The Polish Government has decided to avoid introducing social insurance contributions on non-tenured civil law labour contracts, sometimes referred to as “junk contracts”.
That is despite the fact that bringing in such charges has been agreed with the European Commission as part of an agreement for the unlocking of European Union funds.
On November 21, Maciej Berek, cabinet secretary in the government, told financial news portal Money.pl: “We will not introduce contributions on all civil law contracts, including specific-task contracts because such a solution would burden employers and contractors” with, according to him, about €1 billion to €1.5 billion in additional costs.
Non-tenured civil law contracts in Poland for the performance of specific services or allocated hours of work offer no employment protection or holiday rights, which is why they are called “junk contracts”. They are used by employers to control costs but leave those engaged in this fashion without social insurance protection or pension contributions.
The previous Conservative (PiS) administration had agreed to the imposition of mandatory social insurance contributions for all forms of non-tenured labour contracts covered by civil rather than labour law. That was part of their unsuccessful effort to unlock post-Covid pandemic and structural funds frozen by the commission over Poland’s alleged violations of the rule of law, stemming from judicial reforms introduced by the PiS.
The centre-left government led by Prime Minister Donald Tusk ,which replaced the PiS administration in December last year, announced on November 21 this year that it would stall any move to implement additional social insurance obligations to avoid additional financial burdens for employers.
Berek said that this element of the agreement with the commission would not be implemented.
He also argued that the specific-task contracts were preferred in the arts and creative industries as they allowed an exemption of 50 per cent of the given contract from taxation.
According to the Social Insurance Institution (ZUS), in 2023 close to 350,000 people in Poland worked on the basis of such specific-task contracts.
If social insurance was introduced on those agreements from the start of 2025, it said, several hundred thousands people would see a tax hike just as the country prepared to go to the polls in the presidential election in May, which the ruling coalition is keen to win.
Asked by Money.pl about how the government’s decision on the non-implementation would be viewed by the commission, Berek acknowledged that there would be “difficult dialogue” and that the Tusk administration would argue for the need to maintain flexibility over the timing of any introduction of edict.
The commission unlocked billions of euros following the current government’s pledges to reverse the judicial reforms introduced by the PiS and contested by the commission and European courts.
Yet the judicial reforms have been stalled by a stand-off between the government and the PiS-aligned President Andrzej Duda who has the power to veto any legislation.
