Labour law and HR Will the National Labour Inspectorate (PIP) Gain the Power to Determine Employment Relationships? A Legislative Proposal Worth Watching – Planned to Enter into Force in January

Work is underway on a draft law that would grant the Polish National Labour Inspectorate (Państwowa Inspekcja Pracy – PIP) significantly expanded powers — including the ability to independently determine whether an employment relationship exists. According to the proposal, the new rules could take effect as early as January next year.

What does the draft law propose?

Under the current proposal, after completing an inspection, a PIP inspector would be able to:

• issue a compliance order to be carried out within 14 days,
• file a claim with the Labour Court, or
• ❗ issue an administrative decision establishing an employment relationship, which would immediately produce legal effects.

This last competence is considered the most far-reaching. The decision would become binding upon delivery, even if the employer appeals.

Immediate consequences for employers

Once the decision is delivered, the employer would be required to treat the individual as an employee, including:

• registering them with the social security authority (ZUS),
• keeping personnel files,
• calculating leave and remuneration,
• applying all obligations under labour law.

Importantly, an appeal could be filed only afterwards, but the employer would still have to fulfil all obligations immediately, regardless of the future outcome of the case.

Compensation from the State Treasury? In practice, difficult to obtain

Employers would be able to seek compensation from the State Treasury if the PIP decision is found unlawful.

However, in practice, this may be challenging because:

• the law does not provide for full compensation,
• proving the extent of the damage would be complex,
• compensation proceedings may take many years.

Therefore, the real prospects of obtaining meaningful compensation are limited.

How should organisations prepare? Key recommendations

Given the potential impact of the reform, businesses should consider taking steps now:

1. Monitor the legislative process closely

The draft may still be amended, but the direction is clear. We will continue to provide updates.

2. Review B2B contracts and civil-law agreements (e.g., service contracts)

Particularly concerning the risk of reclassification into an employment relationship.

3. Identify areas of risk

If your organisation relies on cooperation models that could be challenged by PIP, it is advisable to:

• review sensitive contractual clauses,
• organise and update documentation,
• prepare internal processes for potential inspections.

4. Implement a procedure for PIP inspections

Including rules for communication, documentation handling, and dealing with inspectors.

5. Consider a compliance audit

This can help verify whether your current cooperation models comply with legal requirements and identify any necessary corrections.