The PIP reform in practice: companies are receiving worrying letters
Following the entry into force of the reform extending labour inspector authority to check whether civil-law contracts are in fact being used as a substitute for permanent employment, regional inspectorates have begun sending letters to companies regarding the contracts in force at their premises. In these letters, they urge companies to self-assess and voluntarily convert contracts for specific tasks, B2B contracts and other civil-law contracts into employment contracts if the manner in which they are performed meets the criteria to be an employment relationship.
The recipients were identified on the basis of data from the Social Insurance Institution (ZUS) and the National Revenue Administration (KAS) databases as entities utilising civil-law contracts. The letter also requests feedback – confirmation that an analysis has been done and, in the event of conversions, the number of contracts that have been amended.
A voluntary change in the form of employment is intended to help avoid sanctions from the National Labour Inspectorate (PIP) and disputes in law over the establishment of an employment relationship – the new regulations provide for a 12-month amnesty period during which employers converting contracts are exempt from liability for an offence.
However, the letter is neither a formal summons nor an administrative decision, so companies are under no obligation in law to reply, though experts advise against disregarding it. Doubt remains regarding the criteria for selecting companies and the scope of the amnesty, which does not eliminate the risk of social security contributions, tax liability, or employee claims.