Who is subject to a PIP inspection and what from it goes to ZUS

A wider range of inspected entities — B2B and one year back

Art. 13 pkt 1 of the Act on the National Labour Inspectorate, as worded after the reform, covers employers and — in the field of occupational health and safety, checks on the legality of employment and the conclusion of civil-law contracts in circumstances in which, under art. 22 § 1 k.p. of the Labour Code, an employment contract should have been concluded — also entrepreneurs who are not employers and other organisational units for which work is being performed, or was performed in the year preceding the day the inspection started, by natural persons, including persons carrying out business activity on their own account, regardless of the basis on which the work is performed.

This provision operates in three independent layers. B2B cooperation is covered by inspection expressly — the legislator named persons running a business on their own account. The inspection reaches one year back, counted from the day it starts, so it also covers people whose cooperation ended several months ago. Employer status is irrelevant: an entity that employs no one under an employment contract is also subject to inspection in this respect.

The extension concerns three areas: health and safety, the legality of employment and the conclusion of civil-law contracts in the circumstances of art. 22 § 1 k.p. Outside those areas the range of inspected entities remains unchanged.

The minimum hourly rate — art. 13 pkt 5

A separate basis is art. 13 pkt 5 of the Act on PIP. Inspections cover entrepreneurs and other organisational units for which, as part of their activity, a commission is being performed or services are being provided, or were performed or provided in the year preceding the day the inspection started — as regards the payment of remuneration at the level resulting from the minimum hourly rate under the Act of 10 October 2002 on the minimum wage.

This is the same "one year back" mechanism, but for a different subject of inspection. In practice an inspector may cover two axes in a single visit: whether a civil-law contract is not replacing an employment contract, and whether the hourly rate does not fall below the statutory minimum.

What the National Labour Inspectorate passes to ZUS

The new art. 14a of the Act on PIP obliges the Inspectorate to make data established during an inspection available to the Social Insurance Institution. The catalogue is closed and covers two groups.

Data of the inspected entity (art. 14a pkt 1): NIP, REGON, name, registered address — including the place where the work is performed if the entity entrusting the work is an employment agency — the date of the inspection and the amount indicated in the labour inspector's order referred to in art. 11 ust. 1 pkt 7 of the Act on PIP.

Data of persons performing work (art. 14a pkt 2): first name and surname, PESEL number (and where none has been assigned — the type, series and number of the identity document), citizenship, the period of work performed and the type of contract concluded.

For employers hiring foreigners the key point is that the citizenship of the person performing the work is one of the transferred items of data. Findings from checks on the legality of employment and contribution data meet within a single authority, and a discrepancy between the document legalising the work, the contract and the social insurance registration stops being visible from one side only.

The flow runs both ways. Art. 50 ust. 3 pkt 3 of the Act on the social insurance system lists the National Labour Inspectorate among the entities to which ZUS may make available data held in the insured person's account and in the contribution payer's account. The reform added to this an inter-institutional task team for risk assessment, set up jointly by the Chief Labour Inspector (Główny Inspektor Pracy), the President of ZUS and the Head of the National Revenue Administration (Krajowa Administracja Skarbowa).

Contribution consequences of a decision on an employment relationship

If an inspection ends with a decision establishing the existence of an employment relationship (art. 11 ust. 1 pkt 7a of the Act on PIP), three provisions of the Act on the social insurance system come into play on the contribution side.

Art. 38b ust. 1: contributions paid for a person registered for insurance on the basis of a mandate contract or on the basis of art. 6 ust. 1 pkt 5 are deemed paid towards amounts due under the employment relationship. In that case art. 24 ust. 6a–6g does not apply (art. 38b ust. 3).

Art. 38b ust. 2 in conjunction with art. 36 ust. 4e: the payer submits insurance documents for the period covered by the decision to ZUS within 7 days of the day the decision became final and, where an appeal was brought before a court, from the day the ruling became legally binding.

Art. 24 ust. 5h: the limitation period for contribution liabilities is suspended from the day an appeal against the decision is lodged until the day the decision became final and, where an appeal was brought before a court, until the ruling became legally binding. An appeal therefore does not "sit out" the five-year limitation period under art. 24 ust. 4.

The reform left the sanction background on the ZUS side unchanged: a 5-year limitation period for contribution liabilities (art. 24 ust. 4), an additional charge of up to 100% of unpaid contributions (art. 24 ust. 1a), a fine of up to 46 000 zł (art. 98 ust. 1) and criminal liability under art. 219 of the Criminal Code.