Tackling abuse of the system, American Investor, Spring 2017

Tackling abuse of the system

A proposed new system may make it more difficult for legitimate employers to hire workers from abroad

Local authorities could refuse to accept a declaration by a Polish employer intending to hire foreigners if the employer’s intentions are suspicious.

In April 2016, the Ministry of Family, Labor and Social Policy began work on changing the rules for hiring foreigners in Poland. The reason for the changes is to implement the EU’s Seasonal Workers Directive (2014/36/EU).

To do this, the first draft of a bill amending the Act on Promotion of Employment and Labor Market Institutions of April 20, 2004, was published last year. Over the following months, the draft underwent numerous revisions. First the ministry proposed to eliminate the mechanism under which an employer could hire foreigners on the basis of a declaration of its intention, registered with the appropriate authorities. Then the authors changed their mind and decided to retain this mechanism, but with more restrictions. In March 2017 yet another version of the draft was submitted to the Council of Ministers for approval. Apart from changes in what is required for companies to hire foreigners, the latest version also introduces a new type of work permit: a seasonal worker permit.

Defining seasonal workers

Under the latest proposal, a seasonal worker permit would be required for a foreigner to perform seasonal work in Poland under a contract with an employer whose registered office or residence, or branch, establishment or other form of organized activity, is located in Poland. A seasonal worker permit would be issued for a fixed period of no longer than nine months within a calendar year, and for no longer than three consecutive years. The competent authority to issue such permit would be the starosta (the head of the county government).

The draft also provides that the types of employment actually constituting seasonal work will be specified in an executive regulation issued by the ministry, based on subclasses of activities under the Polish Classification of Activity (PKD).

Identifying abuses of the system

The occasion of implementing the Seasonal Workers Directive gives lawmakers an opportunity to address yet another problem with hiring of foreigners, not limited to seasonal workers. The authors of the draft say that one of purposes of the new regulations is to tighten the procedure for issuing permits to employ people from Armenia, Belarus, Georgia, Moldova, Russia and Ukraine, as it transpired that many people were fraudulently declaring their intention of hiring people from those countries, when their true intention was to earn a fee for arranging a legal basis for individuals from those countries to enter Poland.

At present there are no effective instruments for combating these abuses. The proposed remedy is to change the declaration system. The plan is that the declaration procedure would cover not only foreigners from the six countries indicated above, but all foreigners regardless of their country of origin. The starosta would continue to be the competent authority for administering the declaration system. The starosta would be empowered to refuse to register a declaration of intent to employ foreigners submitted by a prospective employer if the starosta has reasons to believe that the declaration was filed only as a pretence, the declaration would be used by the foreigner for some purpose other than performing work for the person filing the declaration, or the prospective employer fails to perform statutory obligations connected with its business or hiring.

More questions

It is difficult to assess what consequences might follow from the change proposed in the draft in the rules for performance of work on the basis of a declaration of the intention to hire a foreigner. But there is no doubt that apart from the positive effect of combating abuses, tightening the procedure would also generate additional formalities and could prolong the waiting time before foreigners obtain rights to work in Poland. 

When the parliament debates the proposed new regulations, it is nearly certain that new amendments will be introduced. The final effect of the new regulations is now difficult to predict. Therefore, anyone who hires foreigners or intends to hire foreigners should remain vigilant. The amendment is expected to be adopted soon, as Poland is already late with the new law. The deadline for transposition of the Seasonal Workers Directive was September 2016.

Published in: American Investor, Spring 2017