The PiS government to introduce a new minimum hourly wage scheme

As announced in the election manifesto the PiS government introduced a draft law, which should be introduced from 1^st July, 2016, the introduction of a statutory minimum hourly wage. The minimum hourly performed wage amounts to 12 Polish zloty (around 3 euros).

The minimum hourly wage applies to people who are employed on the basis of civil contracts, or for the execution of contracted work or services under work contracts and self-employed. According to wide-spread practice, especially from Polish employers, over 2 million Poles work in such kind of employment conditions, which excludes the labour law. Due to this the employers achieve significant labour-related savings. In addition, the employer does not pay sickness benefit and continued wage for holidays. However, the contractor has to pay substantial payments for his/her health and pension insurance.

However, not affected in this new minimum hourly wage regulation, employees working under employment contracts (which are determined annually). While related to the statutory minimum wage on a monthly period minimum wage scheme, the employer should pay full-time workers at least 1,850 Polish zloty gross per month, also the employers have to pay in future more for an employment contract for work and service, or other civil contracts. Due to a minimum hourly wage being 12 Polish zloty, the payment for an eight-hour day would equate 2,016 Polish zloty per month. Consequently, the employers and trade associations are resisting the new regulation. ZPiP (the employers and trade association) are outraged as a hourly wage rate can’t be defined generally, because it depends on the type of the operation performed. The employers association Lewiatan said the new regulation means a serious intrusion in the economic fundamental right of free enterprise.

The PiS government in contrast argues that the regulation is an appropriate tool to put pressure on employers to pay their employees on the basis of regular work contracts. This will also contribute to fair competition between companies.

Source: Wirtschaftsmarkt Polen, February 2016