B2B contracts have been popular in Poland for years - both among people running their own businesses and among companies looking for flexible forms of cooperation. This form of engagement is often associated with lower costs, greater flexibility and the option of choosing an attractive form of taxation.
However, changes in inspection practice and discussions about future regulations mean that B2B contracts may in practice be reclassified as employment contracts if the way the work is performed resembles a classic employment relationship. This is an important issue for both business owners and contractors, as it has significant legal and financial consequences.
What is a B2B contract and how does it differ from employment?
A B2B contract is a form of cooperation between two business entities - usually a self-employed person and a company commissioning services. Unlike an employment contract, a B2B contract is not subject to the Labour Code and does not give the same entitlements, such as:
- the right to paid leave,
- sick pay,
- protection against dismissal,
- other employee benefits.
For contractors and companies, the advantage of B2B is greater flexibility in organising working time and the option of choosing how the business is taxed. However, this flexibility may become one of the criteria for assessing the real nature of the cooperation.
The risk of a B2B contract being reclassified as an employment contract
In practice, what matters most is how the work is actually performed, not just what is written in the contract. If a self-employed person provides services in conditions typical of employment - at set hours, under the direction of the client, at a place specified by the company - such circumstances may suggest the existence of an employment relationship.
In such situations, inspection authorities or courts may decide that a B2B contract is in practice an employment contract. Decisive factors include:
- lack of real autonomy in performing the work,
- fixed working hours and place of service delivery,
- subordination to management,
- lack of business risk on the part of the contractor.
Where the actual terms of cooperation match the characteristics of employment, a B2B contract may be reclassified as an employment contract despite its formal name and the wording of the agreement. This is a multi-dimensional risk that inspection bodies in Poland are beginning to analyse.
What does this mean for contractors and employers?
Reclassifying a B2B contract as an employment contract has serious consequences. For a self-employed person, it may mean:
- acquiring employee rights, such as the right to leave,
- the ability to claim benefits arising from the Labour Code.
For the company commissioning the services, the consequences may be even more serious:
- the need to pay outstanding Social Insurance Institution (ZUS) contributions and taxes,
- payment of employee benefits,
- higher employment costs,
- the risk of administrative penalties or sanctions.
In extreme cases, companies must expect to settle the differences in social security contributions and taxes paid, which may go back several years if an inspection shows that the actual nature of the cooperation corresponded to employment.
How to tell B2B from employment?
The key element is an analysis of the actual relationship between the parties. A B2B contract makes sense only if the person runs the business in their own name and at their own risk, can work with other entities and has real autonomy in delivering the services. This means that:
- the contractor decides the time, place and manner of performing the work,
- does not carry out instructions in a subordinate manner,
- bears the business risk for the services provided.
In practice, it is worth regularly reviewing contracts and working practices to make sure there are no real indications of an employment relationship.
How to prepare and minimise the risks
In the face of a growing number of analyses and inspections, people working on a B2B basis and companies using such contracts should:
- carry out a contract audit and check whether the provisions match the actual terms of cooperation,
- verify the way the work is performed in terms of the contractor's autonomy,
- avoid situations where B2B resembles employment, with long hours and under the direction of the client,
- seek legal and tax advice when structuring employment arrangements.
A well-structured B2B contract and practices consistent with it can significantly reduce the risk of the contract being treated as an employment relationship.
Summary
B2B contracts are a popular and flexible form of cooperation, but in practice they may be reclassified as employment contracts if the actual terms of cooperation correspond to employment. This is an important issue for self-employed people and business owners, as such a classification has significant legal, tax and financial consequences. Regular review of contracts, careful structuring of business relationships and expert support are today not only good practice, but part of safe risk management.
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