15.05.2024 Labour law

[Poland] Full ZUS for mandate contracts. The government wants to reform the labour market

Labor market reform is coming, which means lower net pay for employees working on the basis of mandate contracts and higher costs for employers hiring them. The government plans to implement one of the National Reconstruction Plan (KPO) milestones – full contribution rate for all mandate contracts from 2025.

The upcoming labour market reform aims to reduce its segmentation and increase social protection for people working under civil law contracts. The key element of the planned changes is the implementation of one of the points of the National Reconstruction Plan (KPO), which involves covering all civil law contracts with social security contributions, excluding contracts of mandate concluded with high school students and students up to the age of 26.

At present, the final shape of the reform is not known, so it is not known whether contracts for a specific task will also be subject to contributions. Read also: Civil law contracts and JDGs counted to seniority?

Effects and goals of the planned labour market reform

The government’s decision to fully cover all mandate contracts from 2025 with ZUS raises many concerns and controversies, both among contracting parties and contractors.

The proposed changes are primarily intended to:

  • Provide people employed under civil law contracts with access to employee benefits such as sickness, maternity, retirement and disability insurance;
  • Guarantee minimum standards of remuneration and legal protection for people working under civil law contracts, such as those available to employees employed under employment contracts;
  • Provide additional funds to finance social benefits for ZUS.

The reform proposed by the government is also intended to help reduce the so called grey zone. Nevertheless, it raises many concerns among employers, who point out that such a change may:

  • Reduce the competitiveness of Polish companies;
  • Increase the cost of cooperation with people working on the basis of mandate contracts;
  • Reduce labour supply;
  • Increase the number of unregistered contracts;
  • Worse the situation of moonlighters;
  • Generate additional costs for companies.

The negative aspects of the introduction of the reform in question are indicated, among others, by: Lewiatan Confederation.

Mandate contract – current contribution rules

The mandate contract is regulated in the Civil Code. This form of employment offers greater flexibility than an employment contract and in certain cases is subject to reporting to ZUS.

There is a minimum hourly rate for the mandate contract, which in 2024 is:

  • from January to June – PLN 27.70,
  • from July to December – PLN 28.10.

Mandatory insurance and ZUS contributions for mandate contracts are as follows:

  • Persons for whom a mandate contract is the only entitlement to insurance are automatically covered by retirement and disability insurance as well as accident insurance. Sickness insurance, however, is voluntary for these people (the insurance period begins on the day indicated in the contract as the day of its commencement and lasts until the date of its termination or expiry),
  • Persons who receive remuneration from several mandate contracts with different contractors must pay ZUS contributions on the sum of remuneration from these contracts. This is because these contributions are mandatory for all contracts until the total amount of income from them in a given month does not exceed the minimum wage. However, after exceeding this amount, only the health insurance contribution is paid from each subsequent mandate contract,
  • Persons performing work on the basis of a mandate contract concluded with their own employer are obligatorily subject to all social insurances on the same terms as in the case of an employment contract. In order to calculate ZUS contributions, the total remuneration from both sources is taken into account.

Mandate contract – statistical data

When discussing the essence of employment under mandate contracts, it is worth asking what number of people perform work on its basis. According to data from the Central Statistical Office, on the last day of June 2023, 2,332.5 thousand people performed work under mandate contracts and related contracts in Poland.

9 out of 10 people performing mandate and related contracts were hired in the private sector, and the largest number of people performing work on the basis of mandate and related contracts lived in the Warsaw-Capital Region and the Silesian region – 287.5 thousand, and 278.3 thousand people.

Interestingly, the share of women in the number of contracts concluded is quite significant, and there is a predominance of women over men among contractors aged 36 to 65. For example, in the section – Health care and social assistance – the share of women in the total number of contractors amounted to 83.2%.

Learn more: Civil law contracts and JDGs counted to seniority?

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