Employer of Record in Poland

In the provision of temporary employment services, registration in the register of temporary employment agencies is required. Running a business without being entered in the relevant register is punishable by a fine of even up to PLN 100,000. 

No entry does not automatically mean that an employment relationship exists between the employee and the company (the actual employer) to which he or she has been “posted”. To establish that an employment relationship exists between the parties, constitutive features of the employment relationship must be present between the employee and the actual employer (in particular, the employee must be subordinated to the foreign employer and must perform work for it). Importantly, the existence of such features should generally be asserted at court. In the court's assessment, it may also be relevant whether the foreign enterprise uses the services of an entity registered as a temporary employment agency.

When it comes to the actual employer, it is not legally required to obtain a licence or register in connection with using the services of a temporary employment agency.

A temporary worker may perform temporary work for one hirer (actual employer) for a limited period of time, which may not exceed a total of 18 months in a period of 36 consecutive months.

Throughout his or her work for the hirer the temporary worker may not be treated less favourably in terms of working conditions and other terms of employment than other employees of the hirer (actual employer) in the same or similar position. A temporary worker against whom the hirer (actual employer) has violated the principle of equal treatment may claim compensation from the temporary employment agency in the amount specified in the Labour Code. The temporary employment agency may claim from the hirer the reimbursement of the equivalent amount of the compensation that it has paid to the temporary worker.

Given that a worker hired by a temporary employment agency actually performs work for the hirer (actual employer), there is a risk that revenue authorities may consider that the actual employer runs a permanent establishment in the temporary worker's country of residence. This risk also exists if the temporary worker performs remote work for the actual employer, i.e. works from home. Please also note that a temporary worker who performs work for the actual employer which falls within the actual employer's core business and may negotiate and/or sign contracts on behalf of the foreign enterprise, may be considered a dependent agent within the meaning of double tax treaties.

Article 15(3) of the double tax treaty between Poland and Germany provides for special rules for the leasing of workers. According to the above-mentioned provision, the 183-day clause does not apply to the remuneration received by a worker, paid by or on behalf of the employer, if the worker also performs, in the context of hired work, services for a person other than the employer who directly or indirectly controls the manner in which these services are performed, and the employer takes no responsibility or risk for the consequences of the work performed by the worker.

Thus, in the context of the above provision, the temporary worker's remuneration is generally taxed at the place where the worker performs the work.