Recently the Polish Social Insurance Institution (“ZUS”) has been empowered by law to the fight illegal transfer of employees between entrepreneurs which is used in order to save costs and avoid payment of insurance contributions on employees wages, this practice is commonly known under the name of “employee outsourcing”. ZUS will on one hand have the right to question the cases of such transfers under a new legal provision which became applicable on Tuesday, 13th June in Poland and presses companies to pay outstanding contributions. On the other hand, entrepreneurs fear that ZUS may misuse its power in this respect as the relevant provisions have been formulated vaguely and broadly rather favoring ZUS than entities being subject to expected inspections and controls. In particular these firms fear that ZUS will clamp down on unpaid insurance contributions from the past concerning remuneration of employees who were officially engaged by other employers. As a consequence, representatives of Polish Employers Unions and Confederations have recently addressed the Prime Minister to implement changes to the new law limiting ZUS’ power. ZUS is trying to cool concerns of entrepreneurs stating that the new law will only be used by ZUS to hinder the apparent transfer of employees to other companies to avoid payment of insurance contributions. This explanation does not satisfy concerns as to the question of whether the new law will also apply to transferred employees contracts concluded in the past or only to those to be concluded in the future and this seems to be an important issue. We must await where this row between Polish employers and ZUS will end and how the new provisions will be handled by ZUS in the future, only time will tell.
