Salaray and Wage Regulation
New regulations in Labour Law in Poland on the minimum hourly pay under contracts of mandate and contracts for services
On 5 August 2016, the President signed an Act of 22 July 2016 amending the Minimum Wage Act and some other acts (hereinafter "the Act"). The Act revolutionises the performance of services under a contract of mandate or a contract for services as it introduces the concept of a minimum hourly pay.
As a result of the amendment, from 1 January 2017 the minimum hourly pay is going to amount to over PLN 12 (gross), and – like the minimum wage – it is going to be indexed every year.
The minimum hourly pay is going to apply to contracts of mandate (umowa zlecenie) and contracts for services, performed by the contractor or the service provider, respectively; it is also going to apply to the self-employed who single-handedly perform services for businesses.
However, the hourly rate is not going to apply to persons who can choose the place and time of work and at the same time work on commission. The Act also does not apply to specific contracts for care-taking services, for example those concluded as part of running a family nursing home for taking care of a child in temporary custody or taking care of a group of people on trips lasting more than one day.
The minimum hourly pay is going to apply to all other agreements and contracts regardless of how the minimum pay is set – hourly/daily/weekly/monthly, etc. The minimum hourly wage must be paid in cash, at least once a month.
The amount of the minimum hourly pay is linked to the minimum wage determined annually. The minimum hourly pay is going to increase in proportion to the increase of the minimum wage determined for employees. If the minimum wage amounts to PLN 2,000 from 1 January 2017, the minimum hourly pay for some civil law agreements is going to amount – per the Act – to PLN 13 (gross). In the subsequent years that rate will also depend on the annual rate of increase of the minimum wage.
Before the amendment, the Minimum Wage Act specified the rules of the minimum remuneration for work only for persons employed under a contract of employment, an appointment, an election, a nomination or under a co-operative employment contract. The amount of the minimum wage is determined as a monthly rate; it is also possible to determine an hourly rate for workers based on their working time. Currently, the minimum wage amounts to PLN 1,850.
The aim of the amendment is to curb the abuse of civil law contracts by employers.
The minimum hourly pay provisions are going to be enforced by the Polish National Labour Inspectorate, which will be given additional rights in this regard. Employers breaching the provisions on the minimum hourly pay may be fined from PLN 1,000 to PLN 30,000.
The Act prohibits the waiver of the right to the minimum wage or its assignment to another person, and the amount must be paid in cash. Moreover, the Act guarantees to the contractor/service provider a regular payment of the minimum hourly wage – in the case of contracts concluded for more than 1 month – at least once a month.
The Act also prohibits employers from differentiating the minimum wage on the basis of the length of service (that is, to reduce the minimum wage for persons working their first year to 80% of the minimum wage). Once the amendments become effective, all workers will have the right to the same minimum wage regardless of their length of service. The minimum wage is not going to include extra allowance for work at night.
The new provisions are going to apply to all types of contracts, also those concluded before 2017. A special solution is going to apply to contracts concluded before 1 September 2016. Each party to such a contract may by 31 December 2016 invite the other party to negotiations to reach an agreement on an appropriate wage adjustment. If they fail to reach the agreement within 30 days of the day of the request, each partymay terminate the contract with the notice period specified in the contract or with a 2-month notice.
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