Does ZUS have the right to question the amount of an employee's remuneration?

Service

The employee's remuneration is the basis for calculating social security contributions. Information on the employee's salary is contained in personal monthly reports on due contributions, which, pursuant to Art. 41 sec. 1 of the Act of 13 October 1998 on the social insurance system (Journal of Laws No. 137, item 887, as amended), the contribution payer (in this case the employer) is obliged to transfer it to the Social Insurance Institution. There are two forms for this purpose, which are intended for the settlement of social and health insurance contributions:

  • ZUS RCA form - personal monthly report on contributions due and benefits paid - for the settlement of social and health insurance contributions or benefits paid for your employees (i.e. insured persons)

  • ZUS RZA form - personal monthly report on due contributions for health insurance - for the settlement of health insurance contributions for employees who have a different title to social insurance,

Pursuant to Art. 41 sec. 12 of the aforementioned Act, the information contained in this report is deemed to be consistent with the facts, provided that it is not questioned by the insured within three months of receipt of the information, unless the information on the period covered by the report is questioned by the Social Insurance Institution by issuing a decision.

This provision gives the Social Insurance Institution the power to question whether the amount of the employee's remuneration which is the basis for the assessment of contributions, on which the amount of social insurance cash benefits depends, is correct or not.

In what situations does ZUS verify the employee's remuneration?

The Supreme Court confirmed the right of the Social Insurance Institution to verify the contribution basis declaration, indicating the circumstances justifying its use:

  1. "Under Art. 41 sec. 12 and 13 of the Act of 13 October 1998 on the social insurance system (Journal of Laws No. 137, item 887, as amended). paid on the basis of an agreement contrary to the law, principles of social coexistence or aimed at circumventing the law (Art. 58 of the Civil Code) ”(Resolution of the Supreme Court of 27 April 2005, II UZP 2/05).

  2. "The authorities and courts of social insurance are entitled to verify intentionally inflated declarations of the basis for the amount of contributions for insurance (Art. 58 § 3 of the Civil Code in conjunction with Art. 300 of the Labor Code), if it is done with the purpose and intention to abuse the right to long-term social insurance benefits. Determining in the employment contract an excessively high remuneration for not too many "employee" activities may, in specific circumstances, be considered invalid in the part exceeding the principle of decent remuneration for work within the meaning of Art. 78 § 1 of the Labor Code and violating the principles of social coexistence and the principle of solidarity of the social insurance system with the intention of achieving unjustified benefits from the social insurance system at the expense of this system and "harming" other reliable and honest insured persons. […]

  3. This means that jurisdictional tolerance does not deserve any intentional efforts aimed at obtaining overstated social security benefits in connection with declaring and paying high contributions before the periods of intended or definitive use of long-term social security benefits, because such activities remain primae facie. contradictions with the principles of social coexistence (Article 58 § 3 of the Civil Code in conjunction with Article 300 of the Labor Code) and with the principle of equal treatment of all insured persons in the solidarity insurance system (Article 2a of the system act), which are entitled to benefits proportionally to the required period and amount paid social security contributions "(judgment of the Supreme Court - Chamber of Labor, Social Insurance and Public Affairs of June 13, 2017, I UK 259/16).

In other words, the Social Insurance Institution has the right to question the amount of the employee's remuneration if:

  • has doubts as to whether it really corresponds to the employee's qualifications and the type, quantity and quality of work performed by him,

  • the amount of remuneration of an employee with the same qualifications performing the same work grossly exceeds the remuneration of other people employed in such a position in a given company,

  • the employee belongs to the employer's family or is employed in a unit owned by members of his immediate family,

  • when the employer does not employ anyone else,

  • the employer is actually not active.

Verification of the amount of the employee's remuneration is particularly justified when it can be seen with the naked eye that it is excessively inflated only to "organize" the employee's right to long-term high social security benefits, such as sickness or maternity benefits. When the parties to the employment relationship, acting with the above-described intention, establish remuneration for work at a grossly excessive level, this is an act that is contrary to the principles of social coexistence and results in its invalidity. The right of the Social Insurance Institution to check whether the amount of the employee's remuneration is correct serves to prevent abuse of the right to social insurance benefits.

Does this mean that taking up employment by a woman during pregnancy is contrary to the principles of social coexistence and leads to the abuse of the right to social insurance benefits?

Absolutely not. Refusing employment solely because of pregnancy is discriminatory. The jurisprudence emphasizes that striving to obtain social insurance benefits as the purpose of taking up employment does not indicate an intention to circumvent the law if the employment contract is actually performed (judgment of the Supreme Court of 6 March 2007, file reference number I UK 302 / 06).

Do the provisions providing for the right of the Social Insurance Institution to question the amount of an employee's remuneration comply with the Constitution?

The Constitutional Tribunal also examined the basis for determining by the Social Insurance Institution the amount of the sickness insurance contribution base other than the one resulting from the employment contract. In the judgment of 29 November 2017, P 9/1, the Constitutional Tribunal stated that the provisions of Art. 83 sec. 1 and 2 in connection with Art. 41 sec. 12 and 13, art. 68 sec. 1 and art. 86 sec. 1 and 2 of the Act of 13 October 1998 on the social insurance system (Journal of Laws of 2009, No. 205, item 1585, as amended), constituting the basis for ZUS's competence to determine the amount of the ZUS contribution assessment base for Health insurance by verifying the amount of the employee's remuneration despite the existence of a valid and performed employment contract and the premium collected from it in the amount adequate to the contractual remuneration, are consistent with the Constitution.

How does the Social Insurance Institution verify the employee's remuneration?

When questioning the amount of the employee's remuneration, the Social Insurance Institution changes the information contained in the monthly personal report on the amount of the basis for assessing contributions, and then notifies the insured and the payer about it.

The employee and the employer may, within three months from the date of receipt of the notification, submit an application for a change of the position of the Social Insurance Institution. Failure to submit such a request means that the information provided by ZUS shall be deemed true.

If the application for a change of position has been submitted, the Social Insurance Institution carries out explanatory proceedings and issues a decision establishing that the basis for the assessment of contributions was the lower remuneration.

Remedies

The appeal shall be submitted in writing to the organizational unit of the Social Insurance Institution, which issued the decision within one month from the date of delivery of the decision. If ZUS deems the appeal to be correct, it may amend or revoke the decision within 30 days of its filing. Otherwise, he / she is obliged to refer the case to the court within this period, together with the justification. The competent authority to hear the appeal is the district court with jurisdiction over the place of residence of the party appealing against the decision of the pension authority.

To sum up, the legislator granted the Social Insurance Institution the competence to verify the amount of the employee's remuneration, which is the basis for the calculation of social insurance contributions, which determines the amount of cash benefits paid in the event of sickness or maternity. In particular, granting an employee a salary that grossly exceeds the limits of decent remuneration for work, if it aims to provide him with a high basis for the assessment of social insurance benefits, may be considered as an activity contrary to the principles of social coexistence and therefore invalid. The ratio legis of this provision is to prevent abuse of the right to long-term social security benefits.