Poland Overhauls B2B Contract Scrutiny with New Labor Law

A significant shift in Poland's labor law landscape is set to take effect on July 8, 2026, with the implementation of a new act amending the State Labor Inspectorate (PIP) law. This legislation, signed by the President on April 2, 2026, and published on April 7, introduces substantial changes to how B2B contracts will be scrutinized, potentially altering the risk profile for businesses operating under such arrangements. While the President referred the law to the Constitutional Tribunal, this review is ex-post facto and does not halt the implementation of the new regulations. Companies must therefore prepare for the changes without waiting for a judicial verdict. This reform is a key milestone in Poland's National Recovery Plan, aiming to combat the estimated annual budget losses exceeding 2 billion PLN attributed to fictitious civil law contracts. The core of the reform lies in four pillars. Firstly, labor inspectors will gain the authority to issue administrative decisions confirming the existence of an employment relationship, moving beyond the previous reliance on lengthy court proceedings. This process involves an initial order to rectify violations, followed by a decision if non-compliance persists, with an appeal to the labor court within 30 days. Secondly, a unified data system will be established, linking PIP, ZUS (Social Insurance Institution), and KAS (National Revenue Administration) to identify high-risk companies through risk analysis algorithms and data from the National e-Invoicing System. Thirdly, remote inspections will be facilitated through real-time audio-visual feeds and electronic document submission. Finally, sanctions are being toughened, with maximum fines for labor law infringements doubling to 60,000 PLN (or 90,000 PLN for repeat offenses), and inspector mandates increasing from 2,000 to 5,000 PLN. A mitigating factor is the introduction of individual interpretations from the Chief Labor Inspector, offering a form of protection against sanctions if a positive interpretation is obtained. The reform's focus is on identifying genuine employment relationships based on criteria such as personal performance, direction, place, and time of work, and remuneration.