Minimum wage with regard to mandates and provision of services
If you hire an employee on mandate contract or work carried out under a contract for the provision of services, you should know that, as from 2017, the new rules entered into force on the remuneration for these services. Amendments include in particular the introduction of a minimum hourly wage for work e.g. contract of mandate.
What is the minimum wage rate?
From 1 January 2017 the minimum hourly rate amounts to PLN 13 for working on specific mandate contracts and service contracts, including the self-employed.
Minimum hourly rate depends on the minimum wage established annually (i.e. minimum hourly rate will increase at a rate equal to the increase in minimum wage determined for employees). From 1 January 2018 the minimum wage amounts to PLN 2100, the minimum hourly rate for certain civil law contracts is in accordance with the provisions of the Act - PLN 13,70 per hour. In subsequent years, this rate will depend on the increase in the minimum wage. (hourly rate, daily rate or e.g. weekly)
To whom do these rules apply?
The hourly rate applies not only to those working under mandate contracts but also self-employed, who provide services to the companies. The minimum hourly rate is intended to apply to all contracts, regardless of the method of determining pay (hourly, daily or weekly rate)
To whom the hourly minimum wage is not applicable?
The minimum rate will not apply to, inter alia, contractors who individually decide on the place and time of execution or service and shall have only a commission payment. Certain care contracts - e.g. concluded in the course of their home assistance, agreements relating to custody of the child in foster care or care for a group of persons on trips that last longer than one day have been excluded from the obligation.
How will the rate be established?
Each year the minimum rate will be consulted and announced officially by 15 September. The amount will be adjusted each year on the indicator resulting from dividing the amount of the minimum wage set for the following year by the amount of the minimum wage in force in the year in which the negotiations are being conducted and rounded up to full grosz.
Protection of employees
Legislation prohibits to renounce the right to the minimum pay or transfer it to another person. Payment must be made in monetary form. The new rules impose the obligation to pay the contractor compensation in the amount resulting from the minimum hourly wage at regular intervals, in case of contracts concluded for more than 1 month - at least once a month.
Remember about the obligation to confirm in documents the number of hours of mandate or the provision of services. Method of confirmation of the hours worked should be established in the contract. If not, the person receiving the order or providing services should submit in writing, electronic form or documents information on number of hours of execution or the provision of services, preceding the time of payment.
The contractor will be required to store documents confirming the number of hours worked for 3 years.
Breaking the rules concerning the minimum hourly wage may result in a penalty ranging from PLN 1000 to PLN 30,000. The right to check compliance with the regulations has the National Labour Inspectorate.
Transitional provisions allow in case of contracts signed before 1 September 2016, to carry out negotiations to amend the remuneration or to terminate the contract due to the lack of possibility of renegotiation, and in some cases the termination of contract, in view of the higher costs resulting from the introduction of a minimum hourly wage rate, which could result in a loss of profitability and pose a threat to the implementation of agreements.
Please note that since January 2017 there have been new rules concerning minimum wage for new staff on full-time contracts. So far, an employee in the first year of work must have received at least 80 per cent of the minimum wage. After amendment, all workers - irrespective of length of service - will receive the minimum salary in full amount.
See the detailed explanations on the minimum rate on MRPIPS.
- Act of 10 October 2002 on minimum wage for work
- Regulation of the Council of Ministers of 9 September 2016 on the level of minimum wage for work in 2017