Employment of migrant workers without work permits, Poland

About

Country: 
Poland
Target Groups: 
workers/suppliersemployers/purchasers

After joining the European Union in 2004, Poland effectively closed its borders to citizens of non-EU countries willing to take up legal employment. As workforce shortages continued to rise in Poland, the government introduced new regulations regarding admission of foreign workers to the domestic labour market. Under these new regulations, citizens of neighbouring countries are allowed to officially work with no work permits required for limited periods of time. Previously, a foreign worker was able to work for three consecutive months during six consecutive months, while the new regulation extends this work period to six consecutive months during 12 consecutive months.

Background

Following the enlargement of the EU in 2004, Poland as well as the other new Member States had to comply with EU rules and regulations regarding entry to, and stay in, its territory by people from outside the EU and, in particular, to prepare for the forthcoming inclusion of the country in the Schengen zone. Subsequently, the number of citizens of neighbouring countries such as Belarus and Ukraine working in Poland significantly decreased due to the new, more restrictive visa regime. Prior to Poland’s EU accession, there had been a noticeable presence of migrant workers in Poland. While no undisputed data is currently available, estimates on the number of migrant workers in Poland prior to 2004 varied from 50,000 to 350,000 workers. Many of these workers – due to legal constraints – could find employment only in the informal economy. As the influx of foreign workers coming to Poland diminished, a wave of emigration of Polish people began towards the older EU countries – mainly the United Kingdom and Ireland.

This forced the Polish government to seeking solutions to fill the gap in the labour market while, at the same time, attempting to devise a formula that would preserve control over the process of migrant workers entering the domestic labour market and effectively prevent them from slipping into the informal economy. As a result, the government undertook to amend the Act on employment promotion and labour market institutions.

In 2006, the Ministry of Labour and Social Policy issued the Ordinance on conditions for employment of foreigners without work permits, by virtue of which citizens of Poland’s neighbouring countries of Belarus, Germany, Russia and Ukraine were granted permission to perform short-term work in the territory of Poland without a work permit. Once a Polish employer notified a regional employment office of his or her intention to hire a foreign citizen, a potential worker could apply for a visa entitling them to legal employment in Poland on presentation of a document confirming the registration at a Polish consulate in his or her native country. A decision to include Germany in the new regulations was mainly due to the fact that the national labour markets of Poland and Germany were still partially closed due to interim periods in opening up the labour market request by Germany prior to EU enlargement in 2004, which were still running.

A foreigner could work in Poland up to three months within six consecutive months. As the initial results of the new regulation proved promising, in early 2008 the Ministry of Labour and Social Policy (Ministerstwo Pracy i Polityki Sołecznej, MPiPS) decided to amend it in favour of foreign workers, who could now work up to six months within twelve consecutive months.

Under the new regulations, the actors responsible for providing assistance to parties interested in taking up the opportunity to hire foreign workers include the employment administration, particularly the District Employment Offices (Powiatowe Urzędy Pracy, PUP) and the Polish diplomatic service. The employment offices are are responsible for the registration of ‘declarations of intent’ submitted by employers wishing to employ a foreign worker, while the diplomatic service is charged with issuing particular types of visas with a right to work to foreign citizens named in the declarations of intent.

Objectives

The main objective set by the government was to attract foreign workers to the Polish labour market. Moreover, the organisations involved aimed to prevent the migrant workforce from slipping into the informal economy.

Specific measures

Under the original ordinance, in force from July 2007 until January 2008, a foreign worker was able to work for three consecutive months during six consecutive months.

Under the new regulation, as currently in force, a foreign worker may work for six consecutive months during 12 consecutive months.

A potential employer is expected to submit a declaration of intent to employ a foreign citizen of one of the countries specified in the ordinance to the local employment office. Once the declaration is registered, a document confirming this fact is delivered to the potential worker who then presents it at a Polish consulate in their native country in order to receive a visa of a particular type entitling its holder to take up employment in Poland.

Evaluation and outcome

Achievement of objectives

The arrangement has, so far, met with positive reactions from the local labour market and the foreign workforce, as indicated by the number of migrant workers availing of the initiative. So far, the main objective of the regulations seems to have been accomplished, at least with regard to attracting foreign workers to Poland. However, as it is more difficult to keep track of guest workers already present in Poland, it remains unclear whether the objective of preventing migrant workers from slipping into the informal economy has been attained.

Obstacles and problems

A major obstacle to the inflow of guest workers from neighbouring countries seems to be the insufficient capabilities of the Polish diplomatic services in those countries. As a result, the visa application process is relatively time-consuming. Another difficulty met by foreign workers is the time necessary for delivery of the confirmation of the ‘declaration of intent’ to a consulate. Furthermore, the relatively low efficiency of border crossing points has also proved to be a problem as this creates bottlenecks. Even though the current regulations are more favourable for foreign workers, the necessity for these workers to regularly alternate between the two countries presents a serious problem not only for employees, but also for employers as it prevents development of more stable employment relations between the two parties. It can be assumed that highly skilled workers may be discouraged by the latter hindrance. The burden of the administrative procedure associated with the registration of ‘declarations of intents’ on employers seems to be of lesser significance.

Lessons learnt

On the one hand, the statistics suggest that the introduction of the new regulations has proved to be a success as the number of foreign workers invited by Polish entities to take up employment in Poland reached up to 50,000 workers in mid 2008. On the other hand, it must be emphasised that the statistics reflect only the number of ‘declarations of intent’, which should not be confused with the actual number of workers undertaking employment in the Polish labour market. Even in the case of a foreign citizen to whom a ‘declaration of intent’ is issued, allowing him or her to obtain a visa and eventually cross the border into Poland, it still cannot be precisely established whether the worker actually commences work with the employer which has issued the declaration. In fact, the procedure may be seen and used by some workers as a ‘back door’ entry to the Polish labour market – once a person successfully enters the country, he or she may still be tempted by the prospect of performing informal work. For this reason, while the new regulations have definitely produced some promising results, they have not solved the problem of undeclared work performed by foreigners in Poland. As long as the primary incentives are present, namely the wage gap between Poland and the native countries of migrant workers as well as the mandatory public dues (taxes and social security contributions), and both are very unlikely to disappear, establishing labour relations in the ‘informal economy’ allows both sides involved to maximize their immediate profits. Therefore, the phenomenon of foreign workers undertaking illegal employment cannot be expected to completely disappear as a result of the new regulations.

Impact indicators

According the official data collected by MPiPS from the regional employment administration, the number of foreign citizens employed by domestic employers from 20 July 2007 until the end of the second quarter of 2008 increased steadily. A noticeable drop occurred in the third quarter of 2008; at present; the reasons behind this downturn cannot be determined. The statistics track the number of declarations of intention to employ a foreign worker from Belarus, Russia or Ukraine. Not surprisingly, the vast majority of foreign workers employed from the third quarter of 2007 to the same period in 2008 were Ukrainians (see table below).

Number of registered ‘declarations of intent’, 3rd quarter 2007 to 3rd quarter 2008
 

3rd quarter 2007

4th quarter 2007

1st quarter 2008

2nd quarter 2008

3rd quarter 2008

Total registered declarations 9,211 14,073 39,100 50,698 39,724
Total workers from Ukraine 8,530 13,152 36,632 46,728 35,419
By sector          
Agriculture 2,766 4,022 17,799 28,856 19,982
Construction 2,657 3,395 7,441 7,026 5,483
Domestic work 241 837 2,116 2,133 1,981
Type of employment          
Temporary agency work 247 483 2,117 2,822 2,828

Source: Ministry of Labour and Social Policy, Department of Migration, October 2008

Transferability

The current regulation should remain in force until the end of 2009, with the perspective of extending or replacing it with a new regulation concerning the issue. For that reason, a comprehensive evaluation of the efficiency of the law will certainly be carried out next year. It may be assumed that the decision on whether to continue or terminate the policy will largely depend on the state of the Polish labour market. If the gaps on the supply side of the labour market remain wide, the regulations are likely to be retained in their present shape, or even to become more liberal. However, in the probable event of unemployment rising due to the expected economic slowdown, the political climate may become too hostile for continuation of the current policy. It is extremely unlikely that the arrangement can be replicated for citizens of other non-EU countries, especially ones from outside Europe – such as China.

Commentary

To date, the experiences with the specific ‘shortcut’ to the Polish labour market that the government ordinance provides to citizens of neighbouring countries have been promising. At present, no signs are visible that the policy could be discontinued. However, as the first symptoms of an economic downturn are emerging, the questions arises regarding whether and to what extent the additional supply of labour would be in demand next year. Considering that a large number of guest workers find employment in construction, which is usually an economic sector to suffer significantly in times of stagnation, Polish employers in the construction sector may become less interested in hiring workers from abroad. Paradoxically, a decrease in the number of foreign workers coming to Poland may serve as an argument to continue the policy – even if the unemployment rate starts rising again – as calls for protection of the national labour market can be then disregarded as pointless.

Contacts

Ministry of Labour and Social Policy (Ministerstwo Pracy i Polityki Społecznej, MPiPS)

Regional Employment Offices (Powiatowe Urzędy Pracy, PUP)

Ministry of Foreign Affairs (Ministerstwo Spraw Zagranicznych, MSZ)

Bibliography

Background information to the draft Ordinance of the Minister of Labour and Social Policy on conditions for employment of foreigners without work permits [Uzasadnienie do projektu rozporządzenia Ministra Pracy i Polityki Społecznej w sprawie wykonywania pracy przez cudzoziemców bez konieczności uzyskania zezwolenia na pracę], 2006.

Ministry of Labour and Social Policy, Number of ‘declarations of intent’ registered by regional employment offices upon submission by entities wishing to employ a foreign citizen from 3rd quarter of 2007 to 3rd quarter of 2008, Internal statistics, Department of Migration, October 2008.

Ordinance of the Minister of Labour and Social Policy on conditions for employment of foreigners without work permits [Rozporządzenia Ministra Pracy i Polityki Społecznej w sprawie wykonywania pracy przez cudzoziemców bez konieczności uzyskania zezwolenia na pracę], 2006.

Jan Czarzasty, Institute of Public Affairs (ISP)

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