The age of retirement permitted by the Retirement and Disabled Pensions from the Social Security Fund Act (the “Act”) is 67 for both genders. However, an amendment to the Act, which comes into force on 1 October 2017, reduces the retirement age to 60 years for women and 65 for men. Individuals who reach these ages will be eligible to apply for an old age pension. However, retirement in Poland is seen as a right rather than a duty and therefore, no one will be forced to retire at the reduced age.
The amendment to the Act introduces uncertainty around pre-retirement protection. According to article 39 of Poland’s Labour Code, an employer cannot terminate an employee’s contract within 4 years of the age at which the individual is entitled to obtain a pension. The reduction means that this protected period is reduced to 56 years for women and 61 for men.
The amended law means that employees who already have pre-retirement protection as of 1 October 2017 will continue to be protected until they reach retirement age under the original Act (i.e. until the age of 67). Those employees who would not benefit from pre-retirement protection under the current legislation, but have less than four years until they retire, will be protected for a period of four years from 1 October 2017 (i.e. until 30 September 2021).
This means that employers will not be able to effectively terminate the contract of an employee who is in the pre-retirement protection period, even if the employee is already entitled to a pension. This is something that employers should bear in mind when considering job reductions.
List of prohibited work for pregnant and breastfeeding women
On 1 May 2017, an Ordinance relating to the list of burdensome, hazardous or harmful work for pregnant and breastfeeding women came into force (the “Ordinance”) updating the Ordinance of 10 September 1996.
According to article 176 of the Labour Code in Poland, “pregnant and breastfeeding women cannot perform arduous, hazardous, or detrimental-to-health work which may have an adverse impact on their health, pregnancy, or breastfeeding”. The Ordinance defines a list of jobs which are seen as particularly burdensome and dangerous to the health of pregnant and breastfeeding women, which includes manual transport of heavy loads, working in cold, hot and variable micro-climates and work with exposure to high levels of noise or vibration amongst others.
One of the most important changes in the Ordinance is that it is now prohibited for pregnant women to work in front of a computer monitor for eight consecutive hours. The provisions also state that after every 50 minutes, a 10 minute break is required during the employee’s normal working hours. Additionally, where an employer employs at least 50 people, it must update the company’s work regulations with an updated list of the prohibited work.
50% tax deductible costs of earnt revenue
More and more companies are taking advantage of the 50% tax deductible costs to reduce income tax expenses of their recruited engineers, IT and marketing specialists. Employees may benefit from a higher tax deductible cost up to an annual limit of 42,764 PLN.
According to article 22 of the Personal Income Tax Act, employees can increase their tax deductible costs by up to 50% in respect of the assignment of ownership rights to works that they have created. This is entirely determined by the transfer of intellectual property rights or copyrights by the creator to the employer.
To actually obtain 50% tax deductible costs of the earnt revenue, provisions relating to the transfer of intellectual property must be present in the employment contract. The contract must clearly indicate that part of the remuneration for the relevant assignment is payable to the employer. Secondly, employers must document whether 50% of the earnt revenue is adequately proportionate to the time spent by the creator of the transferred work. The number of working hours spent on creative work duties should be documented after completion of a specific piece of work and not in advance of it.
The list of pieces of work should be divided into two sections – creative pieces of work and pieces of work which lack creative features. Only creative pieces of work are covered by the 50% tax reduction. A creative piece of work should require 80% of the creator’s time spent at work and only 20% of the time should be dedicated to the pieces lacking creative features. Further, employees may not use the higher tax deductible cost while on leave (e.g. sick or annual leave).