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23 October 2019
Changes to Labour Code
Enforcement of 'irreplaceable acts'
Remuneration of vocational training and apprenticeships
Internship allowance excluded from minimum wage
Minimum wage increased
Limit on retirement and disability insurance contributions abolished
Confusion over social security rates
Changes to social benefit fund contributions
Changes to Social Insurance Institution applications
A number of significant changes to Polish labour law have been announced in recent months. This article examines these amendments in detail.
The Act of 16 May 2019 amending the Labour Code and other acts came into force on 7 September 2019.
The changes introduced concern:
Article 1050 of the Code of Civil Procedure regarding the enforcement of so-called 'irreplaceable acts' was amended on 7 September 2019. 'Irreplaceable acts' are defined as acts which cannot be performed by another person on behalf of the debtor (eg, an employer). In the field of labour law, such acts include drawing up and the issuance of work certificates.
At present, courts with territorial jurisdiction where an act was to be performed are the competent courts for the enforcement of irreplaceable acts. This principle is also applied to labour law matters.
According to the recently added Section 11 of Article 1050 of the Code of Civil Procedure, in labour law matters, creditors can submit an application for the enforcement of irreplaceable acts to the court with:
As indicated in the explanatory memorandum to the draft amendment, this change aims to enable the more effective enforcement of judgments and streamline judicial proceedings.
On 1 August 2019 the minister of family, labour and social policy amended the regulation on the reimbursement of remuneration paid to young employees from the Labour Fund.
The amended regulation governs, among other things, the option for employers (in the event of a change to the minimum wage rate) to apply to the education centre responsible for vocational training placements, directly or through an employers' organisation, to adjust reimbursements received from the Labour Fund accordingly within 30 days from the date of the new minimum wage rate's entry into force.
On 1 September 2019, following the entry into force of the Regulation of the Council of Ministers of 13 August 2019 (which amended the regulation on vocational training for young people and their remuneration), a 1% increase in remuneration rates for employees in vocational training and apprenticeships was introduced compared with the average remuneration enjoyed by regular employees.
The Act of 19 July 2019 amending the Act on Minimum Remuneration for Work will enter into force on 1 January 2020 (Articles 2 to 4 concern the costs of performing a public contract following changes to the remuneration rates of employees in vocational training and apprenticeships as of 1 September 2019). The act will exclude internship allowances when calculating employee remuneration.
The amendment aims to foster a more transparent minimum wage structure and to improve the situation of the lowest-paid employees. The change will increase the remuneration of employees who have been earning the minimum wage with an internship allowance included.
On 18 September 2019 changes to the minimum wage were announced. As of January 2020, the minimum wage will be Zl2,600 gross. This is an increase of Zl350 compared with the current rate.
The minimum hourly rate will be Zl17. These increases exceed the rates announced previously (ie, the government had said that the minimum wage would be increased to Zl2,450 gross and the minimum hourly rate to Zl16).
According to the government's announcements, the minimum wage looks set to increase steadily in the coming years (Zl3,000 gross in 2021 and Zl4,000 gross in 2023).
In 2020 the minimum wage will be equal to 49.7% of the average remuneration forecast for that year.
The recently published explanatory memorandum to the draft budgetary act for 2020 announced that the limit on retirement and disability insurance contributions will be abolished.
At present, pursuant to Article 19 of the Social Insurance System Act (Journal of Laws 1998, 137, Item 887, as amended) retirement and disability insurance contributions in a given calendar year must not exceed 30 times the expected average monthly remuneration for a given calendar year.
In 2018 the Constitutional Tribunal found a previous amendment abolishing this limit to be unconstitutional due to an incorrect adoption procedure.
Therefore, the possibility of amending Article 19 and abolishing the limit on retirement and disability insurance contributions (which would lead to a sudden increase in labour costs and a burden on the part of the highest-paid employees) should be taken into account by the legislature and employers.
The media has recently reported on proposed changes to the deduction of social security contributions from business income. The changes concern:
The scope of the actual changes remains uncertain, but employers should prepare for a significant increase in social security charges going forward.
According to the 2020 draft budgetary act, average remuneration in 2020 will increase from Zl4,765 to Zl5,227 (ie, by almost 10%). In practice, this means that the social security contributions paid by employers will increase by almost 10% in that time.
On 27 September 2019 a government bill amending the Act on Special Solutions Serving the Implementation of the Budget Act 2019, the Act on the Company Social Benefit Fund and the Large Family Card Act, which provides for an increase in the amount of deductions from the Company Social Benefits Fund, was sent to the president for approval.
The amendment assumes the following basis for calculating fund contributions:
The bill sets a deadline of 31 October 2019 for the transfer of additional contributions and increases to the appropriate parties.
A recently published draft regulation of the minister of family, labour and social policy aims to amend the existing Social Insurance Institution practices regarding:
The proposed changes are expected to come into force on 1 January 2020.
For further information on this topic please contact Agnieszka Fedor or Filip Sodulski at Soltysiński Kawecki & Szlęzak by telephone (+48 22 608 7000) or email (email@example.com or firstname.lastname@example.org). The Sołtysiński Kawecki & Szlęzak website can be accessed at www.skslegal.pl.
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