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A good many changes to contracts of mandate

06.02.2017

On 1 January 2017, the amendments to the Minimum Wage Act came into force. An important novelty is the introduction of a minimum hourly wage for each hour spent to perform a mandate or render a service. The minimum hourly wage in 2017 is PLN 13 gross.

Apart from a minimum hourly wage, the legislation introduces an obligation to record the time spent to perform tasks under a contract of mandate or a service contract.

A minimum hourly wage and an obligation to record the tasks performed, do not apply to all civil law contracts; specific task contracts and agency contracts are excluded.

The amended legislation provides for an obligation to apply a minimum hourly wage and keep working time records with respect to: contracts of mandate under (Article 734 Civil Code) and service contracts which are not regulated by separate provisions and to which the provisions on mandate apply accordingly (Article 750 Civil Code). Therefore, minimum wage applies both to the contracts concluded by sole traders as part of their business, unless they hire employees or entered into a service contract with a mandatee, and to the contracts performed outside of such activity.

Minimum hourly wage apply regardless of the agreed basis for computing contract remuneration: flat rate, hourly rate etc. Further, it does not matter whether the remuneration has been agreed in daily, weekly or monthly rate.

A mandatee and a service provider cannot waive their right to remuneration resulting from the minimum hourly rate or transfer their right to remuneration to another person. Furthermore, the payment of remuneration resulting from minimum hourly rate should be made in cash, at regular intervals. With respect to contracts concluded for a term exceeding 1 month, the remuneration should be paid at least once a month.

The parties to contracts of mandate or service, are obliged to specify in the contract the manner of recording the time spent to perform a mandate or provide a service. Where the parties have failed to comply with this obligation, the mandatee or service provider should provide information about the time spent to perform the mandate or provide the service (in written, electronic or documentary form), prior to the date of payment of remuneration.

If the contract has not been concluded in written, electronic or documentary form, a business entity or other organizational unit should, before the commencement of mandate or service under such contract, confirm to the mandatee or services provider (in written, electronic or documentary form) the manner of how the hours of mandate or service will be recorded.

If several person accepts a mandate or commits to jointly provide services, the time spent to perform a mandate or provide a service should be recorded separately for each such person.

A business entity or other organizational unit in favour of which the mandate or services are performed, is obliged to keep the documents specifying the manner of recording time spent to perform a mandate or a service as well as documents evidencing the time spent to perform a mandate or a service for a period of 3 years of the date the remuneration has become due and payable. This includes: a contract or its confirmation in the case of oral agreement, bills, invoices, information or reports provided by the mandatee pursuant to Article 740 Civil Code, and working time records kept by the principal if the parties to the contract so agreed.

If the business entity in favour of which the mandated tasks or services are performed, defaults on its duty to pay the remuneration resulting from the minimum hourly rate, a mandatee or a service provider are still entitled to remuneration calculated according to that hourly rate. Additionally, the National Labour Inspectorate may impose a fine from PLN 1,000 to PLN 30,000 on such entity.

Marta Walędziak-Skowrońska
Legal Adviser

TGC Corporate Lawyers®

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