How to hire and pay independent contractors in Poland

Poland ranks high on factors such as education and standard of living. The country’s minimum wages are also among the lowest in Europe. These factors indicate that Poland is one of the best European countries to hire workers from.

If your company wants to hire independent contractors in Poland, you have to understand local employment laws and compliance practices. You also have to be aware of potential risks such as the misclassification of employees. 

You don’t have to stress, though. In this article, we’ll explain all you need to know about how to hire and pay independent contractors in Poland. We’ll also include information about Polish labor laws, tax requirements, and how to avoid misclassification. 

What are the labor laws in Poland?

Polish law clearly differentiates between employees and independent contractors. In Poland, companies that misclassify their workers face penalties and may get banned from working in the country. So, it's essential to classify your workers correctly and ensure compliance with labor laws.

Poland allows indefinite and fixed-term employment contracts based on the nature of the work and the project's duration. You can hire workers under probationary periods too. However, this period cannot be longer than three months. 

Regardless of the employment type you're offering, having a written agreement clarifying the terms of employment is essential.

The Polish Labor Code sets out employment law in Poland. It covers the rights and obligations of the employee and the employer, remuneration for work, working conditions, holidays, occupational health and safety, notice period, and protection from termination, among other laws.

Here’s a brief overview of labor laws concerning Polish workers: 

• Minimum wage: The minimum wage in Poland is 3,490 PLN ($829) per month.

• Payroll cycle: All payments are made in monthly installments. 

• Right to work: If you hire non-Polish residents, onboarding could take a few extra days. These individuals have to undergo a Right to Work Assessment if applicable. 

• Maternity leave: New mothers get up to 52 weeks of maternity leave in Poland.

• Probation periods: The maximum duration of a probation period in Poland is three months. Companies in the country can have “trial contracts” with an expiry date of three months. During this time, the employer can judge a worker's performance and eventually offer them an indefinite or fixed-term contract. 

• Severance pay: Employers also have to pay severance in Poland, especially when they initiate the termination. 

• Bereavement Leave: Employees are entitled to two days of bereavement leave in case of the death of a parent, child, or spouse. 

Freelance workers or independent contractors operate under civil law agreements that fall outside Polish labor laws. Independent contractors are not covered under the provisions of the Labor Code and are not entitled to the above benefits.

Tax and compliance practices for hiring independent contractors from Poland

Independent contractors in Poland are responsible for filing and paying their taxes and social security contributions.

If you're a US employer, the IRS has some requirements for hiring contractors from abroad. All your contractors must fill out Form W-8 BEN, a legal form used by the IRS to determine a non-resident's foreign status for taxation purposes. You also may be required to fill out Form 1096 to help the IRS keep track of your payments to international contractors. You can read our article on tax compliance for US companies to learn more about this. 

Keeping track of the tax requirements may feel overwhelming. Remote can make your life easier by generating relevant forms during tax season. New contractors who are onboarded through Remote are prompted to download, fill, and upload the relevant tax forms — saving you time and making tax compliance simple. 

How do I convert an independent contractor in Poland to an employee?

If one or more of your contractors are doing an impressive job, you might consider converting your contractors into employees. It depends on whether you're ready to offer the additional benefits and comply with Polish labor laws. If your contractor is becoming an essential part of your team, it can be worth it. Once your highly skilled worker has been converted from a contractor to an employee, they can share in the company culture and make a larger impact on your business. It might even be more cost-effective in the long term.

Converting contractors into employees does have its challenges. You’ll have to draft a localized contract, offer benefits, and set up payroll. But, an international contractor management service like Remote can handle the process, and help you convert your contractors to employees, quickly and easily.

How do I pay an independent contractor in Poland?

When you’re hiring abroad, it’s important to make sure you pay your contractors, correctly and on time. You can pay Polish workers through bank transfer, or any digital payment method.

However, making international payments can be a hassle, especially if you're paying several contractors at once. Using these methods may also not be cost-efficient. Many online payment platforms offer high currency exchange rates or charge hefty transfer fees.

Remote's global payroll for distributed teams can take care of every aspect of paying contractors in Poland. There are no hidden fees involved. We can set up automated contractor payments, manage invoices, and help you create localized contracts that are fully compliant with Polish employment law.

What are the risks of misclassifying Polish independent contractors as employees?

When hiring independent contractors, companies sometimes fail to differentiate between a contractor and an employee, which could lead to misclassification risks.

Polish labor laws define employees and contractors differently.

Contractors enjoy more flexibility in scheduling their work hours and location, whereas employees get more benefits such as paid time off and insurance. Although you can still offer additional benefits to your contractors, that does not ultimately make them your employees. In fact, if you do decide to offer benefits, you still need to be careful about the dangers of misclassification or triggering permanent establishment. 

Here are some general differences between employees and independent contractors: 

• Employees have to work under the rules set by the employer, while contract workers have more freedom in their job. Contractors are self-employed and manage their own working hours and conditions.

• Employees are entitled to benefits and additional perks, while contractors usually do not get these incentives. 

• Employees typically use the organization's infrastructure while contractors have their own tools, equipment, workstations, etc.  

Misclassifying your workers in Poland could lead to legal issues, loss of your intellectual property rights, and heavy penalties. But, Remote offers a scalable, easy-to-use, and effective way to minimize misclassification risks. Our global contractor management platform can help you manage everything, from employee classification to tax regulations, and ensure you remain compliant with Polish legal guidelines. 

The best way to hire international contractors in Poland

It's a good idea to tap into Poland's highly educated and talented workforce by hiring independent contractors, as you're likely to find skilled professionals at affordable rates.

But what if you want to hire several contractors from Poland? You’ll have to spend a significant amount of time drafting contracts, onboarding contractors, setting up payments, and ensuring compliance with local labor laws. 

This can sound complicated, but it doesn’t have to be. With Remote, managing your contractors in Poland (and all over the world) becomes simple. Our contractor management platform hires international contractors on your behalf, leaving you free to focus on business growth. Remote can help you: 

• Manage all your contractors in one place

• Draft localized contracts compliant with labor laws

• Automate payments and pay global contractors quickly

• Stay compliant with Polish employment laws

Contact us to learn more about contractor management, or sign up and start onboarding contractors in Poland with Remote today!