The contribution to civil law contracts is the subject of ongoing work in the Ministry of Labor. The exception to this are to be contracts for pupils and students up to the age of 26. As lawyer Tomasz Lasocki said, Poland is in a narrow group of European countries that “can avoid collecting contributions if someone is working.”
The Ministry of Family, Labor and Social Policy has prepared a project amendments to the Act on the Social Insurance System and the Act on Social Insurance in Case of Accidents at Work and Occupational Diseases.
Civil law contracts subject to contributions
The Ministry informed that the regulation assumes the coverage of civil law contracts with compulsory social insurance (pension, disability, sickness and accident insurance), with the exception of contracts performed by secondary school pupils or students up to the age of 26.
The ministry did not disclose details of the project, but it is to be discussed at the next meeting of the Economic Committee of the Council of Ministers.
According to the current legal status, contracts for specific work are not subject to contributions. In the case of contracts for services, contributions do not have to be paid if, for example, contributions from another employer are paid from at least the minimum wage. They also do not have to be paid if someone has at least two contracts per month and contributions of at least the minimum wage were also paid from the first one.
One of the milestones
Tomasz Lasocki from the Faculty of Law and Administration of the University of Warsaw and an expert of the Federation of Polish Entrepreneurs reminded PAP in an interview that full contribution collection of all civil law contracts is one of the so-called milestones that Poland must achieve in order to receive money from the KPO.
– It's already July, so the question is when this solution is to come into effect and what the process of reaching the final solution is to look like. For years, I have been pointing out the need to revise the rules for being subject to social insurance so that they provide real access to the system and are not used as an instrument of competition between entrepreneurs. Unification of the rules achieves these goals – said Lasocki.
– At the moment, we have a situation where, depending on the number of civil law contracts, some are subject to contributions and others are not. This means that we are in a narrow group of countries in Europe that are able to not collect contributions if someone is working – even if their previous contributions do not allow them to work out the lowest pensions. And we are truly an exception in the world that we are able to collect a premium for a contract for a lower amount, and not collect a premium for a contract with a higher remuneration – said the expert.
He stressed that the aim of the changes should be to provide working people with the constitutional right to social security, i.e. to retirement pension, disability pension and other benefits.
People “outside the system”
According to the lawyer, the reform of the insurance system should include not only contracts for services, but also contracts for specific work, because people working under them “are now outside the system”. As he noted, currently three quarters of people insured in Social Insurance Institution work full-time, and one quarter are insured on some other basis.
The expert noted that it is also necessary to consider how to pay contributions for contracts of people up to the age of 26, while providing relief that will allow them to smoothly enter the labour market, but will not lower the level of social security.
– Today, young people's contracts are not subject to contributions at all, which means that if such a person dies while on a contract, it is not even an accident at work, so if they have a family, none of their closest relatives will receive anything. The problem of being covered by insurance is therefore broader than just the abolition of the rule that says that an additional contract for services is no longer subject to contributions – said Lasocki.
Upper limit of amount required
He noted that the upper limit up to which contributions would be paid, i.e. the maximum annual contribution assessment basis, should continue to apply.
– Thanks to this limit, the state does not take on too many burdens. The pension system is generous in its mechanics, especially for those who earn well, because every year we index contributions by a dozen or so percent – he explained.
Freelancers are afraid of changes
Recently, freelancers have expressed concerns about the changes. The agency praktycy.com assessed in its analysis that imposing social security on all contracts, especially contracts for specific work, is a “change in the wrong direction”. Experts emphasized that Poland needs a systemic solution that, while reforming the pension system, will not “throw the baby out with the bathwater once again” and “will not destroy such an innovative industry as freelancing”.
Tomasz Lasocki believes that “labor contributions are a public levy, so in this respect it is similar to taxes.”
– It's not something pleasant, but you have to bear this burden. In the case of insurance, there is another issue, that the insurance premium also has a protective function. And of course, paying premiums “doesn't make sense” if nothing happens, but if something does, it turns out that protection is a good thing – said Lasocki.
As he added, “it's not like freelancing will cease to exist”. – But it can't be like that, that it is based on social dumping, because one employee is cheaper than another, who will perform the service, being insured. Healthy competition of the modern economy should not be based on this – assessed Lasocki.
Contracts for specific work in ZUS
In 2023, 1.6 million contracts for specific work were reported to ZUS, which is 81.7 thousand less than in 2022. The largest number of people performing contracts for specific work were involved in information and communication – 87.6 thousand (20.37% of all contracts). This was followed by professional, scientific and technical activities – 79.1 thousand (18.38%), activities related to culture, entertainment and recreation – 57.2 thousand (13.30%) and education – 53.8 thousand contractors (12.51% of all contracts).
In turn, at the end of 2023, 1.9 million people worked on contracts for services, of which 1.3 million paid pension and disability insurance contributions.
Combining insurance titles is common
In 2020, the Instrat Foundation prepared a report on the scale of the phenomenon of overlap of social insurance entitlements at the request of the Social Insurance Institution. The report stated that out of over 16 million employees – 6.4%, or over a million people, combine employment under an employment contract, contract of mandate or self-employment, i.e. they have overlap of social insurance entitlements. This allows them to pay contributions to a lower extent.
The most common combination of contracts, accounting for more than half (55%) of cases, is the co-occurrence of an employment contract and a contract for services, where the basis for calculating social insurance contributions is usually the remuneration from the employment contract.
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