Labour market and the status of Ukrainians in Poland in question

President Karol Nawrocki’s decision to veto the amendment to the special law on aid for Ukrainian citizens has sparked a heated debate about the stability of the Polish labour market and the future of hundreds of thousands of workers from beyond the eastern border. In the background are disputes over benefits, access to healthcare, and economic consequences that could contribute to the growth of the grey economy and weaken the dynamics of Poland’s GDP.

Presidential Veto – what is it about and what was the reason?

President Karol Nawrocki vetoed the amendment to the special law on aid for Ukrainian citizens, which was intended to extend their right to stay, work, and access social benefits until March 4, 2026. The objections concerned, among others, the lack of a provision that the 800+ benefit should be granted only to those working and paying taxes in Poland, as well as the privileged access to public healthcare. It is important to note, however, that the legal stay of Ukrainian citizens has been secured by the EU Council’s decision to extend temporary protection until March 4, 2027, which guarantees persons with “UKR” status the right to reside and work. The uncertainty, however, concerns those who are only using extended visas, residence permits, or visa-free travel.

The president proposed changes that include making the 800+ benefit conditional on taking up employment in Poland, limiting access to public healthcare for non-working individuals, and significantly extending the required period of stay to obtain citizenship – from three to ten years. The proposal also includes the introduction of criminal sanctions: up to five years of imprisonment for illegal border crossing and up to three years for promoting Banderist ideology and the activities of the OUN-UPA.

Legal consequences – a complicated situation for Ukrainian workers

If the amendment to the special law is not passed, the basis for the legality of stay for Ukrainian citizens with “UKR” status will be Article 106 of the Act of 12 December 2013 on Foreigners, in connection with relevant EU regulations. It ensures access to the labour market without the need to obtain a work permit or submit a notification to the labour office, which means that in some aspects, the situation of this group may remain stable or even become more flexible. However, Ukrainian citizens currently relying on the automatic extension of national visas and residence permits may face difficulties – if the special law is not extended, they risk losing their legal stay. In such cases, it is recommended to apply for a temporary residence permit before 30 September this year. Nonetheless, under Article 22 of the current special law, employment of Ukrainian citizens through the work assignment notification procedure remains valid – notifications submitted to district labour offices retain their validity regardless of future changes in the regulations.

“It is crucial that individuals whose stay is based solely on extended national documents – visas or residence cards – react in time and secure their status by submitting a temporary residence permit application. Otherwise, their stay will be considered illegal, even if they continue to work and pay taxes,” emphasises Tetiana Hrynchyshyn, a specialist in the legalisation of foreigners’ stay.

How will the labour market react?

Halting work on the amendment to the special law has significant consequences for the Polish labour market. According to the latest data from the Social Insurance Institution (ZUS), in July 2025, nearly 825,000 Ukrainian citizens were covered by social insurance. They represent around 5% of all insured individuals in ZUS and more than two-thirds of all legally employed foreigners. Meanwhile, a study conducted by the Polish Economic Institute in May 2025 showed that one in three companies in Poland currently employs Ukrainian workers, and their departure is seen as a real threat to business continuity.

“The scale of Ukrainians’ presence in the Polish labour system is unprecedented. Their participation not only eases labour shortages but, in many sectors, is essential for the daily functioning of businesses. Regulatory changes threaten not only to reduce labour supply, but also to increase the grey economy, destabilise local labour markets, and disrupt integration processes,” says Natalia Myskova, Managing Director of Smart Solutions HR.

The veto of the amendment to the special law did not bring immediate effects but increased uncertainty among businesses.
Companies employing manual workers – in logistics, agriculture, or processing – must now factor in the risk of employment disruptions after 30 September 2025. This situation leads to greater caution in HR decision-making, may slow down new recruitment, and limit companies’ ability to respond flexibly during peak demand periods. Even the mere prospect of unstable regulations increases the cost of business planning and adds pressure to the labour market.

In the long term, the stakes involve not only current employment continuity but also the pace of economic growth.
A reduction in the workforce would mean higher recruitment costs, the need for more intensive training, and reduced efficiency in sectors heavily dependent on migrant labour. According to the study “The Impact of Ukrainian Refugees on the Polish Economy” conducted by Deloitte for UNHCR, the contribution of Ukrainian refugees to Poland’s GDP in 2024 amounted to 2.7%, illustrating their real significance to the economy. The lack of predictable legal frameworks may eventually weaken economic growth and encourage workers to relocate to other EU countries.

“Right now, the biggest issue isn’t a lack of people willing to work – it’s the uncertainty about whether those already working will be able to continue after a specific date. For companies, this is a situation where no rational decision can be made — it’s unclear whether to invest in new orders, continue hiring, or wait it out. Uncertainty has a cost, and the market is starting to factor it in. Employers are not panicking, but they are beginning to assess risks that were previously marginal,” says Natalia Myskova.

Life uncertainty and the rise of the grey economy

Uncertainty about continued residence and access to legal employment makes it difficult for people to make basic life decisions. In the absence of lasting solutions, there is also a growing risk that some employment will move outside the formal labour market.

“When clear regulations are missing, a natural mechanism is to look for temporary solutions — also outside the formal system. For many companies, maintaining operational continuity remains a priority, and for workers — securing an income. In such cases, the growth of informal employment isn’t driven by an intent to break the law, but by the attempt to maintain the current status quo in the absence of legal frameworks to support it. Unfortunately, this creates a direct path to the expansion of the grey economy,” concludes Natalia Myskova.

What’s next for the amendment to the special law?

The president’s decision sparked considerable controversy and prompted expert debates about the state of the Polish labour market. Karol Nawrocki announced that he would submit his own draft amendment to the law, which in his view would be a comprehensive document reflecting the current economic and international realities. The government, in turn, has declared its intention to prepare a separate law and undertake actions to clarify the legal status of Ukrainian citizens in Poland. The current situation remains dynamic and points to the need to develop legislative solutions that, on the one hand, safeguard the interests of both workers and employers, and on the other, ensure systemic stability in the years ahead.

Sources:

• Tygodnik Gospodarczy PIE, 15.05.2025 – own elaboration by Smart Solutions HR

• “Analysis of the Impact of Ukrainian Refugees on the Polish Economy” conducted by Deloitte for UNHCR – own elaboration by Smart Solutions HR

• Data from the Social Insurance Institution (ZUS): Number of insured individuals (natural persons) who declared non-Polish citizenship in their pension and disability insurance applications between January and July 2025 – own elaboration by Smart Solutions HR