1st December 2022, the Polish Parliament adopted an amendment to the Labour Code – the Act on amending the Act – Labour Code and certain other acts (hereinafter: ‘the Amendment’), which introduces the long-awaited definition of remote work, while already formally allowing work to be performed in this form. Previous provisions found in the Labour Code referred exclusively to so-called ‘telework’, which is not entirely applicable to remote work performed today. The use of the telework formula is met with numerous restrictions, mainly due to the outdated nature of this form of work performance contained in the Act.
According to the statutory definition, remote work is work ‘performed wholly or partly at a place indicated by the employee and agreed with the employer on a case-by-case basis, including at the employee’s home address, in particular by means of direct communication at a distance’ – proposed Article 6718 of the Labour Code.
In addition to working entirely or partially remotely, the Amendment also contains proposed provisions on so-called occasional work. The government’s final findings indicate that the length of its provision has been set at a shorter period per calendar year (i.e. 24 days) than originally proposed – 36 days (or even the 52 days appearing in discussion).
As we read in the Explanatory to the Amendment: ‘(…) in response to the demands made at each stage of the discussion with the social partners by the employers’ organizations, the drafting authority also decided to regulate occasional remote work directly in the Labour Code. The regulation is aimed at ensruing the possibility of the so-called home office which, from the date of entry into force of the Act, will have to meet the criteria set out in the Labour Code for remote occasional work’.
Occasional remote work in the light of the Amendment
Referring to the criteria referred to above, it should first be pointed out that, in contrast to standard remote working, occasional remote working would be intended to provide employees working in an establishment with the possibility to work remotely in a place and circumstances agreed with the employer on an incidental and specific basis, justified solely by the employee’s interest. Pursuant to Article 6773 §1 of the Amendment, such an opportunity is to be granted to employees limited to 24 days per calendar year.
Due to the this incidentality nature, in the case of occasional remote working, the provisions on, i.a:
- Setting out the rules for such remote work in an agreement concluded with trade unions or in regulations,
- The provision of additional information on the employee’s terms and conditions of employment,
- The possibility for either party to effectively withdraw from the remote work,
- The provision by the employer of the materials and tools necessary to carry out the work remotely,
- The exclusion of the obligation to provide periodic training for employees employed in administrative and office positions, regardless of the employer’s predominant activity.
The above exemptions are intended to encourage employers to adopt a favorable attitude towards this form of work. Occasional remote working is undoubtedly intended to be a form more favorable to employees in emergency situations requiring them to be absent from their permanent place of work due to exceptional situations, and the exclusions indicated above are intended to further distinguish occasional remote working and differentiate it from partial remote working, while at the same time providing greater flexibility as to where the work is performed.
As a general rule, an employer will not be able to refuse remote working to, among others, parent who are raising a child up to the age of 4, parents and attendants who are caring for a person with a disability in the family and pregnant women. Unless this will not be possible due to the work organization or the type of work performed by the employee (e.g. uniformed services).
Only the employee may request the provision of occasional remote work and the employer should accommodate this request as far as possible (if the type of work permits). Furthermore, as some of the provisions on general/partial remote work are excluded in relation to occasional remote work, its conditions should be agreed with the employer on a case-by-case basis. Unlike full-time remote work, however, the employee will not be entitled to an allowance for incurring additional expenses.
To sum up, occasional remote work may be provided by an employee in an incidental situation, at the employee’s request and under the conditions agreed with the employer for this need, for a maximum of 24 days per calendar year, provided that the type of work allows it. Although the provisions themselves appear to be rather vague, this can prove to be a very beneficial solution for both employer and employee due to the possibility of using this ad hoc model.
Taxation of remote working allowances
Pursuant to the Amendment the provision by the employer to an employee performing remote work of materials and work tools, including technical equipment, necessary for the performance of remote work, the coverage of costs related to the performance of remote work by the employee and the payment of a cash equivalent or a lump sum do not constitute income for the employee within the meaning of the PIT Act.
The changes guaranteed by the Act are undoubtedly beneficial for employees, as the allowances paid in light of the Amendment, in the form of a cash equivalent or a lump sum, will not be subject to taxation. However, in order for these provisions to apply, the costs must be directly related to the use of the equipment necessary to perform remote work.
The amount of the lump sum is to correspond to the expected costs to be incurred by the employee. As indicated in the Amendment, when determining the amount of the allowance or lump sum, in particular the norms of consumption of materials and work tools, including technical devices, their documented market prices and the amount of material used the amount of material used for the employer’s needs and the market prices of this material, as well as the norms of consumption of electricity and the costs of telecommunication services are taken into account.
The above article is the first in a series in which we focus on the essence of presenting legal and tax complications of the context of performing remote work in Poland and abroad. As part of the series, we will address the most frequently asked questions by clients regarding home office, workation and remote working.