The End of Hiding Employment Relationships on Paper

Only a few weeks have passed since the landmark amendment to the Act on the National Labour Inspectorate came into force, granting inspectors unprecedented powers. Since 8 July 2026, the National Labour Inspectorate (PIP) has been able to issue orders and, ultimately, administrative decisions requiring the ex officio reclassification of a civil law contract into an employment contract. Although the market feared a wave of such decisions, the first data point to a different and much more important trend: the regulations are working primarily as a preventive measure. Businesses are extensively reviewing their cooperation models because verifying the correctness of contracts is no longer limited solely to analysing what is written on paper. How is the new legal reality affecting the day-to-day operations of Polish businesses and their relationships with HR agencies?

Organisational reality under inspectors’ scrutiny

The July changes to the law did not introduce a new definition of the employment relationship – the relevant criteria are still set out in Article 22 of the Labour Code. What has changed, however, are the verification tools and the scale of risk faced by businesses that circumvent the regulations. In addition to the power to issue decisions confirming the existence of an employment relationship, the inspectorate has gained broader access to system data, new analytical tools, and the authority to carry out many inspection activities remotely. Moreover, sanctions for violations of employee rights have been significantly tightened, raising the maximum fine that companies may face to as much as PLN 60,000.

– The change that came into force on 8 July 2026 does not introduce new criteria for distinguishing an employment contract from a civil law contract. What has fundamentally changed, however, is the risk associated with choosing the wrong form of employment and the effectiveness of the National Labour Inspectorate’s enforcement activities – explains Artur Kornatowski, Director of the Legal and Administrative Department at Smart Solutions HR. – For businesses, this means above all that greater attention must be paid not to the wording of the contract itself, but to how the work is actually organised. A well-drafted contract of mandate will not protect a company if, in practice, the contractor works regularly at specified hours, at a location designated by the company, under the ongoing supervision of a manager, and without genuine freedom as to how the assigned tasks are performed.

Prevention instead of penalties: the market is correcting itself

The effectiveness of the amendment is currently measured not by the number of fines imposed, but by the immediate change in market behaviour. According to data published by the National Labour Inspectorate in mid-August 2026, as many as 690 complaints and applications concerning the concealment of employment relationships under civil law arrangements had been submitted since the new regulations came into force. Since the beginning of the year, a total of 1,794 such cases have been recorded – almost three times as many as in the corresponding period of the previous year (619 complaints).

Already in the first month after the amended rules came into force, more than 100 inspections were initiated, 35 of which had been completed, resulting in 121 written orders to confirm employment under an employment contract. Significantly, as of 18 August, no proceedings had yet resulted in the issuance of a final administrative decision. The clearest evidence of the effectiveness of the regulations is the number of voluntary corrections. Inspectors recorded as many as 201 cases in which companies independently converted contracts into employment contracts before the authorities had completed their detailed inspection findings.

A similar warning signal comes from the first individual interpretations issued by the Chief Labour Inspector under the amended legal framework. Of the seven applications reviewed by mid-August, the authority accepted the companies’ arguments regarding the civil law nature of the cooperation in only two cases. In the remaining five, it concluded that the model described met the criteria of an employment relationship.

The business response, focused on voluntarily correcting irregularities, is closely linked to the introduced 12-month amnesty period. Businesses that voluntarily reclassify improper contracts by 8 July 2027 will avoid severe financial sanctions. The amnesty encourages organisations to conduct immediate audits, making the legal risk financially unjustifiable.

Complex responsibility in the employment triangle

The Act has created an entirely new level of interpretative difficulty in the temporary employment sector. Although the regulations still allow agencies to assign individuals performing duties under contracts of mandate, the specific nature of such cooperation now operates on an exceptionally fine legal line. By its very nature, it is the user employer that assigns tasks and supervises their performance. Under the new legal regime, it is precisely these actual processes, rather than the headings of the documents themselves, that are subject to inspection.

– In the case of temporary work, responsibility cannot be reduced solely to the question of who formally signed the contract with the person performing the tasks – notes Artur Kornatowski. – The agency is primarily responsible for the administrative side of employment, legalisation in the case of foreign nationals, preparing and concluding the contract, and obligations related to calculating and paying remuneration. The user employer, on the other hand, is responsible for the actual assignment of tasks, which it organises itself — in particular, setting schedules, exercising supervision, and issuing instructions. The division of responsibilities between the user employer and the agency means that it cannot be assumed that the agency bears sole responsibility for any potential reclassification of a civil law contract into an employment contract.

A holistic audit as a response to growing risk

This creates a clear risk of shifting blame between the parties. Safeguards included in commercial agreements between an agency and a client, under which one party declares that it assumes the full risk, are not binding on the National Labour Inspectorate. For the authority, what matters exclusively is the objective course of the employment process on site.

Growing awareness of the inevitability of verification mechanisms is transforming market strategies for managing external personnel. Questions addressed to HR experts are becoming highly operational: can a contractor work on the same shift side by side with an employee? How should a team leader monitor the quality of work without creating a relationship of subordination characteristic of an employment relationship under the Labour Code?

– Companies are therefore beginning to change their approach. Increasingly, they are not limiting audits to reviewing the contracts themselves, but are analysing the entire process of task performance: instructions for managers and team leaders, the way attendance is planned, the system for reporting working hours, substitution rules, the way instructions are issued, communication with contractors, and the division of responsibilities between the agency and the user employer – concludes Artur Kornatowski. – And this, in my opinion, is the most important consequence of the reform.

The reform marks a radical turning point for the Polish business environment. The elimination of risky employment arrangements has already begun and is driven by the chilling effect of the modernised state enforcement framework. Given the prospect of fines of up to PLN 60,000, businesses and HR agencies have one year to fully adapt their day-to-day operational practices before the protective shield of the amnesty transition period ultimately expires.