Disputing contributions

President Lech Kaczyński has submitted two draft bills to the Sejm aimed at fighting fictitious self-employment. The bills would set similar rules for employment and self-employment, widen the remit of inspections and introduce zł.30,000 fines for those promoting false self-employment.

Self-employment is natural in some segments of the economy, particularly in small-scale activities. Many architects, IT experts, shop owners and craftsmen are self-employed. Jeremi Mordasewicz from the Polish Confederation of Private Employers (PKPP) Lewiatan underlines the importance of actual self-employment for the economy "It is an economic pre-school. Before one goes on to create a larger company and employ others, one has to learn how to organize one's own work time," Mordasewicz claims.

What the government wants to eradicate is false self-employment. This occurs when workers who should be given an employment contract are hired on a self-employment basis. "The main reason for this are non-salary labor costs and the flexibility of the self-employment contracts," Mordasewicz explains. Non-salary labor costs can amount to as much as 80 percent of an employee's net pay on a full employment contract.

The PKPP Lewiatan expert doesn't think that the inspections will be effective. What's more, he is afraid that they might in fact hurt honest entrepreneurs, those who are "really" self-employed.

Last week, the government announced that it is planning a tax reform to decrease the level of obligatory insurance contributions employers have to pay. "This is good news for everyone who is employed since their salaries will increase," declared Finance Minister Zyta Gilowska. She stated that the fall in revenue will be financed from the results of economic growth in 2006 and 2007.