Increasing numbers of employers break wages law

A report from the National Labour Inspectorate highlights the increasing number of employers in Poland who do not comply with the law on the payment of wages to their employees. The report compares data from inspections during the first half of 2010 with data from inspections in the first half of 2009. Almost 19% more employers were in arrears with payments in the first half of 2010 than in the first half of 2009; the total of overdue payments increased by 62% in the same period.

A report from the National Labour Inspectorate (PIP) – Przestrzeganie przepisów w zakresie wypłaty wynagrodzeń (101Kb PDF) – provides information on the compliance by Polish employers with the law on the payment of wages to their employees during the first half of 2010 compared with the same period in 2009.

Methodology

The data below are based on the reports from 50,500 inspections carried out by PIP in the first half of 2010 and 42,300 inspections in the same period of 2009. The inspections, which were carried out in companies throughout Poland, are a part of the statutory duties of PIP as defined in the Act of 13 April 2007 on National Labour Inspectorate (207Kb PDF). Under the act, PIP’s supervision and inspection covers:

• all employers;

• all entrepreneurs who are not employers but who have people who do work for them, irrespective of the reason for performing such work.

Since 1 July 2007, the supervision also covers people carrying out economic activity on their own account (that is, self-employed workers).

Information on payment of wages

According to the report, almost 19% more employers were in arrears with payments in the first half of 2010 than in the first half of 2009.

The number of cases of non-payment of wages to employees in the companies visited by labour inspectors in the first half of 2010 was almost a fifth higher than in the same period of 2009. In the first half of 2009, payment was overdue in 45,600 cases; in the same period of 2010, PIP found 54,200 cases of non-payment of wages in Polish enterprises.

The total of overdue payments increased by almost 62% between the first half of 2009 and the same period in 2010. The total amount of unpaid wages increased from PLN 68 million (about €17.25 million as at 5 January 2011) at the end of the first half of 2009 to PLN 110 million (€27.9 million) at the end of the same period of 2010.

PIP’s inspectors reported the worst situation with regard to the delayed payment of wages among employers from the Polish provinces or administrative divisions (voivodeships) of Opole (Opolskie), Lublin (Lubelskie), Masovia (Mazowieckie) and Pomerania (Pomorskie). The situation of workers improved in the provinces of Subcarpathia (Podkarpackie), Lubusz (Lubuskie) and Silesia (Śląskie).

The inspectors also reported an increase in the number of employers who infringed on the wages and remuneration regulations. Their number rose from 9,200 in the first half of 2009 to 9,800 in the first half of 2010. A total of 17,100 such infringements were reported for the whole of 2009.

Penalties and fines

The non-payment of wages is an offence against the rights of employees. According to the Labour Code, a fine of PLN 1,000 to PLN 30,000 (€254–€7,611) can be levied on an employer who:

• does not pay wages and other benefits within the fixed term to employees or entitled family members;

• improperly reduces the amount of wages or benefits;

• introduces pay cuts for no good reason.

Following the inspections carried out in the first half of 2010, labour inspectors imposed 3,239 fines for offences against the rights of employees. This was 88 more than in the same period of 2009. In the whole of 2009, 6,137 fines were imposed totalling PLN 11.5 million (€2.9 million).

Inspectors also handed out 1,287 cautions in the first half of 2010, which was 180 more than in the first half of 2009. In the whole of 2009, 2,254 admonitions were given.

Labour inspectors initiated 858 prosecutions during the first half of 2010, 164 more than in the first half of 2009. For the whole of 2009, the number was 1,557.

PIP has declared it would intensify inspection activities with respect to the observance of labour law. Only those employers suffering financial hardship as a result of the floods of spring 2010, which destroyed infrastructure and caused many problems for companies in some parts of Poland, or who can provide evidence of a very difficult economic situation, can count on milder treatment by labour inspectors.

Trends/changes over time

The number of employers who do not pay wages promptly has been growing year on year. These alarming figures came from the most recent report prepared by PIP for the first half of 2010 and from earlier reports for 2009, 2008 and 2007 on compliance with the law as regards payment of wages.

The number of aggrieved employees in 2006–2008 totalled 188,834. The total for 2009 was 86,300 and the figure for the first half of 2010 was 54,200.

The amount of unpaid wages for 2006–2008 stood at PLN 283.2 million (€71.9 million), whereas it was PLN 142 million (€36 million) at the end of 2009 and PLN 110 million (€28) at the end of the first half of 2010.

Ewelina Kuźmicz, Institute of Public Affairs (ISP)