The reform of the National Labour Inspectorate may have the strongest impact on foreign workers
According to current assumptions, on 1 January 2026 an amendment to the Act on the National Labour Inspectorate (PIP) is expected to enter into force, which may significantly shake the labour market in Poland.
The reform may change the situation of many people currently employed under contracts of mandate or B2B arrangements, expose contracting entities to serious financial consequences, and result in potential increases in the costs of goods and services for the economy. However, foreign workers may feel the changes most acutely, as on the basis of an inspector’s decision they may lose the right to work legally in Poland. An expert from the recruitment company Smart Solutions HR points out that effective risk mitigation requires both preventive measures on the part of employers and additional systemic actions by the state.
A binding decision belongs to the court, and proceedings usually take years
Even now, the National Labour Inspectorate has the authority to challenge a contract of mandate or a B2B contract and indicate that the cooperation should take the form of an employment contract, or to refer the case to a labour court. However, this is only a recommendation – a binding decision belongs to the court, and proceedings usually take years.
After the amendment, this situation will change significantly – a labour inspector will be able to issue an administrative decision that by operation of law will transform a civil law contract into an employment contract, also retroactively (up to a maximum of three years). The contracting entity will be able to appeal to the Chief Labour Inspector and then to a labour court; however, from the moment the decision is served until the case is resolved, the employer will have to treat the person as a full-time employee – provide occupational medical examinations, health and safety training, leave, pay night shift and overtime allowances, and fully apply the Labour Code. Until now, it was the labour inspector who had to provide evidence that a contract of mandate should in fact be an employment contract; after the change, the roles will be reversed – the company will have to prove that the inspector’s decision is incorrect. Importantly, the argument that both parties “want a contract of mandate” will not be sufficient.
Effects of the reform: who may benefit and who may lose?
The amendment to the Act may entail consequences for both employers and employees. While many individuals may face a change in their legal status, employers must primarily take into account financial consequences that may affect the entire labour market and the Polish economy.
– Such a far-reaching role of the inspector in determining the existence of an employment relationship is a novelty in the Polish legal system and may significantly change the rules of the game – says Artur Kornatowski, Legal & Administrative Manager at Smart Solutions HR. – From the employer’s perspective, the effects may be quite complex. The reform will primarily affect sectors that for years have built quasi-employment models based on contracts of mandate or B2B arrangements, including IT, logistics, construction, retail, and security services. The risk associated with the possibility of transforming a contract of mandate into an employment contract may lead to a much more limited use of this type of civil law contracts. A greater share of employment contracts may result in higher labour costs, which in turn will lead to increases in the prices of services and goods, potentially fuelling inflation again. Higher labour costs may also mean the need to reduce the number of collaborators or increase pressure toward automation – explains Artur Kornatowski.
On the other hand, for many workers the change may mean an improvement in their individual situation. Transitioning to an employment contract involves full protection under labour law, social security coverage, the right to leave, sickness benefits, and parental benefits. Moreover, if the National Labour Inspectorate determines that an employment relationship existed earlier, these individuals may receive compensation for past years, such as equivalents for unused leave or additional payments for overtime that had not previously been settled. Although for some people a transition to an employment contract may mean lower net pay, this is accompanied by a significant increase in legal and financial protection, which in many cases will constitute a real strengthening of their professional situation.
Foreign workers in the highest-risk group
Unfortunately, not every group of employees can expect a clear improvement in their situation. The reform may be felt most acutely by foreign workers employed in Poland and the companies that hire them. Foreign nationals are often employed in Poland under contracts of mandate or B2B arrangements – mainly due to the flexibility of these forms and existing market practices. At the same time, their right to work and reside is strictly linked to the conditions specified in a work permit, declaration, or residence decision, including the type of contract with the employer or contracting entity.
– For a Polish national, a PIP decision is mainly a change in the insurance title. For a foreigner, it can be a matter of “to be or not to be” in Poland. If a PIP inspector determines that a foreigner’s contract of mandate should be an employment contract and issues a decision to transform it, an immediate inconsistency arises: the document legalising work refers to a contract of mandate, while in reality an employment contract is already in force. This means that further performance of work becomes illegal – until a new permit is obtained. If the employer fails to complete the formalities in time, the foreign worker loses the possibility of legal employment – explains Artur Kornatowski.
The risk is particularly high in the case of standard work permits and declarations, where a change in the type of contract requires obtaining a new document. During the period needed to obtain it, the employee should refrain from performing their duties, which for them means a lack of income, means of subsistence, and anxiety about the future, and for the company – downtime, staffing gaps, and real financial losses.
In extreme cases, a foreign worker may decide to leave Poland
– The problem is that the legislator has not provided for a special, accelerated path for situations in which a state authority changes the form of employment overnight. For companies that employ foreign workers intensively, this constitutes a real risk of operational paralysis, compounded by long waiting times for work authorisation documents and often prolonged administrative procedures. In extreme cases, a foreign worker may decide to leave Poland in search of employment elsewhere. This shows that although the intention of the reform is to improve working conditions, in certain segments it requires additional protective measures so as not to temporarily worsen the situation of those concerned – says Artur Kornatowski.
Prevention above all: how to prepare for the changes
An expert from Smart Solutions HR emphasizes that waiting for the first PIP inspection is the worst possible strategy – employers, especially those hiring foreign workers, should start taking action now.
The first step should be an audit of all civil law contracts and B2B agreements – particularly those concluded with foreign nationals – in terms of the risk of being challenged by the PIP. At the same time, it is worth verifying documents legalising work – permits, declarations, and notifications – by checking what type of contract is indicated in them and whether it corresponds to the actual conditions of cooperation. Another element is preparing a “day zero” plan in the event of an inspector’s decision: ready-made templates of employment contracts, procedures for quickly reporting changes to ZUS, and a path for the immediate submission of new applications for work permits. Close cooperation between HR departments and those responsible for residence legalisation is also essential, as well as consistent and clear communication with foreign workers – so that they understand possible scenarios, do not lose trust in the employer, and feel that the company actively cares about the security of their employment.
– The PIP reform carries great potential to bring order to the labour market, but at the same time requires companies to exercise great caution and proper preparation. Whether the changes bring benefits to employees and stability to employers depends on how quickly businesses adapt their processes and whether the state fills legislative gaps, especially in the area of employing foreign workers. Companies that already take preventive measures today can enter the new year with much greater confidence and resilience to potential risks. The reform may be a challenge, but with the right approach it can also be an opportunity for a more transparent and balanced labour market – emphasizes Artur Kornatowski.
