Crèches Act to legalise childcare workers, Poland
In 2011 the Polish parliament adopted the so-called Crèches Act. The law opens the way for parents of young children to choose an alternative path to the organised care provided in childcare establishments, such as officially hiring a nanny. The response has not been significant, yet the government is not discouraged and plans to continue on the legislative path to reach other groups of workers trapped in the shadow economy and create possible exits for them.
Ineffective social policy had long been subject to criticism in Poland. One of the features regarded as insufficient was the lack of care facilities for young children, which hampered the return of the parents (especially, mothers) to the labour market. In an attempt to fill the void, the government stepped forward with an initiative to provide parents with a choice between collective and individual forms of childcare. In 2011 the Act on the care of children aged three and under, commonly referred to as the Crèches Act, came to force. Aside from regulating the organised forms of care (that is, crèches), the law also allows for the legal employment of nannies in households.
The main objective of the new law was to give the parents (especially, mothers) of young children a wider choice while seeking external help in childcare, and, in effect, increase their labour market mobility. The possibility of legally hiring a nanny provided an alternative way to satisfy childcare need outside of organised facilities.
In the background note to the draft legislation prepared by the government, it was argued that 'Bearing in mind that currently the majority of nannies work informally (emphasis – J.Cz), introduction of the new solution may contribute to:
- increasing the interest in working as a nanny among younger persons not having the right to an old-age pension or disability pension,
- increasing the social protection level of persons employed as nannies.'
The Act on Care of Children Aged Three and Less was passed into legislation on 4 February 2011 and, for the most part, came to force a month later. The Act offers an opportunity to hire a day care-taker (a nanny) for children from the twentieth week of life up to three years of age (in certain cases the threshold is raised to four, if no places in the local crèches are available).
The Act stipulates a number of requirements that the parents and the nanny are obliged to meet:
- signing an ‘activation contract’ between the parties (it is a civil law contract, and the formal basis of the employment relation);
- registration of parties with the Social Security Institution (Zakład Ubezpieczeń Społecznych, ZUS), the parent – as the payer of social security contributions, and the nanny – as the insured;
- until the fifteenth day of each month the payer (the parent) reports to ZUS with monthly calculations of the contributions paid for the nanny;
- the contributions may vary depending on the nanny’s remuneration: if the nanny’s pay amounts to less than the national minimum wage (as of 2012, it is PLN 1,500 gross), then the contributions are entirely covered by the state (that is, by ZUS); if the nanny’s pay exceeds the national minimum wage, then the contributions are shared between the parties of the contract (old-age pension and disability-pension dues), the parents cover the accident insurance dues, and the nanny pay for mandatory health insurance);
- nannies are responsible for paying the income tax themselves.
The Act sets no specific conditions that a prospective nanny must meet.
Outcome of evaluations: lessons and conclusions
Achievement of objectives
The exact number of active nannies has never been established, yet the estimated figure is around 200,000. Of those, some 50,000 were considered to be potentially interested in using the measure. Yet, fewer than 10,000 have registered with the social security in mid-2012. Thus, in numerical terms the effect cannot be judged as satisfactory. Nevertheless, the legal gateway to the formal economy has been created for persons rendering a type of care work for which there is a substantial demand.
Obstacles and problems
Major obstacles and problems stem from bureaucratic burden imposed by the law both on parents and nannies. The obligations put on potential employers, including such requirements as reporting monthly calculations of the social security contributions paid for the nanny to ZUS, do not encourage the employment relation between the parties.
While the immediate effect measured by the number of nannies registered with social security may be disappointing, the initiative should still be considered an important step in the process of paving the way for informal workers into official economy. The new initiative conceived by the government, which plans on introducing ‘contracts for occasional employment’ indicates that the experience with the measure has been regarded a positive lesson.
As of July 8,400 nannies had registered with ZUS, according to data disclosed by the social security. Provided the estimates regarding the volume of nannies actually active in the labour market are accurate, it would translate to roughly 4% of the general population of nannies, and some 15% of the target group.
The scheme serves as a signpost for a new initiative undertaken by the government, which is currently planning to step forward with a concept of ‘contract for occasional employment’ targeting workers rendering mostly domestic work (e.g. homemakers). ‘Contract for occasional employment’ would allow working for up to 20 hours a week, and all mandatory contributions to social security, healthcare, as well as taxes would be paid by the worker.
Social Security Institution (Zakład Ubezpieczeń Społecznych, ZUS)
Despite a mediocre response to the initiative, the government apparently considers it a valid point of reference for the latest initiative (a ‘contract for occasional employment’). While the results may not be overwhelming, as far as official statistics are concerned, the only viable alternative solution to the measure would be introducing some form of an intermediary (agencies hiring nannies and simply renting their services to the customers), because the capacity of public crèches is not likely to rise significantly in a foreseeable future.
The Act on Care of Children Aged Three and Less of 4 February 2011, [Ustawa z dnia 4 lutego 2011 r. o opiece nad dziećmi w wieku do lat 3], Sejm RP (in Polish)
Background note to the draft of the Act on Care of Children Aged Three and Less [Uzasadnienie do projektu ustawy o opiece nad dziećmi w wieku do lat 3], Chancellery of the Prime Minister (Kancelaria Prezesa Rady Ministrów, KPRM) (in Polish)
Social Diagnosis 2009 (2010), Subjective quality and objective conditions of life in Poland [Diagnoza społeczna 2009. Warunki i jakość życia Polaków], University for Finance and Management/ the Council for Social Monitoring (Wyższa Szkoła Finansów i Zarządzania/Rada Monitoringu Społecznego), Warsaw.
Unregistered employment in Poland in 2010 (2011), [Praca nierejstrowana w Polsce w 2010 r.], Central Statistical Office (Główny Urząd Statystyczny, GUS), Warsaw.
ZUS online services. Nannies step by step. The Guide for Parents [Serwis ZUS. Nianie krok po kroku. Poradniki dla rodziców], Social Security Institution (Zakład Ubezpieczeń Społecznych, ZUS)
Jan Czarzasty, The Institute of Public Affairs and Warsaw School of Economics