Poland expands labor inspection powers to convert B2B contracts

New amendments to the Polish State Labor Inspection (PIP) Act have granted inspectors expanded powers to unilaterally convert B2B or civil law contracts into standard employment contracts through administrative decisions. Previously, inspectors had to refer such cases to court, a process that often took years.

Under the new regulations, which took effect in July, employers face increased financial risks. Fines for failing to rectify improper employment arrangements have doubled, rising from a maximum of 30,000 PLN to 60,000 PLN per contract. To avoid these penalties, employers can utilize a one-year amnesty period: if they voluntarily convert the problematic contracts into employment contracts within 12 months of the law's implementation, they will avoid financial liability.

Chief Labor Inspector Janusz Krasoń indicated that by 2027, the agency will move toward more systemic, proactive inspections rather than waiting for employee complaints. While the Ministry of Finance estimates approximately 160,000 people in Poland work under sham B2B arrangements, some employers are already resisting the new mandates, opting for legal disputes rather than complying with inspector orders.