Starting a business in Poland, it is crucial to understand the local labor laws. As a foreigner, you are required to have a valid work permit. Despite the availability of regulations, some entrepreneurs and managers disregard legal requirements. In this article, you will learn about the penalties Poland imposes on both employers and employees involved in illegal employment.
- Consequences of Illegal Employment of Foreigners
- Consequences for Employers Hiring a Foreigner Without a Contract
- Consequences for a Foreign Worker Employed Without a Contract
- Other Consequences for Employers for Illegal Employment of Foreigners
- What Are the Consequences of Illegal Employment of Polish Citizens?
- What Are the Consequences for an Employee (a Polish Citizen) Working Without a Contract?
Consequences of Illegal Employment of Foreigners
The consequences of illegal employment of foreigners are strictly regulated by law. There are 11 types of violations that can be committed by both employees and employers.
These include:
- Assigning illegal work to a foreigner
- A foreigner performing work unlawfully
- Fraudulently inducing a foreigner into illegal employment
- Demanding material benefits from a foreigner in exchange for actions aimed at facilitating employment
- Fraudulently persuading another person to assign illegal work to a foreigner
- Failing to notify the voivode in writing about assigning work to a foreigner
- Assigning paid work to a foreigner under the management of an entity other than an authorized employment agency
- Failing to inform the local labor office about circumstances related to a foreigner working under a seasonal work permit or performing other work without requiring a new permit
- Neglecting the obligation to provide accommodation for a foreigner who entered Poland for seasonal work
- Failing to inform the competent district labor office about circumstances related to a foreigner’s employment based on a declaration of intent, or providing false information about the hiring, non-acceptance, or termination of the foreigner’s employment
- Failing to sign a written employment contract with a foreigner who is exempt from the work permit requirement, or failing to provide a translated version of the contract in a language understandable to the foreigner before signing
Consequences for Employers Hiring a Foreigner Without a Contract
The most severe penalties apply to offenses such as fraudulently inducing a foreigner into illegal employment, demanding material benefits from a foreigner in exchange for actions aimed at enabling employment, as well as fraudulently persuading another person to assign illegal work to a foreigner. These violations are punishable by a fine ranging from 3,000 to 30,000 PLN.
Assigning illegal work to a foreigner is subject to a fine ranging from 1,000 to 30,000 PLN.
Failure to comply with the obligation to notify the voivode in writing about assigning work to a foreigner may result in a fine ranging from 100 to 5,000 PLN.
Failure to notify the competent district labor office about circumstances related to a declaration registered in the declaration registry, or providing false information regarding the hiring, non-acceptance, or termination of a foreign worker based on a work assignment declaration, is punishable by a fine ranging from 20 to 5,000 PLN.
In other cases, the fine ranges from 200 to 2,000 PLN.
Consequences for a Foreign Worker Employed Without a Contract
A foreigner working illegally may face the following consequences:
- A fine ranging from 20 to 5,000 PLN
- An obligation to return to their home country
- A ban on re-entering the territory of the Republic of Poland and other Schengen countries for a period of 1 to 3 years
Another offense is assigning work to a foreigner who is staying in Poland illegally.
It is considered an offense if a foreigner who does not have a valid document granting them the right to stay in Poland is continuously employed and the work is not related to the employer’s business activity. This is punishable by a fine of up to 10,000 PLN.
If the work is related to the employer’s business activity, it is a criminal offense punishable by a fine or restriction of liberty.
In the case of assigning work to multiple foreigners who simultaneously reside in Poland without a valid residence document, the penalty is imprisonment for up to 3 years.
The same applies to assigning work to an underage foreigner who resides in Poland without a valid residence document.
Other Consequences for Employers for Illegal Employment of Foreigners
One of the consequences of illegally employing a foreigner may be a refusal to issue work permits for other foreigners the employer intends to hire. The voivode will refuse to issue a permit if the employer:
- has been legally penalized for an offense related to illegal employment;
- within 2 years of being found guilty of providing illegal work to a foreigner, is again prosecuted for a similar offense.
Additionally, the employer is obliged to cover the costs associated with issuing and enforcing a decision requiring illegally employed foreigners to return to their home country.
What Are the Consequences of Illegal Employment of Polish Citizens?
Employers face much more severe penalties for illegal employment than employees. It is important to note that work may be considered illegal if an employee is already performing duties but has not yet received a contract. Sometimes, an employee starts working under agreed conditions, but the contract process takes a few days. In such cases, this can be classified as undeclared work. The fine can be up to 5,000 PLN.
Examples of penalties for employers hiring employees illegally:
- For employment without a written contract or under a civil law contract – a fine ranging from 1,000 to 30,000 PLN.
- For failing to pay an employee’s ZUS social security contributions – a fine of up to 5,000 PLN or imprisonment for up to 2 years (if the violation of employee rights is considered intentional or persistent).
- If the employer is found guilty of a tax offense – a fine of up to 720 daily rates and/or imprisonment for up to 3 years.
Additionally, as of January 1, 2022, new regulations under the so-called Polish Order have come into effect. Under these rules, for each month of illegal employment, the employer will be charged additional income in the amount of the minimum wage. This applies regardless of whether the employer actually paid the worker and in what amount.
What Are the Consequences for an Employee (a Polish Citizen) Working Without a Contract?
It depends on whether they receive unemployment benefits.
If a person is officially unemployed, meaning they are registered with the employment office, they have certain obligations. One of the most important is regular visits to the local administration, confirming their readiness for employment. If they work illegally, they are violating the applicable laws.
If a worker takes a job and does not report it within 7 days, they face a fine ranging from 500 to 5,000 PLN. If caught working illegally for the first time while being registered as unemployed, the fine will likely be minimal. However, repeated violations will result in the maximum penalty.
Additionally, the employee may face issues with the tax office if they fail to declare their income in their annual tax return. Generally, any undeclared income that is not reported to the tax authorities is subject to a 75% tax.
However, if the worker does not have unemployed status, there are no legal consequences—they will simply be informed of their rights.
