Amendment to the minimum remuneration act

On 5 August 2016 the President of the Republic of Poland signed an amendment to the act of 22 July 2016 on amendment to the act on minimum remuneration and to certain other acts (“Act”), which will enter into force as of 1 January 2017 (with some exceptions). Below we present the scope of the most significant changes resulting from the amendment.

The Act introduces a minimum hourly rate for persons performing work on the basis of contracts of mandate and service contracts (including self-employed). The amount of the hourly rate will be correlated with the amount of the annually determined minimum remuneration for work. The minimum remuneration for work in 2017 will be equal to PLN 2,000 gross.

If the amount of remuneration stipulated in the contract does not guarantee to contractors (service providers) remuneration for each hour of performance of the mandate (provision of services) in the amount at least equal to the minimum hourly rate, then the contractor or service provider will be entitled to the minimum rate remuneration. Moreover, if several persons accept a mandate (provide services) together, then each of such persons shall be entitled to the minimum rate remuneration. The contractor (service provider) cannot waive the right to remuneration in the amount of the minimum hourly rate. It will also be impossible to transfer the right to remuneration to another person.

The lawmaker has also introduced additional obligations concerning the wording of contracts of mandate (service contracts). From the beginning of the new year these contracts should contain provisions concerning the manner of confirmation of the number of hours necessary to perform the mandate or provide services. The lawmaker has also provided for detailed solutions in the scope of confirming the number of hours in the event the parties have failed to regulate this issue in the contract, as well as has determined the rules of storage of documents specifying the manner of confirming of the number of hours.

The provisions on minimum hourly remuneration will not apply in case of contracts of mandate (service contracts), in case of which the place and time of performance of the mandate (provision of services) is decided upon by the contractor (service provider), and the contractor (service provider) is only entitled to commission-based remuneration for performance of the mandate (provision of services).

Moreover, starting from 1 January 2017, the regulation allowing for payment of remuneration in the amount of 80% of the minimum remuneration during the first year of work for the benefit of employees who have taken up employment for the first time will cease to apply.

As mentioned above, the amendment enters into force on 1 January 2017, however the provisions defining the minimum hourly rate and specifying the manner of calculation thereof entered into force upon the Act being announced in the Official Journal of the Republic of Poland, i.e. on 18 August 2016.

Should you require more detailed explanations with respect to the above, please contact advocate Michał Chodkowski (e-mail: michal.chodkowski@laszczuk.pl).