Processing of orders and contracts for specific work. Łukasz Kozłowski comments

The Ministry of Family, Labor and Social Policy (MRPiPS), in response to a question from the tvn24.pl business editorial team on the subject of contributions for civil law contracts, replied that the ministry is currently “undergoing analytical work and arrangements in order to prepare a draft act implementing the A4.7 reform (recorded in National Reconstruction Plan). The idea is to “increase social protection for all people working under civil law contracts.”

“As part of the implementation of the reform in question, it is required, among other things, to cover all mandate contracts with compulsory social insurance – they would be subject to the same social insurance rules as employment contracts. In the case of mandate contracts, it is necessary to change the nature of sickness insurance (from voluntary to mandatory),” the Ministry of Labor and Social Policy said. .

As added, in accordance with the draft act being prepared, all contracts for specific work should also be covered by mandatory retirement, disability and accident insurance (sickness insurance will be voluntary). “Currently, contracts for specific work are covered by compulsory insurance only if they are concluded with their own employer with whom they also have an employment relationship, or if, under such a contract, they perform work for the employer with whom they have an employment relationship,” it was explained.

The Ministry also specifies that the above changes would not apply only to civil contracts concluded by students under 26 years of age. These contracts would remain non-contributory, as is the case today.

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Łukasz Kozłowski, chief economist of the Federation of Polish Entrepreneurs and member of the supervisory board of the Social Insurance Institution, referred to this proposal in a series of entries on the X website (formerly Twitter).

As he said, “the discussion about this change is often reduced to interpreting it as a manifestation of the state's fiscalism, which is looking for money in the pockets of another group.” “But the stake is also about healing the labor market and competition,” he said.

As he explained, currently “if we have two insurance titles (contracts), in accordance with the provisions of the Act on the Social Insurance System, in some cases we can pay contributions only from the first of them.”

He pointed out that two employment contracts are fully coveredand employment contract i mandate contract concluded with your own employer. At the same time, however, if the mandate contract is not concluded with the same employer, it is no longer subject to contributions.

“This also applies combination of mandate contract + mandate contract and business activity + mandate contract. Previous regulations even allowed for the conclusion of the first contract, even for the amount of… PLN 10 per month, to be exempt from contributions,” wrote Łukasz Kozłowski.

This state of affairs was changed by the Act of October 23, 2014. As Kozłowski points out, it introduced “the principle of contributing contributions to the minimum wage level.”

“The next contract was not subject to contributions, provided that the sum of the previous contracts was at least equal to the minimum wage. The new regulations entered into force on January 1, 2016, which means the market had 14 months to prepare for the changes. It turned out to be a hitbecause companies had enough time to renegotiate contract terms and adjust budgets,” the economist wrote.

Thanks to this postponement, the solutions entered into force smoothly, without causing serious tensions on the labor market. The value of non-contributory mandate contracts decreased from PLN 10.7 billion in 2015 to PLN 8.3 billion in 2016. Contractors at least gained the opportunity to work out right to a minimum pension.

Kozłowski noted that the lack of contributions for mandate contracts contributed to the trend of an increase in the number of people receiving a pension lower than the minimum.

“While in 2011 we had almost 24,000 people receiving a pension lower than the minimum, 12 years later there were almost 397,000 of them – over 17 times more,” wrote the economist.

The economist explained that “fortunately, we can determine the value of non-contributory contracts quite precisely, thanks to the fact that a health contribution is due for each mandate contract. It is enough to establish and compare the basis for the assessment between social and health insurance to determine the scale of the phenomena.”

Based on data from the Social Insurance Institution, he estimated that in the years from 2008 to 2023 the value of unpaid contributions amounted to PLN 48 billion. In 2023 alone – PLN 13 billion.

According to Kozłowski, these data mean “that approximately PLN 28.4 billion in pension contributions have not been recorded on contractors' individual accounts in ZUS for the last 15 years, which means that the amount constituting the basis for calculating their future pension will be lower by this amount“.

“This brings us to the most important conclusion regarding employees – Saving on premiums is the last thing we should be doing. Social security contributions are not an 'empty cost', but a transfer of income over time and specific security,” wrote the economist.

Kozłowski pointed out that, yes, contributions are an expense, but one thanks to which we obtain something in return. He emphasized that every zloty paid translates into greater entitlements to retirement, sickness, maternity and disability benefits. He added that “if we want to reduce the burden on employees without harming them, the only way is to change taxes.”

The economist further emphasizes that differences in costs resulting from unequal contributions lead to “segmentation of the labor market, and those employed on mandate contracts lose not only their entitlements to benefits, but also the rights and protection related to the employment relationship – for example the right to leave.” .

“The resulting race to the bottom in the labor market is also not beneficial for entrepreneurs. The value of contracts on the market, e.g. public procurement, is falling because their price begins to take into account the possibility of cheaper employment,” he pointed out in the entry. “In such conditions, companies that do not resort to various types of procedures related to the use of mandate contracts in order to reduce labor costs lose their competitiveness and, consequently, their chances of winning the tender or obtaining the order,” he added.

In Kozłowski's opinion, the only member of the economic chain who benefits in such a case is the “purchaser of services”. He pointed out that “a huge part of the financial benefits resulting from the incomplete contribution of mandate contracts was derived by… the state. It was the public procurement market, through the dominance of the price criterion, that played a leading role in this trend.

The economist wrote that if we look at the excellent report “Full income – incomplete contributions” by the Instrat Foundation from 2020, it turns out that “basically nowhere in Europe does such a strange logic of the social security system operate.”

“In some countries, it is only possible to partially reduce contributions, and in strictly defined cases. With our combined titles, we are, next to Malta, an absolute exception,” he added.

Małgorzata Samborska, tax advisor and partner at Grant Thorton, presented possible scenarios for the amount of employee salaries after the introduction of ZUS for all mandate contracts from 2025.

In the next entry, she noted that “the contractor's net amount will decrease by 28% if the company does not increase the costs of the contract on its side.”

In turn, “the company's costs will increase by almost 40 percent if the contractor is to receive the same amount 'on hand' after obtaining the mandate contract.”