Expanding to Poland with an EOR: A Step-by-Step Guide

Expanding to Poland with an EOR – Effortless business growth

The future today indicates that Poland is becoming the preferred destination for business growth in Europe due to the well-trained labor force, location advantage, and a continuously improving economy. As more companies strive to enter this promising market, recruitment of employees in Poland also presents unique challenges, especially in legal compliance of payroll services and Polish employment legislation. Foreign businesses aiming to set up operations in Poland can face legal formalities that will take a considerable amount of time to complete.

This is where an Employer of Record (EOR) comes in as a solution that breaks barriers to expansion. Expanding to Poland with EOR makes it easy to expand to Poland because it manages employment contracts and remuneration as well as Polish labor laws. To avoid the necessity of creating a legal entity in the country, businesses can consider expanding to Poland with an EOR.

This blog explores the benefits of expanding to Poland with an EOR, covering key aspects like Poland employee leasing vs. EOR, hiring in Poland without a legal entity, expanding your business to Poland, and legal employment in Poland for foreign businesses.

Polish employment legislation and payroll services require strict adherence to the Polish Labour Code gov.pl, making legal compliance a critical aspect of expanding to Poland.

What is an EOR and how does it work in Poland?

What is an EOR and how does it work in Poland? An Employer of Record (EOR) is a third-party employer that hires employees on behalf of a company with operations for example in Poland. The business maintains visibility and managerial control over its workers while the EOR is responsible for the legal and administrative aspects of employment. This comprises of employee remuneration, tax deductions, employee benefits administration, and adherence to the country’s employment regulations.

For all the organizations that want to start their international expansion to Poland, it is vital to know what is an EOR and how does it work in Poland? EORs make sure that the company adheres to the Polish employment laws since they provide for employment contracts, probationary periods, working hours, and how employees can be let go. They also handle the benefits for the Polish Social Insurance Institution (ZUS), which you can find here, that is in charge of social security and health insurance. Also, an EOR is responsible for timely payment of employees’ wages and remitting employee statutory benefits that include paid leaves, workplace accident insurance, and paid parental leave.

Benefits of using an EOR in Poland

Expanding to Poland with EOR offers significant advantages. EOR brings ease in the process of recruitment, besides guaranteeing jurisdictional conformity; it is therefore the best rationality for all those companies who aim at shortening their growth cycle in a given market and doing it in a cheap method. Let`s discuss the key benefits of expanding to Poland with EOR:

  • Compliance

First of all, companies that work with EORs employ a range of activities with strict compliance with Polish labour law and EU regulations regarding employment contracts, tax deductions, and contributions to social security institutions such as ZUS. This assists companies to prevent fines and embrace legal issues.

  • Speed

Expanding to Poland with EOR is easier– all while being able to hire employees without the need of establishing a legal entity, which may take months. This guarantees the employer quick access to the best talents in Poland.

  • Cost Savings

Establishment and continually operating a legal entity in Poland requires a series of investments in the initial stage and ongoing cost. EORs eliminate such costs making them a cheaper model for recruiting employees as opposed to hiring directly.

  • Local Expertise

Further, EORs rely on their vast experience in the Polish HR, tax, and legal environment to coordinate such delicate issues as contract signing and termination, calculations of salaries and other benefits, etc. Such knowledge guarantees a smooth process for both sides, the employer and the employee.

  • Scalability

EOR is especially useful in scaling up because it allows the growth of a company’s workforce either gradually or rapidly. Hiring and firing practices do not require the involvement of bureaucratic procedures and firms are free from legal entanglements.

If legal employment is to be managed efficiently in Poland, it is important to hire an EOR since it is the fastest and most efficient method of doing so, allowing business to concentrate on their core activities, while the complexities of local compliance are handled by the experts.

Poland Employee Leasing vs. EOR

Poland employee leasing vs. EOR: these two are solutions for hiring in Poland. However, their functions and services are quite different.

So let’s break down Poland employee leasing vs. EOR. Employee leasing is the process whereby employees are sourced from a leasing company that is responsible for their hiring, remunerating them, and managing their affairs. In this model, the leasing agency becomes the legal employer of the employees while the business acquires a temporary workforce. Employee leasing is usually applied in temporary projects or used to fulfill a current staffing requirement.

An EOR is responsible for performing the legal employer’s functions on behalf of a company but with the aim of offering long-term employment and effective compliance management. EORs are involved in employment contracts, taxes, payrolls, and benefits but do not interfere with the operational authority of employers over employees.

Pros and Cons Employee Leasing

Pros:

  • Good for short-term requirements.
  • Easier to reduce the number of people employed.

Cons:

  • Poor match when it comes to long-term employment of the employees hired.
  • Lack of an effective control of employee affairs.

EOR Services

Benefits of working with an EOR:

  • Facilitating compliance with the labor laws of Poland and regulations of the EU.
  • Is consistent with sustainable and large-scale staffing.
  • Appropriate for getting workers without registration of an enterprise.

Why choose an EOR?

When expanding your business to Poland employee leasing vs. EOR, foreign businesses benefit more from EORs. While similar to employee leasing, an EOR offers the full solution for legal employment, payroll, and compliance, which is more beneficial for long-term development and mitigating legal issues in Poland.

Legal and compliance challenges in Poland

Navigating legal employment in Poland for foreign businesses can be complex due to strict labor laws and regulatory requirements. Currently, the employment contract provisions, probation, working hours, and termination regulations are regulated by the Polish Labor Code. Sanctions that can be pulled off are severe penalties in form of fines from the National Labour Inspectorate.

Another significant factor is that employers need to pay to the Polish social insurance institution or ZUS. This entails such costs as the social security costs for employees, costs of medical insurance as well as pension costs. Errors in payroll or tax returns may lead to fines, and unanticipated organizational interruptions.

Failing to meet employment contract standards outlined in the Polish Labour Code gov.pl can result in fines from the National Labour Inspectorate.

Hiring in Poland without a legal entity

Hiring in Poland without a legal entity can save businesses significant time, costs, and bureaucratic hassle. Polish legislation provides numerous procedures to establish a legal entity and operate it without violating the local legislation on labor and taxation. This may take months and involve deep grassroots understanding making it a non-viable solution for organisations seeking fast growth.

Employer of Record (EOR) is a far better approach to the challenge described above. An EOR enables companies to employ individuals in Poland while avoiding the setup of a subsidiary entity, dealing with all legal and administrative requirements, including payroll and benefits, on behalf of the company.

EOR vs. Legal Entity

EOR: Simple to deploy, affordable for small to mid-size teams, and compliant with local Polish legislation and EU restrictions.

Legal Entity: Capital intensive and requires a lot of attention to administrative work.

Hiring process with an EOR

  • Employ an EOR that has knowledge and understanding of Polish employment laws.
  • Present required employee data (e.g., PESEL number, ZUS forms).
  • Negotiate and sign the employment contracts that will correspond to Polish legislation.
  • EOR takes care of payslips, taxes, and employee benefits.

Steps to legal employment in Poland for foreign businesses

Step 1: Choose an EOR

There are important considerations that go into choosing an EOR. When you choose your provider, make sure it has no compliance issues, provides a high level of data security, and has a fast speed for customer support. They should ideally have strong knowledge about the labor laws of the Polish nation as well as skills in dealing with complicated human resource management issues.

Step 2: Employee onboarding

Among the documents collected by the EOR are the PESEL and ZUS forms. They also draft employment contracts which are legal in accordance with the Polish labor law and these include working hours, probation period, and rights of employees.

Step 3: Running payroll

The EOR takes full responsibility for taxation; withholding, social security contributions, and monthly payslips as per the existing Polish laws.

Step 4: Managing benefits

EORs deal with statutory deductions such as pension, health insurance, and sick pay and can also address other bonuses in line with company regulations.

Therefore, when understanding what an EOR is and how it functions in Poland, employers can hire with ease while maintaining legal requirements.

Final Thoughts

Expanding to Poland with EOR is the safest method to operate in an international market. This means that by addressing the issues of compliance with Polish labor laws, payroll services, and employing expert knowledge of the local legislation, an EOR does not require the formation of a legal entity. This is important as it eliminates a lot of time and cost while decreasing the level of administrative problems.

Consulting EOR services is a wise decision for companies that aim at expansion and do not want to face legal or administrative issues.

Discover the range of EOR solutions to ensure your expansion to Poland is effortless. If you are thinking of expanding to Poland with an EOR, don’t hesitate to contact our company. Our experts are more than happy to assist and consult you regarding your needs and wants.

FAQ

  1. What are the benefits of using an EOR in Poland?

Expanding to Poland with EOR makes it easier by overseeing the Polish labor laws, compensation, and taxes. It also does away with the need to set up a legal entity thus cutting on both time and costs. They offer local knowledge, assist in taxes, and manage employee benefits while offering flexibility to rapidly growing companies that are entering Poland.

  1. How does an EOR simplify business expansion to Poland?

An EOR simplifies outsourcing for a new market in Poland by becoming the legal employer of record for your employees. This covers such matters as remunerations and allowances, deductions especially taxes and other provisions in Polish employment legislation. This enables business entities to find employees faster and concentrate more on business without encountering legal formalities.

  1. What are the legal requirements for hiring employees in Poland through an EOR?

In Poland, companies that recruit employees through an EOR must adhere to Polish legislation. EORs draft employment contracts that are compliant with the Polish legislation, report, and pay mandatory contributions to the Polish Social Insurance Institution (ZUS), and guarantee compliance with legislation on working hours, probation periods, and termination.

  1. Can an EOR handle payroll and tax compliance in Poland?

Yes, an EOR fully assumes the responsibilities of payroll and tax regulations in Poland. They pay the salaries of the employees, deduct taxes, and health insurance, among other deductions. This helps to meet the Polish and EU legislation, which is important due to the potential penalties for non-compliance by businesses.

  1. How does an EOR in Poland support employment contracts?

An EOR is responsible for drafting employment contracts consistent with Polish labor laws. Such contracts contain elements such as the number of hours worked, wages, and remunerations. Thus, the EOR assists businesses in legally employing employees in Poland, without the need to register a legal entity.



Article Author – Gino Peters

Gino Peters is the Commercial Director at ThisWorks, with a rich history of nearly a decade in international payroll. Throughout his tenure, he has consistently kept abreast of evolving labor legislation, ensuring that ThisWorks remains at the forefront of industry knowledge. Beyond his vast expertise, Gino is deeply committed to advising and guiding clients and partners with precise insights. His leadership guarantees that all content and operations at ThisWorks meet the highest standards of clarity, accuracy, and compliance.
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