The civil law contracts are a special category of atypical contracts used to contract labour in Poland. There are two main types of civil law contracts: the contract to perform specified work (umowa o dzieło) and the contract of mandate (umowa zlecenie). The latter is more popular than the former. The number of workers with civil law contracts in Poland has increased substantially since the early 2000s. The incidence of other forms of temporary work - fixed-term employment contracts, temporary agency work - has also risen, but civil law contracts imply an especially acute form of labour market segmentation because they're much less regulated than other temporary contracts. This applies both to protection against dismissals and worker rights such as paid leave or the right to join trade unions, and to social security coverage. Due to lack of data on civil law contracts, it is difficult to assess precisely the number of people working under civil law contracts. According to the LFS data, in 2016 there were 510,000 people working under civil law contracts (in their main job) which is equivalent to 3.1% of total employment in Poland. Among them, 429,000 people worked solely under a contract of mandate, 36,000 people worked solely under a contract to perform specified work, 22,000 people worked under another type of a civil law contract (such as a managerial contract), and 22,000 combined various types of civil law contracts. Data from personal income tax records published by the Ministry of Finance show that in the last few years approx.1 million people has been earning income only on the basis of civil law contracts. The tax records also show that the number of such people has doubled since the early 2000s. Individuals working under civil law contracts tend to be less educated than individuals working under employment contracts. The incidence of civil law contracts is the highest among young workers but it is also noticeable among workers aged over 50. Women constitute majority of workers under civil law contracts, but once the effect of education, age and occupation is taken into account, women are not more likely than men to work under civil law contracts. The highest incidence of civil law employment is found among low skilled occupations: elementary occupations, and services and sales workers. The sectors which records the highest incidence of civil law contracts are accommodation and food services, and business support services which include temporary work agencies. The prevalence of these contracts is the highest among small firms (with less than nine workers). Besides employment in call centres, the expansion of civil law employment cannot be associated with the expansion of digital economy. Workers under contract of mandate earn less than workers under employment contract. It is due to lower hourly wage and larger incidence of part time employment. The median hourly wage of individuals working under contract of mandate is by 25% lower than the median hourly wage of individuals on employment contract. Individuals working under contract of mandate can be either exempted from social security and public health insurance contributions in some circumstances (if they are students aged up to 26 years), or can pay lower contributions than they would pay if they earned the same net income under an employment contract. Individuals working under contract to perform specified work are exempted from all social security and public health insurance contributions - this group might not be covered at all. However, more than half of them has probably access thanks to other means, mainly because of an employed spouse. After a raft of changes which have been introduced since 2015 to improve access of workers with civil law contracts to unemployment benefits and maternity benefits. The social security contributions which pertain to civil law contracts have also been increased, although they are not yet identical to contributions pertaining to employment contracts. The key challenge related to social security coverage is in expected low retirement pensions. In the Polish defined-contribution system, low contributions of workers with civil contracts will translate into low pensions even if these workers spend only a share of their careers working under civil law contracts. Estimates show that the pension gap will be about 17%. The recent changes in contribution rules have closed it only to some extent. Many of these workers will be receive minimum pensions which will have to be subsidised from general taxation. Lower contributions paid by civil law contract workers aggravate the deficit in the pension system. On the other hand, individuals working under civil law contracts contribute more in the sickness and accident insurance contributions than they receive in sickness, carer and rehabilitation benefits, and maternity allowances. In aggregate terms, they cross-subsidise other groups, in particular the self-employed.
