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The Institution of Minimum Wage in Polish Labour Law

What is the minimum wage in Polish labour law?

The concept of minimum wage represents one of the fundamental legal mechanisms for the protection of employees under Polish labour law. Its primary purpose is to ensure that an employee receives remuneration that reflects the value of the work performed and is sufficient to cover basic living expenses. Importantly, the minimum wage is not dependent on the employee’s education level, professional experience, qualifications, or the scope of their duties. In practice, this means that every person employed under an employment contract is entitled to receive no less than the legally established minimum amount for a given calendar year, regardless of the individual terms and conditions of their employment relationship.

Legal framework: Minimum Wage Act of 2002

The legal basis for the regulation of minimum wage is the Act of 10 October 2002 on Minimum Remuneration for Work. This statute outlines both the procedure for determining the amount of the minimum wage and the scope of information that the Council of Ministers is required to submit during the annual process of setting the new rate.

How the minimum wage is set in Poland

The process of determining the minimum wage is multi-stage and takes into account economic, social, and macroeconomic indicators. Each year by 15 June, the Council of Ministers must submit a proposal for the minimum wage for the following year to the Social Dialogue Council, along with relevant data. This includes, for example, inflation rates, forecasts of average wage growth, the structure of income from employment, and the standard of living across different social groups. The Social Dialogue Council is then required to present a joint position by 15 July. If no agreement is reached, the authority to determine the final amount of the minimum wage reverts to the Council of Ministers, which must issue a regulation by 15 September. The law clearly states that in such cases, the minimum wage set by the government cannot be lower than the amount initially proposed.

Minimum wage vs. Civil Law Contracts in Poland

The statutory minimum wage applies exclusively to employment relationships as defined by the Labour Code. Therefore, it covers only those who are legally considered employees. In the case of civil law arrangements, particularly mandate contracts (umowy zlecenia), a separate protective mechanism applies in the form of a minimum hourly rate. This rate is also established at the national level and published through a regulation of the Council of Ministers. If a contractor under such a civil law contract receives less than the applicable minimum hourly rate, the State Labour Inspectorate (PIP) is authorised to intervene. It may issue binding orders or request that the employer or principal make the necessary adjustments.

Criticisms and economic impact of minimum wage increases

There is, however, ongoing criticism of the system of annual increases to the minimum wage. While these increases may be justified from a social standpoint, they are said to have potential negative economic consequences. Critics point to the risk of increased labour costs, reduced employment opportunities, and the potential expansion of the informal (or “grey”) economy. Additionally, it is often highlighted that a single, nationwide minimum wage does not reflect the varying cost of living across different regions. This can place a disproportionate burden on employers operating in economically weaker areas.