Employment in Poland: A Guide for Foreign Investors

Poland’s labor market is governed by a well-established legal framework that ensures a balance between the rights of employees and the obligations of employers. The primary source of labor law is the Polish Labor Code, which outlines employment standards, working conditions, and employee protections. However, other forms of work arrangements—such as civil law contracts—are also widely used and regulated separately.

Legal Forms of Employment

The Labor Code applies exclusively to employment relationships based on employment contracts. These contracts come in several forms:

• Permanent contracts (for an indefinite period),
• Fixed-term contracts (limited to 33 months and a maximum of three contracts),
• Trial period contracts (up to 3 months).

In addition to employment contracts, it is common in Poland to engage workers under civil law contracts, such as:

• Contract of mandate,
• Specific-task contract,
• Self-employment (B2B contracts).

These civil contracts are governed by the Civil Code and are not subject to the Labor Code. However, they must not be used to disguise an actual employment relationship, which would be illegal.

Oversight and Compliance

The National Labor Inspectorate is the authority responsible for monitoring compliance with labor laws, particularly in areas such as occupational safety, health regulations, and the legality of employment.

Working Time and Overtime

The standard working time in Poland is 8 hours per day and 40 hours per week, based on a five-day workweek. Alternative working time systems are allowed if justified by the nature of the work. For example, under a balanced working time system, daily hours may be extended to 12, provided they are offset by shorter days or time off.

Employees working overtime are entitled to additional compensation:

• 100% bonus for overtime on Sundays, holidays, or at night,
• 50% bonus for overtime on regular working days.

Alternatively, employers may offer time off in lieu of overtime pay.

Wages and Benefits

Poland has a statutory minimum wage, which is updated annually. For example:

• In 2021: 2,800 PLN gross/month,
• In 2022: 3,010 PLN gross/month.

For civil law contracts, a minimum hourly rate also applies.

Employers with at least 50 employees are generally required to establish a Social Benefits Fund, which supports employee welfare. However, under certain conditions, employers may opt out of this obligation.

Leave Entitlements

Employees are entitled to 20 or 26 days of paid annual leave, depending on their total years of service and education. Sick leave is compensated at 80% of salary, with the employer covering the first 33 days (or 14 days for employees aged 50+), after which the Social Insurance Institution (ZUS) takes over.

Parental Rights and Protections

Polish labor law offers extensive protections for parents:

• Pregnant employees are protected from dismissal and cannot be assigned to night shifts or overtime.
• Maternity and parental leave totals up to 61 weeks, with 41 weeks of parental leave shareable between both parents on the conditions described in employment law.
• Upbringing leave of up to 36 months is available until the child turns six, during which the employee is generally protected from dismissal.

Termination of Employment

There are four main ways to terminate an employment contract:

1. With notice (requires justification for indefinite contracts),
2. Without notice due to employee fault (e.g., serious misconduct),
3. Without notice through no fault of the employee (e.g., long-term illness),
4. By mutual agreement.

Notice periods vary based on tenure: 2 weeks, 1 month, or 3 months. Employees may appeal dismissals in labor court, seeking compensation or reinstatement if the termination was unjustified.

In cases of redundancy at companies with 20+ employees, severance pay of 1 to 3 months’ salary is required.

Retirement and Pension Contributions

The retirement age in Poland is 60 for women and 65 for men. Employers and employees both contribute to the Social Insurance Institution (ZUS) for retirement benefits. Additionally, employers must offer an Employee Capital Plan (PPK)—a voluntary long-term savings scheme co-financed by the employer (minimum 1.5% of salary), the employee, and the state.