Polish companies put in jeopardy amid French proposals to EU law

Changes in EU regulations regarding social insurance for employees advocated by France might have a negative impact on thousands of Polish companies offering their services abroad, as well as on the Polish Social Insurance Institution (ZUS).

According to the Labour Mobility Initiative (IMP), this may be caused by a seemingly minor change in the definition of the enterprise's headquarters that is to be included in the new regulations regarding social insurance for employees working in numerous EU countries throughout the year.

As it stands, workers are insured only in the country where their employer has a registered office. France, on the other hand, proposes another solution: to consider the country where the company records the majority of revenues and its employees work for the most in the given year as the actual headquarters of an enterprise, even if it is registered in another country.

Marek Benio, the deputy head of IMP believes that the adoption of this proposal will hit companies hard from the so called “new EU countries” (that joined after 2004) that have been successful in providing their services abroad and recording most of their revenues there.

The changes would also affect ZUS, which would lose hundreds of millions PLN annually in the aftermath of these changes. The economy would also lose out, because some companies, unable to pay social contributions in Poland, could move their headquarters abroad.

As estimated by IMP, this technical change in regulations may affect around 30-45,000 Polish companies that permanently hire employees in at least two EU countries. The employees themselves will also lose out, because in the event of illness, accident or retirement, they will have to seek benefits abroad, sometimes even in several countries. Mr Benio stated that he hopes for the joint mobilisation of the government and business sector in the fight against the French project.

Poland is the EU leader in offering transborder services. According to the Family, Labour and Social Policy Ministry, Polish job agencies issued permissions for work abroad for around 163,000 people, mainly to the Netherlands and Germany.