Longer vacation leave, remote work in the Labor Code and lower tax wedge - planned changes?

Co-Size-Changing

The budget, salaries and social benefits teams of the Social Dialogue Council and labor law in communication with trade unions are deliberating on the creation of a new social contract. The planned changes should take Poland out of the economic crisis resulting from the prolonged fight against the COVID-19 epidemic. The deliberations concerned various thematic areas from the border of business, employee rights and social policy of the state, including lowering the tax wedge and permanent inclusion in the Labor Code of provisions regarding remote work. Employees can also count on longer vacation leave, according to the initial proposals submitted by the trade unions.

Longer vacation leave and lower tax wedge

For employees, potentially the most important topics discussed in the Social Dialogue Council are lowering the tax wedge and longer vacation leave for employees.

The Ministry of Finance proposes to reduce the tax wedge, ie the difference between the total cost of employing a full-time employee and the "on-hand" remuneration that this employee receives. How the proposal would have been implemented - whether by:

  • increasing the tax-free amount;
  • changes in taxes;
  • changes in contributions for the lowest wage;
  • reforming the system of increasing the minimum wage

- has not yet been clarified.

On the other hand, trade unionists who speak on behalf of employees opt for a longer vacation. They are demanding an extension of the days of paid annual leave for employees from 26 to 31 days per year.

Trade unions are also pushing for the dissemination of collective labor agreements under which employees at the industry level could negotiate with employers - for example, establish rules for the use of fixed-term employment contracts or longer employment of temporary workers.

Needs reported by employers

Clear signals from entrepreneurs employing people to work encourage discussions as part of opening the Polish labor market to foreigners, i.e. in practice facilitating the access of employers to cheaper labor from the East.

In this case, trade unions focus on careful dialogue and emphasize that the most important thing is to ensure work for Polish citizens.

The labor law team also discussed the topic related to the implementation of new permanent provisions to the Labor Code regarding remote work, which is so important in the period of the spread of the coronavirus epidemic.

The discussed topics evoke many emotions - difficult negotiations are going to be, however, as emphasized in his opinion by prof. Jacek Męcina from the Lewiatan Confederation - it's best to work on new solutions now than to be surprised by the government's ideas that appear overnight.

According to the assumptions, the social contract should bring benefits to specific groups of stakeholders, but due to the state budget burden, it cannot generate additional costs.