8 October 2025

National Labor Inspectorate – new permissions, how will it affect B2B?

Starting January 1st, 2026, an amendment to the authorization will allow the National Labor Inspectorate (in Poland: PIP) to reclassify self-employment (often referred to as B2B) as an employment relationship, which includes contracts of mandate. This draft amendment has now been added to the legislative agenda.

The purpose of introducing these regulations is to enable the National Labor Inspectorate to determine (by administrative decision) an employment relationship under a civil law contract (both B2B and contracts of mandate) if the conditions under which the civil law contract is performed reflect the nature of an employment contract. Importantly, such a decision will have an immediate effect, and an appeal against such a decision will not suspend its enforceability.

As a reminder, civil law contracts are characterized by greater flexibility (for both employees and employers) and allow for more favorable taxation and contribution treatment of income from work performed for a contractor (employer). The amendment to the authorizations of the National Labor Inspectorate (PIP) stems from the milestones adopted in the National Recovery Plan.

Recognizing a Civil Law Contract as an Employment Relationship

It is important to emphasize that while the introduction of these new rights aims to combat various forms of contract abuse, the consequences of reclassifying these rights could be substantial. One major concern is the potential tax implications associated with this decision, especially regarding Value Added Tax (VAT), Social Insurance Institution (ZUS), Personal Income Tax (PIT), and Corporate Income Tax (CIT).

In practice, this may mean that when reclassifying a B2B contract as an employment contract, it will be necessary to calculate and pay outstanding Social Insurance Institution (ZUS) contributions and PIT advances, and to amend tax returns (on the employer’s side), as well as to zero out the tax return and submit a new (correct) tax return (on the employee’s side).

The approach taken by tax authorities when employers settle VAT on invoices issued by self-employed workers is also a concern. There is a risk that such invoices will be treated by the tax office as so-called “supplementary tax” (“supplementary tax”). Blank invoices will result in the employer not being entitled to a deduction. Furthermore, there is a risk that the tax authority itself may not be willing to refund the taxpayer (self-employed person) the VAT paid.

Potential tax arrears may also result in interest, and it should be remembered that retroactive corrections can cover up to five tax years. Furthermore, the Social Insurance Institution (ZUS) may also demand payment of its dues (because ZUS contributions for civil law contracts are often lower than for employment contracts).

National Labor Inspectorate – Key Changes

The key changes included in the amended regulations include:

• granting the National Labor Inspectorate (PIP) the authority to issue administrative decisions on the conversion of improperly concluded civil law contracts into employment contracts;
• introducing the possibility of conducting remote inspections by the PIP;
• at least doubling the maximum fine that the PIP can impose in fine proceedings;
• introducing the obligation for the PIP to prepare annual and multi-year action plans for targeted inspections based on risk analysis;
• enabling data exchange between the National Labor Inspectorate, the Social Insurance Institution (ZUS), and the National Revenue Administration for inspection purposes.

What to Look for in the Case of Self-Employed and Contractors

While the proposal to amend the PIP’s powers is in draft form and has been added to the legislative agenda, it is time to consider any potential risks associated with this.

Even before the regulations come into force, you can prepare appropriately by conducting an audit to determine whether your company has any B2B contracts or mandate agreements that could potentially be reclassified as employment contracts. In the case of civil law contracts, they must demonstrate the independence of a self-employed or contractor-based employee. In this context, here are some examples of characteristics that an employee’s employment should demonstrate:

• fixed working hours (e.g., 9 a.m. to 5 p.m.) instead of flexibility in task performance,
• required office attendance, no remote work option,
• fixed work location,
• time tracking,
• reporting work progress to the supervisor,
• assignment of specific tasks by the supervisor,
• working exclusively for a single entity (employer),
• using equipment provided by the employer,
• performing identical tasks as before the transition (from full-time to B2B),
• inability to use subcontractors,
• incorrect contractual provisions (e.g. referring to “employee”).

In light of the above, there is no single correct recipe for avoiding the risks associated with the amendment of PIP entitlements. However, there is nothing to prevent you from preparing for the new regulations now and avoiding potential negative effects in the future.