Over the past several months, debate regarding the reform of the National Labour Inspectorate (PIP) has continually resurfaced, gaining and losing momentum in equal measure. Some time ago, however, media headlines have described it as “on hold” or “frozen”.

After several months of work, the Prime Minister stated on social media that, in his view, allowing an official to change the form of employment without asking the employer or the worker, and without a court judgment, is a bad idea. At the same time, he announced that the government would find better ways to protect employees. And it seems that they did manage to find such ways, as recent press reports indicate that the government resumed work on the reform a few days ago.

Where did PIP reform come from?

The answer helps us – at least approximately – predict its future.

The amendment to the PIP Act did not appear “out of nowhere”. It forms part of Poland’s broader commitments under the National Recovery Plan (KPO). In other words, it is a milestone that must be achieved if Poland is to meet specific obligations towards the European Union. From this perspective, the question is not “whether it will enter into force at all,” but “when and in what final shape.”

The aim of the reform is stated as being a more effective fight against abuses on the labour market and its segmentation, in particular situations in which civil law contracts are used solely to reduce employment costs, even though in practice the cooperation differs little from a classic employment relationship.

Reclassifying a civil law contract as an employment contract

The most groundbreaking element of the draft was granting PIP the power to administratively determine the existence of an employment relationship – i.e. to issue decisions that are currently exclusively within the courts’ remit. In practice, this meant that, after conducting an inspection, an inspector would be entitled to issue a decision reclassifying a civil law contract as an employment contract.

Importantly, the explanatory memorandum assumed a clear shift in emphasis: decisive significance was to be given to the content of Article 22 of the Labour Code, not the parties’ intent or the name of the contract. If, in practice, the features of an employment relationship were present – subordination, work performed under management, at a specified time and place – the parties’ intentions would become secondary.

Changes in inspections

Alongside the legislative changes, PIP also announced a qualitative change in its approach to inspections of employers. There was to be less formal analysis of documents and more examination of how cooperation looks in practice. According to the media, inspectors would be interested, among other things, in:

• how tasks are carried out by the contractor;
• the degree of their independence;
• the time and place of performing activities;
• use of the principal’s infrastructure; and finally
• participation in typically employee-oriented processes (promotions, pay rises).

The draft also provided for data exchange between PIP, ZUS and the tax authorities, aimed at making the selection of entities for inspection far more precise and inspections far more effective. This goal was also to be achieved by introducing remote inspections.

A temporary pause is not a withdrawal

Although some time ago work on the reform project was temporarily suspended – when it was already at the final stage – it has now resumed after being halted by the Prime Minister. As anticipated, the government decided that it could not afford to lose the funds available under the National Recovery and Resilience Plan (NRRP).

While we do not yet know what final form the reform project will ultimately take, everything indicates that its assumptions will be softened compared to the previously agreed version. It should also be expected that the work will accelerate, as Poland must account for the NRRP funds by August.

Approaching civil law contracts

Contrary to alarmist slogans, the PIP reform never meant the end of civil law contracts (mandate contracts, contracts for specific work) or self-employment. It certainly did, however, mean the end of comfortable “paper” operations, without reflecting on how cooperation looks in reality.

In this respect, nothing has changed – the problem has always been where a contractor is, in practice, an “employee without a contract”, and the differences between them and employees hired under employment contracts are purely declaratory.

We must remember that, although there has been no increase in the powers of PIP so far, other risks remain in place:

• contractors may still challenge the type of contract and seek a finding that an employment relationship exists – based on discussions with clients, we know that work on the reform has emboldened contractors, who are already bringing such claims more often now, and we handle such cases in our firm;
• PIP inspectors may still question the nature of contracts and refer cases to labour courts;
• ZUS and the tax authorities may also continue to examine the true nature of cooperation and issue decisions resulting in the need to pay additional tax and social security contributions.

The most sensible strategy today, therefore, seems to be a calm, methodical audit – not only of contracts, but above all of practices in: management methods, communication, settlements, benefits, internal procedures.

It is worth creating a risk map, estimating the potential financial exposure and deciding where changes are truly necessary – and how much time is needed to implement them.

The shift in approach to civil law contracts – regardless of when and in what shape the reform ultimately enters into force – is a fact, meaning that a lack of response is no longer neutral. That is precisely why this is not a topic that can be safely postponed.

Read more about Polish HR law – PRO HR Year Book 2025