Employee benefits in Poland: All you need to know

Poland is home to a growing collection of professionals with global experience, and multilingual workers open to global and remote work roles. The Polish workforce remains one of the best educated in Europe and, likewise, one of the most skilled. These are coveted characteristics which have attracted so many multinational companies to actively seek talent here (particularly in the strong local IT and engineering sectors).

Before you expand your hiring horizons to Poland, you must consider all relevant local legal requirements, especially those relating to regulatory compliance and employee benefits.

We want to make it easy to understand your obligations as an employer of Polish talent. As an experienced employer of record with entities all over the world, Remote knows that managing a competitive and compliant benefits package across multiple countries (including Poland) can be simple, inexpensive, and scalable.

In this guide to benefits for Polish workers, we’ll explain the mandatory benefits you must provide as well as additional perks you can offer to give your business an edge in the local market. We’ll cover the following key areas:

• Who is entitled to benefits in Poland?

• Statutory and common employee benefits

• Supplemental benefits to consider for Polish employees

• How to set up and manage benefits for international employees

Who is entitled to employee benefits in Poland

Polish employees have a collection of minimum employment rights under local labor laws. On the other hand, independent contractors are not covered by most employment-related laws. They aren’t entitled to the same benefits (including basic provisions like annual or sick leave) and they have to pay their own taxes.

You must make sure you classify your employment relationship with new hires correctly. If you mistakenly employ someone as a contractor when they are deemed under local laws to be an employee, you may later be held liable for extra costs, including paying back:

• Unpaid taxation

• Unpaid statutory benefits

• Holidays and leave entitlements

You even place any IP developed by the worker at risk, opening up complexity around ownership.

Regardless of whether you view an individual as an employee or a contractor, Polish legislators will make the only determination that matters. If you’re found to have an employee relationship and you’ve neglected to provide statutory benefits, you’ll open your company up to the serious risks of misclassification.

(For more detailed information about understanding this concept, be sure to read our dedicated guide to misclassification.)

Benefits for Polish contractors

We strongly urge international employers to consider offering a benefits package to contractors to maintain equity with employees. Just because these entitlements aren’t mandated in Poland doesn’t mean you can’t provide benefits to contractors because of their employment status alone.

If you value your contractors, benefits can build strong trust and connection with your business, especially in a remote context. You do still need to be careful of triggering permanent establishment or misclassification dangers with the type of benefits you provide.

Value-based benefits like paid time off, flexible working hours, and parental leave provisions can often keep you on the safe side of this legislation (more on this in our guide to offering benefits to international contractors).

An employer of record (EOR) like Remote should be able to give you more specific advice to minimize associated risks according to the employment legislation of Poland (or any other nation).

Statutory and common employee benefits

Statutory benefits, also known as mandatory benefits, are entitlements that employers are obligated by law to provide to their employees. Common examples include benefits like paid annual leave, parental leave, worker's compensation insurance, and paid sick leave.

Family benefits, social assistance payments, and unemployment compensation are all part of Poland's social assistance system. The Polish social security system covers virtually all citizens in full-time employment, such as employees, self-employed individuals, and their family members.

Employees are subject to pension, disability, health, and accident insurance under the Act on the social insurance system, which regulates principles of social insurance coverage and how they should be established. The employer and the employee contribute different amounts to a defined contribution plan. The employer, on the other hand, is responsible for calculating the amount of the payment to Social Insurance and deducting it from the employee's pay. The employer is also liable for the timely transfer of contributions to the Social Insurance Agency.

An employee is entitled to sickness benefits, maternity benefits, compensation benefits, and a funeral benefit, as well as damages in the event of bodily injury caused by an on-the-job accident, based on contributions made to social insurance. Employees are also entitled to benefit from the use of public health care facilities.

Annual leave in Poland

The duration of holiday leave varies depending on the number of years worked. Holiday leave may be broken down into smaller blocks if the employee chooses this approach. The employee is entitled to time off from work on Sundays and public holidays, in addition to vacation leave.

A full-time employee is entitled to 20 days of paid annual leave each year if they have been with the same employer for less than ten years. An employee is entitled to 26 days of paid annual leave after being employed with the same company for more than 10 years. Unused vacation days may be carried over to the following year, but they must be taken by September 30 of the next year. It is against the law to compensate workers for not taking their vacations, with the exception of termination of employment.

Maternity and parental leave

Female employees are entitled to 20 weeks of maternity leave if they give birth to a single child. This time is extended proportionally in the event of having more than one child. The pregnant employee can take no more than six weeks of maternity leave before the due date. Any of the parents may receive an additional 32-week parental leave (for a total of a 52-week period). Generally, the parent on childbirth-related leave is entitled to 100% of their basic remuneration for the first six months and 60% for the second six months.

The following is a list of the minimum pregnancy leaves that employees are entitled to:

• 20 weeks for the birth/adoption of a single child

• 31 weeks for two, 33 weeks for three, and 35 weeks for four children

• 37 weeks for five or more children

Sickness and disability leave

The employee is entitled to 80% of their remuneration if unable to work due to an illness. There is a similar provision for isolation caused by a contagious disease that lasts more than 33 days in the year, and for employees who are 50 years old or older, when this lasts longer than 14 days in the year.

If an employee is unable to work due to an illness during pregnancy within the period specified, she is entitled to 100% of her earnings. If the period of disability from work lasts longer, the employee is eligible for Social Insurance Agency sickness benefits.

In a calendar year, a person suffering from a severe or a moderate degree of disability is entitled to an extra ten days off work. The right to work is given after one year of employment and the acquisition of one of the above degrees of disability.

Pension plans and retirement contributions

As of 2019, all employers in Poland must offer a pension. The Employee Capital Plan (PPK) is new legislation put forward by the Polish government to help individuals save more money over time.

Employees who are 18 to 55 years old will be enrolled automatically and will participate unless they opt out (opt-out forms must be submitted in hard copy.) The employer (minimum 1.5% of gross salary), the employee (minimum 2% of gross salary), and the state (welcome package of 250 PLN and an annual subsidy of 240 PLM) contribute to PPK.

We urge global employers to consider providing an additional retirement pension plan as an extra benefit to Polish employees. This provision could help you maintain equity with other global employees, and signal your care and commitment to your team. A benefit like this may just be enough to urge a top shelf candidate to join your business over a competitor.

Minimum wage and overtime

In Poland, there is a government-mandated minimum wage. Every employee in Poland should be compensated at this pay rate, at the least. In Poland, the national minimum wage is PLN3,490 per month and PLN22.80 per hour. Employers who do not pay the Polish minimum wage may face repercussions from the Polish government.

Salaries are paid on a monthly basis, and employees must receive their pay by the tenth of the following month. In Poland, the normal work week is no more than 40 hours per week and 8 hours each day. If work time restrictions are enacted, overtime pay is required.

The maximum number of hours worked in a week is 48; yearly overtime can't exceed 150 hours. Overtime is owed after working the maximum of 45 hours in one week, and it is paid at the statutory rate of 200% percent of the employees' regular pay if the overtime is worked at night, on Sundays, or non-working days. If overtime is worked at any other time, employees are entitled to 150% of their regular salary.

Insurances

In Poland, as in other EU countries, a compulsory insurance package includes a pension (PPK), social insurance, and occupational medicine. In Poland, things like private medical insurance, life insurance, and business travel insurance are all supplementary employee benefits, meaning employers are under no obligation to offer these provisions.

Indeed, this presents an opportunity for forward-thinking employers. By adding these supplemental benefits to the compensation package of Polish employees, you can immediately separate your company from competitors who choose to offer more basic provisions.

Want to see a full breakdown of employment costs for new hires in Poland? Check out our free Employee Cost Calculator tool.

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Additional benefits to consider for Polish employees

Private Health Insurance

While the Polish government provides basic health care to its citizens, you have the option to offer supplemental health insurance. We strongly advise international employers to consider this benefit to give your employees access to more premium coverage.

Private insurance inclusions can range from dental to optical coverage as well as other specialized private insurance that the public sector may be too limited to comprehensively include. This will help employees pay for additional medical care such as emergency room visits, hospital stays, outpatient surgery, and other potential extra costs.

Indeed, offering health cover, or other additional insurance benefits (like dental insurance, vision insurance, and life insurance), can be such an effective way to build trust with new hires and separate your offer from that of a competitor.

Bonuses

Employee benefits plans in Poland sometimes include a provision for an annual bonus. Some companies choose to provide employees with a bonus payment at the end of the year as a reward for solid performance, although there is definitely no legal requirement or in-market expectation in this regard. Ultimately, the distribution of bonuses is at your discretion.

While we advocate for additional benefits to demonstrate your commitment and care for your team, sometimes monetary rewards aren’t as motivating or satisfying for your team. Value-based benefits (especially perks that facilitate better work-life balance) can be more inexpensive for the employer, and more valued by the employee.

Home office stipend

Employees are not only interested in traditional benefits. Many Polish workers are actively seeking roles with companies that embrace the concept of work-life balance and enable flexible working from home.

One way to reinforce that culture is by offering specific remote-work benefits like a home office stipend. This is a relatively inexpensive benefit that offers significant increases in employee efficiency and productivity.

Allowances to compensate for the likely increased cost of internet, electricity and phone contracts will also help to provide specific support for Polish team members working from home.

Flexibility in work hours

Remote work has also shown that the regular nine-to-five grind can be replaced by a bit more flexibility.

The provision of flexible work hours in a contract adds value towards work-life balance, which again is continuously changing alongside remote and hybrid work environments.

Personal development

Employees want their employer to contribute to their growth. Affordable perks like investing in personal development help workers learn new skills. These programs also improve employee retention while showing your team that you care about their professional advancement.

Fitness membershipsRemote employees who do not have access to an on-site gym still want to stay healthy. A small provision to help them pay for a fitness membership will go a long way to making your employees feel valued. For remote teams, memberships for online classes like yoga make attractive options.

Providing cost-effective benefits packages to remote workers

You can tweak your benefits package to suit the nature of the work required from your remote workers to include benefits such as more paid time off, or even assistance with meals, travel expenses.

There are also more traditional approaches like stock options or profit-sharing, which lend themselves well to responsibilities with high ownership and impact.

The key is to spend less on vanity perks and actually focus on benefits that let employees live the lives they want — which is made possible by their situation as remote professionals. You can read our guide to affordable perks small businesses can offer remote teams to learn more.

How to set up and manage benefits for international employees

Complex international hiring as well as managing payment and benefits for global workers is a challenging task because the processes involved are incredibly difficult to manage internally.

You need a solution that allows you to stay compliant with all of the local labor laws in each country of operation.

Instead of building a fully-owned local legal entity with a specialist HR function in each new market, an employer of record (EOR) provides a cost-effective, fast, and secure alternative to help you grow your team across borders.

When should you use an employer of record?

If you don’t have an established process to manage the complicated parts of scaling global hiring in Poland, or in any other country – an EOR like Remote will give you immediate relief.

Remote’s EOR service gives you the advantage of dedicated local employment experts that can offer the insight you need to create a strong benefits package, a compliant employment contract, and a competitive offer to your candidate.

Remote manages the complicated parts of international employment. The combination of Remote’s simple software hub, and our team of global HR experts combine to organize all the tiny details of managing a distributed team.

Our team of global employment experts handles the complexities of running your global HR operations in the backend and our software puts everything in one dashboard where you can:

• Manage payroll and time off

• Handle local employment taxes

• Stay compliant with statutory benefits

• Offer competitive and equitable global compensation packages

• Scale your global team faster

You can learn more about how Remote simplifies international hiring so you can scale your distributed team faster or jump to our Poland country hiring guide for more specific employment information.

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