No more undeclared work and paying under the table. The government, as part of the Polish Deal, has announced decisive actions

Norbert Ziętal

The provisions of the Polish Deal are intended to significantly reduce the phenomenon of undeclared work and paying “under the table”, which are the bane of employees in Poland, especially those employed in the smallest companies.

Working illegally in full or only in part (e.g. part-time employment and actually full-time work), or the payment of remuneration “under the table”, bypassing the insurance and tax system, is the bane of Polish employees. This applies especially to small companies in the catering, construction and transport industries.

Why? On the one hand, employees take the job as it is and agree to unfavorable conditions. Sometimes they consciously agree to higher wages “on hand” under the table, at the expense of insurance. Employers who offer undeclared work are unfair competition to companies that legally employ workers.

The solutions aimed at improving the situation of the employed workers were discussed at a press conference of the Ministry of Finance, the Social Insurance Institution and the National Labor Inspectorate.

– Currently, the tax system is not favorable to employees who do not agree to work illegally. They are often the weakest market participants who do not have a strong negotiating position towards the employer. As a result, they may be forced to accept unlawful offers that do not guarantee them security in the event of illness, starting a family or retirement. Even if this practice is detected by KAS, ZUS or the Labor Inspectorate, the employee may be afraid of the negative consequences of accepting the payment “under the table” – says Jan Sarnowski, deputy finance minister.

The gray economy loses not only the state budget, but also other honest companies, and above all the employee himself. No social security contributions are paid on hidden wages. And that means no right or lower benefits, pensions and pensions.

– The problem is all the more important as working illegally and paying under the table mainly affects people with low wages, working in micro and small enterprises. It is much more difficult for such people to work out a minimum pension, currently PLN 1250.88 – explains Gertruda Uścińska, president of ZUS.

The regulations in this area are to change from the new year.

– We want to completely reverse this unfavorable situation for employees. From the new year, it is not the employee who will bear the tax consequences of illegally employed or paying part of the salary “under the table”. The responsibility will be clearly transferred to the employer – adds Sarnowski.

The employer will pay tax on the undeclared wages or part of the wages paid under the table. He will also be assigned additional income in the amount of the minimum remuneration for work for each month of illegal employment, regardless of whether he actually paid the remuneration and in what amount.

However, in addition to tightening the regulations, there will also be incentives for companies. Including abolition for those who decide to stop using illegal employment from the new year.

– If an inspection is not initiated against the employer by the end of the year, the overdue tax with interest for the years 2021 and earlier will not be paid by the employee or the employer – Sarnowski assures.

About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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