BackWorking without a contract – why doesn’t it pay?
Working without a contract still seems on the surface to be an attractive solution for many Poles and foreigners. Unfortunately, in reality it is a very bad idea for both the employee and the employer. When are we talking about illegal employment? What are the penalties for working illegally? What are the consequences for the employer? What are the risks for the employee? Where to report illegal work? Is black labour popular in Poland? How to prove black labour?
Illegal work – what is illegal employment?
Illegal work is employment without a contract. This phenomenon was extremely popular in the 1990s, but it can still be observed in some industries, especially where there is high employee turnover or in low-paid sectors. It should be remembered that the lack of a contract is punishable, but in reality the employer bears greater responsibility than the employee.
According to labor law, illegal work can take various forms, and includes:
- work without a contract (employment contract, civil law contract),
- lack of mandatory social insurance for the employee,
- taking up employment, gainful employment or starting a business by an unemployed person who did not report this to the employment office,
- performing work by a foreigner without the appropriate permit (e.g. employing a Ukrainian without a contract).
Why does working illegally seem attractive?
Illegal work, despite having many unpleasant consequences, is still chosen by many employees in Poland. Why is illegal work attractive?
- The employee receives a “higher salary” because the employer does not pay social security and health insurance contributions. The employer then increases the employee’s salary to make it more profitable for him. It is also profitable for him, because he has lower costs of employing the employee.
- The employee’s lack of attachment to work results from the lack of a formal contract, which means that the employee can leave at any time.
- Fewer formalities.
- Greater likelihood of people in a difficult life situation or with low qualifications taking up work.
- Faster employment.
- Using fictitious civil law contracts.
Is undeclared work still popular in Poland?
In 2023, inspectors of the State Labor Inspectorate (PIP) carried out 1,270 inspections, which revealed as many as 40% of irregularities, and 7.6% of all employees worked illegally. The inspections showed that in 6% of cases there were no written contracts or they were signed after the deadline. In 27% of inspections, it was found that employees did not report to ZUS on time, and there were also several cases in which unemployed people did not inform labor offices about taking up employment. However, these data do not reflect the full scale of the problem, because the inspections cover only selected companies, and the tools to combat undeclared work remain limited.
Working without a contract – the consequences of undeclared work
The consequences of undeclared work can be very unpleasant for both parties. What are the risks for the employer and the employee?
Consequences of working illegally for the employer
Employers who decide to employ employees illegally should be aware of the unpleasant situations they may encounter. They expose themselves to serious legal consequences, including high financial penalties and criminal liability. ZUS may impose a fine of up to PLN 5,000 on the employer for failure to pay contributions, and the Tax Office may demand a penalty of 720 daily rates. For this type of crime, the employer may also be sentenced to up to 3 years in prison.
The penalties do not end there. The employer may receive a PLN 2,000 penalty for failing to draw up a written contract with the employee and a PLN 5,000 fine for repeating the same offense. In addition, a penalty of at least PLN 3,000 is due for failing to provide data for the proper calculation of contributions to the Labor Fund or failure to pay them. At least PLN 3,000 penalty for employing an unemployed person who has not been registered with the District Labor Office. In the case of illegal employment of a foreigner, the employer may receive a fine from PLN 1,000 to PLN 30,000.
Where to report illegal work?
Illegal work in workplaces is most often discovered during routine inspections carried out by the State Labor Inspectorate (PIP). Inspectors report this fact to the Fiscal Control Office as a suspicion of a violation of tax regulations regarding income tax.
The employee himself can also report illegal work if it concerns him or other people. If he witnesses illegal employment, he can send a report to PIP. Then, labor inspectors deal with the entire process.
Lack of employment contract and remuneration – how to prove illegal work?
The employer who hired us to work without a contract may not pay us remuneration, and pursuing your rights in such a situation may not be so easy. The lack of a formal contract means there is no evidence of the existence of an employment relationship. However, illegal work can be proven using evidence. This may be text messages, emails, or calls to the employer. Any photos on the premises of the workplace, or a list of hours worked, etc.
You can report illegal work even a few years back, but it is harder to prove its existence. As time passes, the availability of evidence, such as witnesses, documents, or other confirmation of cooperation, may be limited.
Illegal work in your CV – can you include it?
Working without a contract is illegal employment, which we shouldn’t really brag about, especially in certain professions such as a teacher or lawyer. However, breaks in employment can also look bad to the employer. It is therefore worth adding illegal work to your CV, but depending on the job offer you are applying for. A future employer should be most interested in what skills and experience you have, the fact of working illegally should not eliminate your chance for future employment.
Legal work – job offers
Eurokadra is an employment agency based in Katowice and with branches in various cities in Poland, which has been supporting the employment market for over a decade. The company stands out for its care for the legality of employment and ensuring safe working conditions. If you care about stable employment, transparent rules and professional support, then Eurokadra is a place that will help you find a job tailored to your needs and expectations. Join the group of satisfied employees and build your professional future with us!
Contact us to get the job you are looking for!
Working without a contract carries many unpleasant consequences for both the employer and the employee. Labor law clearly states that the employer is obliged to conclude a contract before starting work, and any form of work should comply with the regulations.
Reporting work illegally can result in serious legal consequences, including financial penalties and liability before the labor court. For the employee, failure to sign a contract means lack of legal protection in terms of remuneration, working time or benefits. Therefore, both employers and employees should remember their obligations to build a fair labor market that supports professional development and employment stability.
Check also: Recruiter — who is he, what are his responsibilities?
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