A revolution in employment – new PIP rights in 2026
The Ministry of Family, Labour, and Social Policy has presented a draft reform that will radically change the role of the National Labour Inspectorate (PIP). The new regulations are intended to strengthen the PIP by granting inspectors the authority to convert civil law contracts into employment contracts. Businesses should familiarize themselves with the proposed changes, as the new regulations not only shorten the path to full-time employment but also drastically increase the financial consequences for irregularities.
New competences of the National Labour Inspectorate – immediate transformation of contracts
The Ministry of Family, Labour, and Social Policy is implementing changes aimed at strengthening labour law enforcement. The most important change for employers is granting PIP inspectors the authority to issue an administrative decision that automatically converts an improperly concluded civil law contract (including B2B) into an employment contract.
What will be the most important changes?
Administrative decision instead of court. Currently, contract transformation requires lengthy legal proceedings. After the reform, the Inspectorate’s decision will be immediately enforceablewith respect to future consequences (employee obligations, taxes, social security contributions), even if the employer appeals.
Expanded scope of inspections. The PIP’s powers will be expanded to include ordering partiesemploying solely under civil law contracts.
Risk analysis and data. The effectiveness of the National Labour Inspectorate (PIP) will increase thanks to access to data from the Social Insurance Institution (ZUS) and the National Revenue Administration (KAS), which will enable risk analysisand the targeting of entities with a high probability of violating the law.
Remote inspections. The Inspectorate will gain tools to conduct inspections and interviews remotely (videoconferencing, online inspections), which is intended to speed up and facilitate oversight.
Chief Labour Inspector, Marcin Stanecki, emphasizes that the Inspectorate will act prudently and that the new powers will be used only when it is “fully convinced” that the contract violates the law or has been imposed on the weaker party. However, the majority of inspections are expected to stem from employee complaints, requiring companies to urgently review their employment models.
Financial consequences for employers and criticism from the SME sector
Entrepreneurs must be aware that the risk of improper employment will be greater – criminal sanctions will become more severe, and an administrative decision will mean immediate additional financial burdens.
Drastic tightening of sanctions
The draft amendment provides for significantly tougher financial sanctions in the event of improper conclusion of civil law contracts, mainly in situations where it should actually be an employment relationship and not, for example, a contract of mandate.
Increase in penalties – the minimum and maximum penalty for concluding a civil law contract instead of an employment contract will be doubled – from the current range of PLN 1,000 – 30,000 to 2,000 – 60,000 PLN.
Burdens for entrepreneurs
If the National Labour Inspectorate issues a decision ordering the transformation of a civil law contract into an employment contract, the entrepreneur will have to pay the following amounts:
- Overdue ZUS contributions – the need to pay social security and health insurance contributions for the entire duration of the incorrect contract – up to 5 years back, along with interest.
- Tax correction – the obligation to correct tax settlements, potentially including VAT, due to a change in the form of taxation.
New regulations and the doubts of the SME Ombudsman
The Ombudsman for Small and Medium-sized Enterprises, Agnieszka Majewska, expressed serious reservations, pointing out numerous threats to entrepreneurs:
- Interference with freedom of contract. The administrative decision constitutes excessive interference with the freedom of contract and the stability of economic transactions.
- Risk of arbitrariness. There is a risk of subjective, arbitrary decisions by the Inspectorate.
- Uncertain financial implications. The Act fails to clarify a number of key issues related to immediate enforceability, including how contributions and taxes already paid by the entrepreneur (contractor) will be settled and how the National Labor Inspectorate’s decision will impact the employer’s VAT settlements.
- Short appeal deadline. The excessively short 7-day deadline for appealing a decision is problematic for SMEs that lack legal resources.
Changes in labour law. What should entrepreneurs do today?
In the face of upcoming regulatory changes, active preparation, not passive waiting, is crucial. We recommend taking a number of actions to minimize potential risks and ensure compliance.
Civil law contract audit. Conducting a detailed audit of all B2B contracts and contracts of mandate/contracts for specific task that may exhibit characteristics of an employment relationship (including subordination, fixed location and hours of work, fixed remuneration).
Documentation. Detailed and complete documentation is essential; it will help confirm, among other things, the autonomous nature of cooperation with B2B partners (e.g., the ability to provide services to other entities, responsibility for results, lack of management).
Voluntary conversion contracts. If the nature of the cooperation is typically employee-based, it is worth considering converting the contracts into an employment relationship before the Inspectorate does so.
Prevention and organizing documentation are currently the best defensive strategy. In the event of a PIP intervention/inspection, the employer will bear the burden of proving the erroneous nature of the decision. Therefore, always act in accordance with the regulations to avoid potential consequences. Guaranteed compliance is the key to success. Our clients can rest easy knowing that their HR and payroll are in the best hands. Find out how we can help your company: https://ca-staff.eu/en/services/hr-and-payroll-outsourcing/
See also
Discover our services
Contract Administration Sp. z o. o.
Wronia 10
00-840 Warsaw
Poland
Office reception: +48 22 295 32 00
Sales department: +48 22 295 31 04
contact@ca-staff.eu
NIP: 526-001-29-88, KRS: 0000028831,
REGON: 012548510. The District Court for the
capital city of Warsaw, XIII Commercial Division
