Marcin Frąckowiak on Higher Penalties for Employers for Violating Labor Code Regulations

The Sejm has passed a law introducing higher penalties for employers who violate labor law regulations. These changes are intended to increase the safety of employees and employers, though employers themselves disagree. Will this amendment actually contribute to the creation of new jobs, or will it have the opposite effect?

In an article for Strefa Biznesu, Marcin Frąckowiak, Managing Counsel and Attorney-at-law in the Labor Law Department at Sadkowski and Partners, shared his comments on the matter.

According to our expert, the increase in penalties for actions such as signing civil law contracts instead of employment contracts and failing to pay wages on time may have the opposite effect to what was intended.

“The first thought that may come to a small business owner is whether to hire employees at all and risk potential penalties, followed by a lengthy appeals process. Unfortunately, I have the impression that these regulations, instead of promoting legal employment, may slow it down and even discourage employers from signing employment contracts. This could be a serious barrier to increasing employment, particularly for small, local businesses. Paradoxically, it may turn out that, in the face of high penalties, companies will be more inclined to engage in civil law relationships,” emphasizes Marcin Frąckowiak.

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