B2B or Employment? What the Labour Inspectorate Says Decides It

607 orders to convert contracts - a new reality for business owners

Under its new operating rules, the National Labour Inspectorate (PIP) leaves no doubt - the name of a contract does not determine the nature of the employment. In just the first three months of operating in its new format, inspectors issued as many as 607 orders to convert contracts of mandate or B2B contracts into employment contracts. This is a signal that no business owner using flexible forms of cooperation should ignore.

The Chief Labour Inspector (GIP) has so far issued 19 individual interpretations, which form a kind of risk map for companies engaging staff under civil law contracts. According to findings by Business Insider Polska and "Wyborcza", these interpretations paint an increasingly clear picture of which circumstances point to employment, and when B2B cooperation or a contract of mandate is fully permissible.

For many companies, this means the need to review their existing contracts. The consequences of having the form of engagement challenged can be serious - from an obligation to conclude an employment contract, through back payments of Social Insurance Institution (ZUS) contributions, to financial penalties and the employer's liability for misdemeanours.

What decides whether a working relationship is disguised employment?

The Labour Inspectorate does not look at what is written in the contract. The key criterion is how duties are actually performed and the degree to which the contractor is subordinate to the client. In its interpretations, the GIP consistently points to a set of features that determine the existence of an employment relationship.

Circumstances in favour of classifying the relationship as employment include:

• Setting of working hours and place of work by the commissioning company
• Giving ongoing instructions and supervising the way tasks are carried out
• The contractor operating within the company's organisation rather than as an independent entity
• Absence of real business risk on the contractor's side
• An obligation to perform the work personally - with no option of sending a substitute
• A fixed schedule and remaining at the client's disposal
• Payment for time worked rather than for a specific result

Conversely, a civil law contract is supported by: autonomy in choosing working methods and location, payment for results, the ability to refuse a task, and independent organisation of one's own business. These are the features that distinguish genuine B2B cooperation from a sham one.

The same profession, different outcomes - examples from GIP interpretations

One of the most instructive aspects of the interpretations issued is that the same profession can justify both employment and civil law cooperation - depending on the conditions in which the work is actually performed. This shows that the inspectorate does not draw up rigid lists of "professions banned from B2B", but assesses each case individually.

Drivers - two different rulings

The GIP allowed contracts of mandate for drivers delivering bread. What was decisive was that they could refuse a route, set their own availability and were paid for the task completed. The assessment was entirely different for drivers transporting children with disabilities - they had a fixed schedule, had to work personally and were fully subordinate to the organisation imposed by the company. In their case, the GIP found that the correct form is an employment contract.

IT specialist versus language school administrator

An IT specialist delivering a project with considerable freedom in choosing methods and place of work could, according to the GIP's assessment, work on a B2B basis. The same applied to a legal adviser who independently organised the provision of services. By contrast, day-to-day administrative support for a language school under a B2B contract was challenged - the continuing nature of the tasks, monitoring of their performance and the integration of the service provider into the company's daily operations determined that the cooperation was in the nature of employment.

Waiters, bakers and hairdressers

The GIP interpretations also covered cases of a waiter working to a rota, bakery staff following instructions from supervisors, and hairdressers providing services within a salon's structure. In all these situations, the inspectorate pointed to features of an employment relationship, even though civil law contracts were formally being considered. The common denominator was full organisational dependence on the client.

How can you protect yourself against the risk of contract conversion?

Business owners using B2B contracts or contracts of mandate should carry out a thorough audit of existing relationships. Simply describing a contract as "B2B" or "mandate" does not make it valid - what matters is what the cooperation looks like in reality.

Practical steps worth taking include:

1. Reviewing the actual terms of cooperation - does the contractor genuinely act independently, or is he or she in effect subordinate like an employee?
2. Verifying the contractual provisions - does the contract reflect the real rules of cooperation, or is it merely a facade?
3. Assessing the reclassification risk - what financial and legal consequences are at stake if the form of cooperation is challenged?
4. Considering alternative structures - with an appropriately planned legal structure, you can retain flexibility of cooperation while reducing tax and contribution risk.

For people running a sole proprietorship (JDG) and working on a B2B basis with one main client, the risk is particularly high. It is worth considering whether an alternative form of doing business - for example a limited liability company (sp. z o.o.) with a suitably planned shareholding structure - might better protect business relationships while optimising public-law burdens. Solutions of this kind can, as a rule, offer preferential tax and contribution rates, although each case requires individual analysis.

Need an analysis of your contracts? Take advantage of a free consultation

The growing activity of the National Labour Inspectorate means that the previous approach of "we put B2B in the contract and don't worry" can create real legal and financial risk. The GIP interpretations clearly show that practice counts, not what is written in the contract - and that the supervisory authorities have increasingly precise tools of assessment.

If you work with contractors on a B2B or mandate basis and are not sure whether the form of engagement matches the real working conditions - do not wait for an inspection. The Global Accounting team offers a free 15-minute consultation, during which you can make an initial assessment of the risk and learn about possible solutions tailored to your situation.

Call: +48 505 684 412 or write to [email protected]. The first consultation is free.