New version of the draft law extending the powers of the National Labor Inspectorate (PIP)

We are returning to you with the latest information on the reform of the National Labour Inspectorate (PIP).

On 30 January this year, a new version of the draft law extending the powers of the PIP was published on the website of the Government Legislation Centre. According to the current proposal, inspectors will continue to have the right to issue decisions confirming the existence of an employment relationship, but this power has been limited compared to previous assumptions.

Granting the PIP the power to convert civil law contracts into employment contracts is one of the so-called milestones on which the disbursement of funds from the National Recovery Plan depends. This makes their implementation a priority for the government in 2026, and it is expected that the draft will be debated in the Sejm (lower house of parliament) before the end of this quarter. 

Below is a summary of the most important assumptions of the draft amendments.

Two-stage control procedure – a “safety net” for employers

The district labour inspector will not issue a decision confirming the existence of an employment relationship (e.g. in the case of B2B contracts or contracts of mandate) immediately. A key element of the procedure will be the prior issuance of an order to remedy the identified violations.

The employer will be given a “chance” to voluntarily adjust the cooperation model (e.g. by changing the disputed terms of cooperation or concluding an employment contract). Only failure to comply with this order will allow the inspector to initiate administrative proceedings and issue a decision confirming the existence of an employment relationship.

Appeal procedure and judicial protection

The inspector’s decision may be appealed to the labour court, through that body, within one month of the date of delivery of the decision. Importantly, the appellant will be required to present all arguments and evidence in the appeal itself – subsequent references to them may be significantly impeded.   

The inspector’s decision will have legal effect from the date of its issuance, but it will become enforceable on the date of expiry of the deadline for lodging an appeal or on the date of a final court ruling.

The court will be able to grant security in the form of protection under labour law, which in practice may significantly limit the possibility of terminating the employment relationship for the duration of the dispute. This will apply to both fixed-term and indefinite contracts.

New: individual interpretations by the National Labour Inspectorate

There are plans to introduce individual interpretations issued by the National Labour Inspectorate, similar to those already issued by tax authorities and the Social Insurance Institution (ZUS). Entrepreneurs would gain the possibility to request an assessment of a planned cooperation model, which could be an important tool for limiting the risk of reclassification of the legal relationship.   

Risks and recommendations

The PIP decision will mainly have future effects. It will not apply retroactively, but the district labour inspector will have the power to bring an action before the court to determine the existence of an employment relationship for the period prior to the decision.

Therefore, the reform under consideration significantly strengthens the powers of the PIP and, in our opinion, will result in more intensive inspections, which will be facilitated by the exchange of information between the PIP, the Social Insurance Institution (ZUS) and the National Revenue Administration (KAS).

Consequently, it should be borne in mind that

• the risk of B2B models and civil law contracts being challenged,
• protracted court disputes and legal costs,
• potential financial burdens on the company and the collaborator once the decisions become final.  

We recommend the following measures now:

• an audit of B2B contracts and civil law agreements in terms of the characteristics of the employment relationship and the preparation of a business justification for concluding such agreements,
• verification of the actual manner of cooperation (practice vs. contractual provisions, collected evidence),
• preparation of internal procedures in case of an inspection by the National Labour Inspectorate.  

According to the draft, the act is to enter into force three months after its announcement.

Currently, the draft remains at the government stage and has not yet been submitted to the Sejm.

We will keep you informed of further developments.   

If you have any questions or need to discuss the situation in your organisation, please do not hesitate to contact us.

or your adviser from MDDP.

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This Tax Alert does not provide legal or tax advice. MDDP Michalik Dłuska Dziedzic & Partners spółka doradztwa podatkowego spółka akcyjna is not responsible for the use of the information provided in the Alert without the prior consultation with legal or tax advisers.