Gray economy and unemployment may result from new burden of civil law contracts

From January 1, 2021, the obligation to report specific work contracts to the Social Insurance Institution (ZUS) has entered into force. As it turned out, this was the first step aimed at introducing compulsory health and social insurance contributions. A similar obligation is also to apply to mandate contracts.

"As research shows, as many as 9 out of 10 entrepreneurs are against the burden of work contracts, which currently do not require paying contributions. We are in the midst of an economic crisis caused by a pandemic, employers are struggling to maintain jobs and financial liquidity. Introducing another financial obligation seems completely inadequate to the current situation of entrepreneurs,” Jan Enno Einfeld, Managing Director of Finiata Group, commented.

“Business owners will be forced to either reduce net wages or reduce employment. As a result, this will lead to an increase in unemployment, which in February amounted to 6.5 percent, which is the highest rate in three years,” he added.

The prolonged lockdown and limitation of the functioning of some parts of the economy meant that many companies are in a very difficult financial situation. The worst situation is in the HoReCa industry, where 96.7 percent of companies indicate that the pandemic has threatened the company's stability. The difficult situation is also noticeable among trading companies, especially in the textile, clothing, and footwear industry, where 84.1 percent of businessmen point out problems. Worryingly, the pre-pandemic trade and services sectors contributed 54 percent of the total jobs in small and medium-sized enterprises in Poland. Over the past year, this number has dropped significantly, and the changes in accounting proposed by the government may further aggravate the problem.

The Business Center Club survey shows that nearly 3 out of 4 employers are afraid of the growth of the shadow economy, i.e. employing contractors illegally. As a result, ZUS and the state will lose, instead of filling the budget gap and limiting illegal practices. 

(WBJ)