the Polish Corporate Income Tax Act [5].

The risk increases where the Polish-based person habitually concludes contracts, negotiates essential contract terms, represents the foreign company before clients, manages a local sales pipeline or performs core business functions. The label “EOR” is not decisive. Tax authorities may examine the actual business substance.

For this reason, EOR use should be reviewed together with tax advisors before hiring sales directors, country managers, procurement leads or employees with authority to bind the foreign company. The same applies where several employees are hired in Poland and operate as a local team.

Employer of record vs own company Poland

The comparison between employer of record vs own company Poland is mainly a comparison between speed and control.

• EOR: faster start, less administration, useful for short-term or limited hiring, but higher uncertainty if the foreign company controls the employee directly.
• Own company: longer setup, accounting and corporate duties, but clearer employer status, stronger compliance position and better structure for scale.

A Polish limited liability company, commonly a spółka z ograniczoną odpowiedzialnością, is often selected for long-term operations because it creates a local legal platform for employment, contracts, VAT registration, management and corporate governance. It also helps separate employment risk from informal or hybrid arrangements.

EOR compliance Polish labor law – issues to check before signing

Before using an EOR, the agreement should be reviewed from a legal and operational perspective. Key points include:

• who is the formal employer and who performs employer obligations under the Labour Code;
• whether the model may fall under temporary agency work rules;
• who controls working time, holidays, overtime and remote work arrangements;
• who bears liability for employee claims, accidents at work and termination disputes;
• whether employee data processing complies with the GDPR [6];
• whether the employee’s duties may create permanent establishment risk;
• whether restrictive covenants, confidentiality and IP transfer clauses are enforceable under Polish law.

Confidentiality and intellectual property require particular attention. Polish employment law, copyright rules and industrial property rules do not always transfer rights in the way foreign templates assume. Contract wording should be adapted to Polish law and to the employee’s actual role.

Practical conclusion for foreign companies

An EOR in Poland can be useful, but mainly as a temporary or narrow tool. It is not a risk-free substitute for proper market entry planning. The more the Polish employee becomes integrated into the foreign company’s core operations, the stronger the case for establishing a Polish entity and implementing standard employment, compliance and tax governance.

For a case-specific assessment of EOR use, employment structure and Polish market entry risk, contact the law firm.

FAQ – Employer of Record (EOR) in Poland

Is an Employer of Record legal in Poland?

An EOR structure may be used in Poland, but there is no single statutory EOR regime. The model must comply with Polish employment law, tax rules, social security law and, where relevant, temporary agency work regulations.

Can a foreign company hire employees in Poland without an entity?

Yes, in some situations, but this requires careful handling of payroll, social security, tax withholding and employment law obligations. The arrangement may also create permanent establishment risk depending on the employee’s role.

What is the main EOR Poland legal risk?

The main risk is that the formal structure does not match reality. If the foreign company directly manages the employee, Polish authorities or courts may examine whether the EOR is only a formal employer.

Does using an EOR remove permanent establishment risk in Poland?

No. An EOR does not automatically remove permanent establishment risk. The risk depends on the actual activities performed in Poland, especially authority to negotiate or conclude contracts and the existence of a stable business presence.

When is an own company better than an EOR in Poland?

An own company is usually better where the business plans long-term hiring, local management, Polish clients, sales activity or a larger team. It provides a clearer legal and operational structure.

Can an EOR terminate an employee in Poland easily?

Termination must comply with Polish Labour Code requirements, including notice periods and, in the case of indefinite-term and fixed-term contracts, justification for termination by notice. Consultation duties may also apply where the employee is represented by a trade union. The factual reason for termination should be documented.

Bibliography

1. Act of 26 June 1974 – Labour Code, including Articles 22, 29, 94 and 281, as amended.
2. Act of 9 July 2003 on the Employment of Temporary Workers, as amended.
3. Act of 13 October 1998 on the Social Insurance System, as amended.
4. Act of 26 July 1991 on Personal Income Tax, as amended.
5. Act of 15 February 1992 on Corporate Income Tax, including Article 4a point 11, as amended.
6. Regulation (EU) 2016/679 of the European Parliament and of the Council – General Data Protection Regulation.