bnt attorneys for CEE close.straight.forward

An increase in minimum remuneration is certain. Only by how much?

2017 will be revolutionary for the minimum remuneration level, including for those on civil law contracts

On 1 January 2017 further amendments to the law on minimum working remuneration will come into force (some are already applicable). Not only will the minimum salary rate change (currently it is PLN 1.850 gross) but also the manner in which it is valorized and the scope of workers’ entitlement to remuneration – will undergo modification.

The most important news is that the minimum monthly remuneration will increase to PLN 2.000, i.e. by 8.1%. This minimum salary will also apply to new employees during their first year of work (this used to be 80% of the applicable rate).

What is more, as of 2017 the minimum working remuneration, defined as the minimum hourly rate, will also apply to those engaged under a contract of mandate or a contract for services (i.e. so called civil law contracts). The hourly rate from 2017 will amount to PLN 13 (after rounding-up). This is considerable news for companies, which have so far relied mainly on human resources recruiting from independent contractors (e.g. in the security, courier, or cleaning services fields).

An increase in minimum salaries will also lead to a rise in other payroll costs. For instance additional remuneration for nighttime work is calculated based on the minimum remuneration (20% of the hourly rate).

For lowering remuneration so that it does not reflect the minimum salary level, as of 2017 an entrepreneur (or even their attorney) may face a penalty of up to PLN 30.000. Additionally, the State Labour Inspectorate (PIP) will gain new control powers in that regard.

The level of minimum remuneration is discussed every year at the Social Dialogue Council, which represents workers, employers and the government. Where a common understanding on the subject matter is not reached, the the governmental side has the final say. This year initially the workers’ unions proposed PLN 1.970, the employers PLN 1.900, whereas the Ministry of Labour and Social Policy proposed PLN 1.920. The government’s final proposal, raising the minimum salary up to a level of approx. 47% of the estimated average monthly remuneration, was not received with enthusiasm among employers’ representatives. They pointed out that a gross amount of PLN 2.000 in practice almost matches the average salary in the micro-entrepreneurs sector.

The final shape of minimum remuneration in 2017 will be known at the latest in mid-September, when the statutory deadline for announcing the minimum salary elapses; this salary is to be set out by a Council of Ministers regulation – given that no consensus was reached in the Social Dialogue Council. Therefore the chances are that the government will introduce PLN 2.000 gross as the minimum salary.

 

Source: Act of 22 July 2016 amending the act on minimum remuneration for work and amending other laws (J.L. 2016, item no. 1265); Press notice from the Social Dialogue Council meeting of 14 July 2016