Saturday, June 22, 2024

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Government unveils radical labor reforms

2024 brings changes to the job market – proposals of the new government and the ideas set in motion by its predecessors.

According to the announcements of the parties forming the new government, significant changes await Polish workers in 2024. Their vision of labor market reforms focuses on striving for gender equality, supporting women in returning to work after childbirth, stabilizing the tax system and providing salary increases for teachers and public service workers.

The political groups forming the new government were already competing with proposals for employers and employees before the elections. The targeted audience includes over 4.3 million businesses, approximately 602,000 companies, and over 17 million people active in the workforce (Central Statistical Office – GUS). This diverse community is in for changes in the job market. The first changes, already in effect since January, involve initiatives set up by the outgoing government. This includes another increase in the minimum wage from PLN 3,600 to PLN 4,242 (from January 1) and PLN 4,300 (from July 1). Along with this, benefits such as night shift allowances and tax deductible exemptions will also increase. 

However, this is just a fraction of what lies ahead. Considering the numerous proposals for the labor market and the declared timelines for their implementation, a series of new laws and regulations will appear in the first hundred days of the government. Implementing them successfully requires a well-thought-out strategy. We need a development plan for the Polish economy and job market, in short, medium, and long-term perspectives, preceded by an audit and thorough analysis.

Schools and offices are due for a change in the new year. New rules for compensating overtime work for civil service members will need to come into effect. These will allow compensation for overtime work done at a supervisor’s request and for civil service officials working night shifts. Such compensation will be paid upon the employee’s request. Civil service employees can also expect a salary increase, a point emphasized by all parties forming the new government in their program. If the president does not veto the budget, public service employees, including those in administration, courts and prosecution, will receive a 20% pay raise. Teachers are promised a 30% increase in their salaries. The increased salaries will be paid retroactively from the beginning of 2024. This decision seems necessary as more and more people are leaving the profession and teachers once again find themselves on the list of deficit occupations in 2024 (Occupational Barometer), with low wages being one of the reasons for this deficit.

Support for women and entrepreneurs is another commitment. This includes initiatives to eliminate gender pay gaps and break down barriers hindering equal treatment. Another aspect is supporting entrepreneurs, including introducing transparent rules for calculating health insurance contributions. To halt the significant increase in the costs of running a business in recent years, the coalition aims to introduce a principle where an employee’s sick pay will be covered by the Social Insurance Institution (ZUS) from the first day. They will also provide a cash method for calculating personal income tax (PIT) for entrepreneurs and the possibility of temporary exemption from social security contributions. Relieving entrepreneurs seems to be a good and expected direction, especially considering that the November GUS report once again indicates that the most commonly cited barrier to doing business by companies – and affecting the scale of their investments – includes high inflation, an uncertain macroeconomic situation and high costs of implementation and investment.

Among the mentioned 100 specifics are proposals such as lowering taxes and the costs of doing business, eliminating the so-called “rent trap” – people with disabilities will be able to work without losing disability benefits, the “Active Mom” program, providing PLN 1,500 per month for childcare – the so-called “grandmother’s” subsidy, and the Care Bonus for working caregivers of dependent individuals amounting to 50% of the minimum wage. 

The situation of military personnel wrongly dismissed after 2015 is also set to change. They will have the opportunity to return to service. There are also plans to introduce a law on the status of artists guaranteeing minimum social security, access to social and health insurance, taking into account the specific nature of their work. Support for the system will come from funds previously allocated, including to the Church Fund.

Forgotten Foreigners

Currently, there are no proposed changes regarding immigration policy, even though many Polish companies employ foreigners, and, as indicated by a survey by the Progress Group, the individuals themselves (56% of foreigners working in Poland) admit that issues related to their stay and work in Poland are not important to national politicians. 25% claim that the government is addressing this issue sufficiently and 19% have no opinion on the matter. Employers wishing to hire foreigners from distant destinations where there is no need also highlights immigration policy as a crucial issue for the job market. It’s high time to remind ourselves of immigration policy. It’s a pity that in the heat of the battle, foreigners, whom the job market needs, have been forgotten. There is a lack of proposals regarding the legalization procedures for residence and employment or the fight against the informal economy, a problem that cannot be swept under the rug. Especially considering that this issue affects many companies that employ or want to employ foreigners, including those from distant destinations. According to our survey, 56% of companies currently have such intentions and they may be disappointed that none of the politicians have thought about how to streamline this process.

Sylwia Ziemacka
Sylwia Ziemacka
“I believe our unique selling point is that we focus on what brings us together. Poland Weekly offers something you will not find anywhere else: a truly international and unifying perspective focused on content that builds cooperation and mutual understanding. This attitude doesn't make us naïve, but it allows us to focus on mutual understanding and a search for solutions. There are so many new challenges that we are all facing, such as energy transformation, climate change and supply chain disruption, to name but a few. By working together and sharing good practices, we can achieve so much more.”