We are in the middle of the process of working on the governmental draft of the Minimum Wages Act (hereinafter referred to as the “Draft”).[1] The Act is to implement into Polish law Directive (EU) 2022/2041 of the European Parliament and of the Council of 19 October 2022 on adequate minimum wages in the European Union (OJ L 275, 25.10.2022, p. 33, hereinafter as the “Directive”). Let us recall that the currently binding provisions at the statutory level were adopted in their original wording over 20 years ago.[2]

Considering the explanations of the EU legislator, the Directive aims to improve living and working conditions in the European Union by establishing a framework for the adequacy of statutory minimum wages, promotion of collective bargaining, and increasing workers’ effective access to the protection of their rights in the form of a minimum wage. Member States are required to adopt the measures necessary for its implementation by November 15, 2024.

Key changes

Due to the above, in August this year, a draft of statutory solutions in this area was published on the website of the Government Legislation Center. In comparison with the currently applicable regulations, the glossary of statutory definitions has been enriched with, among others, the concept of updating the minimum wage. It constitutes a verification of the amount of the minimum wage considering the so-called updating criteria, which include:

• purchasing power of the minimum wage, considering the cost of living,
• the general level of wages and their distribution,
• salary growth rate,
• long-term national productivity levels and their changes,
• the ratio of the minimum wage to the average salary in the national economy in a calendar year, announced by the President of the Central Statistical Office (GUS).

A solution regarding two dates for changing the minimum wage, depending on the forecast price index for the following year was kept (from January 1 or from January 1 and July 1, respectively). However, the update of the minimum wage based on the criteria mentioned would be made at least once every 4 years.

There is a change to be considered substantial, i.e., deciding that the basic salary of an employee employed full-time monthly should not be lower than the so-called minimum wage, which is the subject of annual negotiations within the Council for Social Dialogue. The authors of the draft explain that he meets social expectations in a situation where currently individual components of remuneration (such as functional supplements, bonuses, or awards) often constitute a supplement to the level of the minimum wage, thus losing their significance.

According to the currently applicable provisions regarding the minimum hourly rate, the payment of remuneration shall be made at least once a month. Meanwhile, according to the Draft, it has been specified that in case of contracts concluded for a period longer than one month, this payment shall be made immediately after its full amount has been determined but no later than within ten days of the following calendar month. Therefore, the regulation currently resulting from the Labor Code (Article 85 § 2) has been adopted concerning civil law contracts.

Additionally, it’s worth paying attention to the consequences of violating the rights related to remuneration for work, which, as emphasized in the justification of the Draft, constitute a deterring function.  The drafters decided to, respectively, increase the fines, extend the catalog of violations of rights, and introduce a new type of crime and offense, because:

• paying a person accepting a commission or providing services a remuneration lower than the applicable minimum hourly rate or failure to pay remuneration would be subject to a fine from 1,500 PLN to 45,000 PLN,
• an employer’s delay in paying remuneration for work will entitle the employee to interest for the period of delay, even if he has not suffered any damage and the delay was a result of circumstances for which the employer is not responsible,
• offenses against employee rights listed in Article 281 § 1 of the Labor Code will result in a fine of 1,500 PLN to 45,000 PLN (not from 1,000 PLN to 30,000 PLN as before), similarly, those mentioned in Article 282 § 1 of the Labor Code, the catalog of which has been extended to include payment of remuneration in an amount lower than the minimum wage, as well as failure to comply with occupational health and safety regulations or principles,
• a person obliged to pay remuneration for labor who fails to perform this obligation for at least three months will be subject to a fine, restriction of liberty, or imprisonment for up to 2 years (draft Article 218 § 1b of the Penal Code).

The current phase of the legislative process

According to the information from the website of the Government Legislation Centre, the Draft is currently at the stage of review. The Union of Entrepreneurs and Employers (in Polish: Związek Przedsiębiorców i Pracodawców) expressed its negative opinion, pointing out, among other things, the threat of further excessive increases in the minimum wage and the negative consequences for micro, small and medium-sized enterprises.[3] Similar disappointment was expressed on the website of the Polish Confederation Lewiatan.[4]

In consequence, the State Labor Inspectorate positively evaluates sanctions solutions and, additionally, as it results from the meeting of the Labor Law Team at the Council for Social Dialogue, it proposes changes to the Code of Procedure in Case of Petty Offenses in terms of increasing the fine in proceedings by police penalty orders.[5] Currently, however, no position regarding the content of the Draft has been published on the Government Legislation Center.

Considering that the content of the Draft was made available in August this year, and in addition, the deadline for the obligation to adopt the measures necessary to implement the Directive is approaching, the publicization of the topic can be expected soon. Taking the content of the proposed changes and their consequences for employers into consideration (for example, in the form of the need to update remuneration regulations or collective labor agreements or adjust labor contracts) concerns related to the risk of failure to meet the deadline set for Member States to implement regulations seem justified.

[1] The Draft of the Minimum Wages Act, https://legislacja.gov.pl/projekt/12388700/katalog/13077164#13077164, accessed September 18, 2024.

[2] The Minimum Wage Act of October 10, 2002 (Journal of Laws of 2020, item 2207, as amended).

[3] Union of Entrepreneurs and Employers (Związek Przedsiębiorców I Pracodawców), ZPP position on the act on minimum wage , https://zpp.net.pl/stanowisko-zpp-do-ustawy-o-minimalnym-wynagrodzenia-za-prace/ , accessed: September 18, 2024.

[4] Polish Confederation Lewiatan, Płaca minimalna. Rząd lekceważy dialog społeczny, https://lewiatan.org/placa-minimalna-rzad-lekcewazy-dialog-spoleczny/, accessed September 18, 2024.

[5] State Labor Inspectorate, Chief Labor Inspector on the draft act on minimum wages [in Polish: Główny Inspektor Pracy o projekcie ustawy o minimalnym wynagrodzeniu za pracę], https://www.pip.gov.pl/aktualnosci/glowny-inspektor-pracy-o-projekcie-ustawy-o-minimalnym-wynagrodzenia-za-prace , accessed: September 18, 2024.