Hire in Poland through our Employer of Record (EOR)

An Employer of Record (EOR) is a third-party organization that takes on the legal and administrative responsibilities of employing workers on behalf of another company. This arrangement allows businesses to hire employees in countries where they don't have a legal entity, effectively expanding their global reach without the need to establish a local subsidiary.

For Poland, an EOR can be particularly useful due to the country's complex labor laws, tax regulations, and administrative requirements. As Poland continues to grow as an attractive destination for international businesses, EORs provide a valuable service by navigating the intricacies of Polish employment regulations and ensuring compliance with local laws.

How Does EOR Work?

An EOR operates by becoming the legal employer of record for workers in Poland while the client company maintains day-to-day management and operational control. The process typically involves the following steps:

1. The client company selects candidates for employment in Poland.
2. The EOR handles all legal paperwork, including employment contracts and tax registrations.
3. The EOR manages payroll, benefits administration, and tax withholdings in compliance with Polish law.
4. The client company directs the employees' work activities and manages their performance.
5. The EOR ensures ongoing compliance with Polish labor laws, including handling any employment-related issues or disputes.

Benefits of Using an EOR

Utilizing an EOR in Poland offers several advantages for international companies:

1. Rapid Market Entry: EORs allow businesses to quickly establish a presence in Poland without the need to set up a legal entity, saving time and resources.

2. Compliance Assurance: EORs stay up-to-date with Poland's evolving labor laws and regulations, ensuring that client companies remain compliant and avoid potential legal issues.

3. Risk Mitigation: By taking on the legal responsibilities of employment, EORs help mitigate risks associated with non-compliance or misclassification of workers.

4. Cost-Effectiveness: EORs can often provide more cost-effective solutions for companies looking to hire a small number of employees in Poland, as opposed to establishing and maintaining a local subsidiary.

5. Flexibility: EORs offer scalability, allowing companies to easily adjust their workforce in Poland based on business needs without the complexities of managing a local entity.

6. Local Expertise: EORs possess in-depth knowledge of Polish employment practices, cultural norms, and business etiquette, which can be invaluable for foreign companies entering the market.

7. Focus on Core Business: By outsourcing administrative and legal responsibilities to an EOR, companies can concentrate on their core business activities and strategic goals in the Polish market.

In conclusion, an Employer of Record service can be a valuable tool for companies looking to expand into Poland, offering a streamlined approach to hiring and managing employees while ensuring compliance with local regulations.

Poland's employment landscape is characterized by a skilled workforce, an aging population, and a growing service sector. The country has seen an increase in immigration, particularly from Ukraine, which has helped address labor shortages in certain industries. Poland's workforce is known for its strong work ethic and high level of education, with a significant percentage of college graduates. The country faces challenges related to its aging population, but also benefits from a robust higher education system and a growing number of skilled workers entering the labor market.

Overview of Labor Laws

Poland's labor laws are designed to protect workers' rights while maintaining a balance with employer needs. Key aspects of Polish labor law include:

• Maximum working hours: Generally limited to 8 hours per day and 40 hours per week
• Minimum wage: Set annually by the government
• Paid leave: Employees are entitled to a minimum of 20 days of paid annual leave
• Maternity leave: 20 weeks of paid maternity leave, with the option to extend
• Employment contracts: Must be in writing and specify terms of employment
• Termination: Specific procedures must be followed for lawful termination

Cultural Considerations

When hiring in Poland, it's important to be aware of certain cultural nuances:

• Work ethic: Polish workers are known for their strong work ethic and dedication
• Communication: Direct communication is valued, but maintaining a level of formality is important
• Hierarchy: Traditional workplaces may have more hierarchical structures, though this is changing
• Work-life balance: While hard work is valued, there's growing emphasis on work-life balance
• Socializing: Building personal connections with colleagues is important in Polish work culture
• Vacation time: Longer vacations, especially during summer, are common and valued

Challenges of Direct Hiring

Direct hiring in Poland can present several challenges for foreign companies:

1. Language barrier: While English proficiency is increasing, many legal documents and official processes are in Polish

2. Complex labor laws: Navigating Poland's labor laws can be difficult without local expertise

3. Administrative burden: Employers must handle various administrative tasks, including social security contributions and tax withholding

4. Cultural differences: Understanding and adapting to Polish work culture can be challenging for foreign companies

5. Compliance risks: Ensuring full compliance with local regulations can be complex and time-consuming

6. Recruitment process: Finding and attracting top talent may require local knowledge and networks

7. Changing regulations: Keeping up with evolving labor laws and regulations can be challenging for foreign employers

To overcome these challenges, many companies choose to partner with an Employer of Record (EOR) service like Rivermate. An EOR can handle the complexities of local employment laws, payroll, and compliance, allowing companies to focus on their core business while expanding into the Polish market.

Poland's payroll and tax system is comprehensive, encompassing various contributions from both employers and employees. This system ensures social security coverage, healthcare provisions, and other benefits for workers while maintaining a stable economic environment. Understanding the intricacies of payroll and taxes in Poland is crucial for both employers and employees to ensure compliance with local regulations and to manage financial expectations effectively.

Employer Contributions

Employers in Poland are responsible for several significant contributions to support their employees and the broader social welfare system:

1. Social Security Contributions:

   • Pension Insurance: 9.76% of the employee's gross salary
   • Disability Insurance: 6.5% of the employee's gross salary
   • Accident Insurance: Varies based on industry and risk level, averaging around 1.67%

2. Labor Fund: 2.45% of the employee's gross salary

3. Guaranteed Employee Benefits Fund: 0.1% of the employee's gross salary

4. Income Tax Withholding: Employers must withhold income tax from employee wages according to the progressive tax system. The withheld taxes must be paid to the tax office by the 20th of the following month.

5. Payment Deadlines: Social Security and Labor Fund contributions are due to the Social Insurance Institution (ZUS) by the 15th of the following month.

It's important for employers to stay updated on any changes to these rates and regulations by regularly checking the Social Insurance Institution (ZUS) and Polish Ministry of Finance websites.

Employee Contributions

Employees in Poland also contribute to various social security funds and are subject to income tax:

1. Social Security Contributions:

   • Pension Insurance: 9.76% of gross salary
   • Disability Insurance: 1.5% of gross salary
   • Sickness Insurance: 2.45% of gross salary

2. Income Tax: Poland uses a progressive income tax system. The rates and brackets are set by the Polish Ministry of Finance and can change annually. Employers withhold these taxes directly from employee paychecks based on provided tax tables.

3. Tax-Free Allowance: Employees receive a small monthly tax-free allowance, which helps to reduce their overall tax burden.

It's worth noting that the total social security contributions for employees are capped at a certain annual income threshold. Once an employee's cumulative earnings for the year reach this threshold, no further social security contributions are required for the remainder of the year.

Both employers and employees should be aware that these rates and regulations can change. It's advisable to consult with tax professionals or refer to official government sources for the most up-to-date and accurate information regarding payroll and taxes in Poland.

Poland offers a comprehensive set of employee benefits, combining mandatory provisions with optional perks that enhance the overall employment package. As an Employer of Record (EOR), Rivermate expertly manages these benefits, ensuring compliance with Polish labor laws while helping companies attract and retain top talent. By handling the complexities of benefit administration, an EOR allows businesses to focus on their core operations while providing employees with a robust and competitive benefits package.

Mandatory Benefits

Polish law requires employers to provide several essential benefits to their employees:

• Social Insurance, including:
  • Pension Insurance
  • Disability Insurance
  • Sickness Insurance
  • Work Accident Insurance
• Employee Capital Plans (PPK)
• Occupational Health and Safety measures:
  • Mandatory medical examinations
  • Occupational Safety and Health Training
• Paid Time Off:
  • Sick Leave
  • Holiday Entitlement (20-26 days per year)

Optional Benefits

To enhance their employment offerings, Polish employers can provide various additional benefits:

• Supplementary Pension Contributions
• Employee Pension Plans (PPE)
• Private Medical Insurance
• Life Insurance
• Employee Assistance Programs (EAPs)
• Flexible Working Arrangements
• Extended Paid Parental Leave
• Company Social Benefits Fund (ZFŚS)
• Gym Memberships
• Educational Assistance
• Company Car or Car Allowance

These optional benefits can significantly improve employee satisfaction, productivity, and loyalty, making them valuable tools for attracting and retaining skilled workers in the competitive Polish job market.

The process of termination and offboarding in Poland is governed by specific regulations that aim to protect both employees and employers. Understanding these procedures is crucial for companies operating in the Polish market.

Termination Process

In Poland, employers must have valid reasons to terminate an employment contract. These reasons can be related to the employee (such as misconduct or loss of necessary skills), the employer (like organizational changes), or external factors (such as company liquidation).

The notice period required for termination depends on the type of contract and length of employment:

• For indefinite-term contracts:

  • Less than 6 months of employment: 2 weeks' notice
  • 6 months to 3 years: 1 month's notice
  • More than 3 years: 3 months' notice

• Fixed-term contracts should have specific termination terms outlined in the initial agreement.

• Trial periods typically last up to 3 months and have shorter notice periods.

Employers must provide written justification for dismissals, especially when related to employee conduct or performance.

Severance Pay

Severance pay is mandatory in certain situations, particularly when termination is due to economic factors or organizational changes. The amount of severance pay depends on the employee's length of service with the company.

Special Considerations

Some employees, such as those who are pregnant or members of trade unions, have additional protections against termination. In cases of collective redundancies, employers are required to consult with trade unions.

Offboarding Process

The offboarding process in Poland typically involves the following steps:

1. Formal communication of termination
2. Completion of necessary paperwork
3. Return of company property
4. Knowledge transfer
5. Final paycheck and benefits settlement
6. Exit interview (optional but recommended)

Conclusion

Navigating the termination and offboarding process in Poland requires careful attention to legal requirements and employee rights. By following these procedures, companies can ensure compliance with Polish labor laws and maintain positive relationships with departing employees.

Poland, a member of the European Union, has become an increasingly attractive destination for foreign workers. The country's growing economy and diverse job market have opened up opportunities for international talent across various sectors. However, like many countries, Poland has specific visa and work permit requirements for foreign nationals seeking employment within its borders.

Visa Requirements

EU/EEA citizens and Swiss nationals:

• Do not need a visa to enter or work in Poland
• Can stay and work freely for up to 3 months
• Must register their stay if planning to remain longer than 3 months

Non-EU/EEA citizens:

• Generally require a visa to enter Poland
• Common visa types include Schengen visas (for short stays) and national visas (for longer stays)
• Must obtain a work permit in addition to their visa for employment purposes

Work Permit Process

1. Job offer: The employer must first extend a job offer to the foreign worker.

2. Labor market test: In most cases, the employer must prove that no suitable Polish or EU candidate is available for the position.

3. Work permit application: The employer applies for a work permit on behalf of the foreign worker.

4. Visa application: Once the work permit is approved, the foreign worker can apply for the appropriate visa at a Polish embassy or consulate in their home country.

5. Residence permit: For stays longer than 3 months, foreign workers must apply for a temporary residence permit after arriving in Poland.

Important Considerations

• Processing times: Work permit and visa applications can take several weeks to several months, depending on the circumstances.
• Document requirements: Applicants should be prepared to provide various documents, including a valid passport, proof of qualifications, and a clean criminal record.
• Language: While not always required, knowledge of Polish can be beneficial for both the application process and daily life in Poland.

By understanding these visa and work permit requirements, foreign workers can better navigate the process of legally working in Poland. It's always advisable to consult with the Polish embassy or a qualified immigration specialist for the most up-to-date and personalized information.