Running an employment agency in Poland
Recruitment agencies that provide assistance to companies in the selection of job candidates or help employees to find a convenient workplace, operate all over the world. Companies of this type in Poland are called employment agencies. However, running this kind of business in Poland is subject to certain rules, described in the Act of 20 April 2004 on employment promotion and labor market institutions (“Act”). What are these rules? You will find out in this article.
National Register of Emplyment Agencies (KRAZ)
The activity of an employment agency is a so-called “regulated activity”, which means that before starting the recruitment activities, the company must enter into the relevant register (separate from the general commercial register) – National Register of Employment Agencies (KRAZ)
So, if you intend to run an employment agency in Poland, once you set up a company, your first and basic step is to register your company in KRAZ.
Registration in KRAZ is made upon written or electronic application. The application is submitted to the Voivodship Labour Office, competent for the registered office address of the agency. In the application it is required to provide, among others:
- company name;
- registered office address of the company;
- address of the premises where the agency services are provided (if it’s different than the registered office address);
- contact telephone number of the agency (there is no requirement for it to be Polish phone number);
- type of services provided by the agency.
Registration in KRAZ is made within 7 days from the date when the application is received by the relevant office. The agency may start its recruitment activities once it enters into KRAZ register. Acting as employment agency without registering with KRAZ is a criminal offense!
Upon entry into KRAZ, the company gets its unique number in the register. This number must be included in all company contracts and documents related to activity as an employment agency, for example job offers and adverts, company website, e-mail footers and contracts with both employers and candidates. Any changes of the agency’s data visible in KRAZ must be reported to the relevant office within 14 days (this applies in particular to: company name, registered office address, premises address, telephone number).
Virtual office? Not for the employment agency.
In today’s world, it is customary to register a company at a virtual office address, i.e. to hire only a registered address from an external entity.
However, in case of the employment agencies this may cause the problem, as the Polish Act explicitly requires an employment agency to have premises where its services are provided (article 18fa of the Act). Therefore, in Poland it is not allowed for the employment agency to have only a virtual office (without the right to use any premises at the registered office address). Obviously, it is not prohibited for an agency to have a registered address in a virtual office and premises where services are provided in another location.
Type of services
In the application for registration with the KRAZ, it is mandatory to indicate the type of services provided by the Agency.
The Act distinguishes four categories of these services:
- job placement services;
- personal consulting services;
- career guidance services;
- temporary employment agency services.
No fees from the candidates
One of the basic principles of running an employment agency is the prohibition of charging candidates with any fees for services rendered to them.
The only exception is when the agency directs the candidate to work abroad for foreign employers – in that case, the agency can only charge candidates with fees related to the actual costs associated with the direction the candidate to work abroad, incurred for:
- travel of the candidate (abroad and return to Poland);
- issuing a visa,
- medical examinations,
- translation of documents;
Charging the candidate with any other fees is a criminal offense, punishable by a fine up to 3000 PLN.
Since employment agencies are regulated activities, the agency is bound by an annual report obligation. Each employment agency is required to submit reports on its activities to the relevant Voivodship Labour Office. The report must be submitted by 31 January each year, for the previous year. The report must be submitted on an official form, provided by the public authorities.
Compliance with the obligation of an annual report is extremely important as if the report is not submitted it is a ground for removal of the agency from KRAZ with a 3-year ban on re-entry.
The report must indicate:
- the number of persons who took up employment through the agency – this information must include the occupational groups of employees (according to the public statistical classifications in force in Poland);
- the number of employers and employees using the counseling services provided by the agency;
- the number of temporary employees who took up temporary work through the agency;
Labor inspectorate audit
Another consequence of the regulation of the employment agency sector is the possibility of periodic audits of the agency conducted by the Polish Labour Inspectorate authorities. The audit usually takes place once a year or once every two years and is carried out by Labour Inspectorate auditors in the agency’s premises. It is important to note that the audit does not require prior notification by the Labour Inspectorate (although prior notification is often used). During the audit, the agency must provide the Labour Inspectorate auditors with documents related to its activities. As part of the audit, the Labour Inspectorate examines whether the company complies with the rules for running an employment agency and the rules for the recruitment process (depending on which services the agency provides).
In the event of non-compliance with these rules, the Labour Inspectorate may (depending on the gravity of the non-compliance):
- oblige the company to remove the non-compliance (if the company fails to do so, it will be removed from the KRAZ register) or
- remove a company from the KRAZ register – in that case, the company may apply for re-entry into KRAZ after 3 years.
Since you’ve made it this far, it means that the topic of employment agencies really interests you. So, let me introduce you to some basic rules of providing certain services by an employment agency in Poland.
Directing candidates to work abroad
Directing candidates to work for foreign employers is a special type of job placement service that employment agencies can provide. In this case, the agency is required to complete some additional formalities. First of all, before sending a candidate abroad, the agency must inform the candidate about the costs, fees and other charges related to taking up work abroad (including any fees mentioned above that the agency may exceptionally charge). This information must be given in writing! (a verbal communication or an e-mail will not be sufficient). Such costs may be, for example, costs of accommodation, meals, costs of registration of stay in the country of work, insurance costs, etc.
Moreover, the agency, which sends people to work abroad, is obliged to conduct:
- list of employers to which candidates are directed to work abroad, including, in particular, the name and registered office of the employer and the name of the country of origin of the employer;
- list of candidates directed to work abroad, including the name and surname, address of the person’s residence and, in particular, the name and registered office of the employer to which the person was referred for work abroad, employer’s country of origin and the period of employment;
When directing people to work abroad, the agency is also required to enter into written agreements with both the candidate and the employer to whom the candidate is referred. The content of both agreements is governed by the provisions of the Act.
For example the applicable regulations require that the contract between the agency and the candidate include detailed employment-related information such as:
- foreign employer and its registered office address;
- period of employment;
- type of contract between the candidate and the foreign employer;
- terms and conditions of employment, including the information on the candidate’s salary;
- social benefits to which the candidate is entitled;
- conditions of social insurance and insurance against accidents and tropical diseases;
- information on the procedure and conditions of admitting foreigners to work in the country of work.
The provision of temporary work services by an employment agency is subject to the regulations included in the separate Act (distinct from the general act on the employment agencies) – Act of 9 July 2003 on employment of temporary workers. However, this does not change the fact that before starting to operate as a temporary work agency, it is necessary to register the company with KRAZ.
Temporary work means that a employee signs an employment contract with the agency, which then directs that employee to work for a user employer. Temporary work is defined in the Act as performing work:
- of a seasonal, periodic or ad hoc nature, or
- that the timely performance by employees hired by the user employer would not be possible, or
- whose performance is the responsibility of an absent employee employed by the user employer.
Temporary work cannot be therefore performed in every case. Moreover, there are certain statutory restrictions as to the type of work that cannot be assigned to a temporary employee, for example: work that is particularly dangerous (according to the list of such jobs published by the Polish Ministry of Labor), work as a security guard that requires to be armed with a firearm or work in the workplace of a person who was employed by the user employer and who was dismissed for reasons not related to the employees (e.g. as part of collective redundancies).
Directing an employee for temporary work requires that the agency first enter into written agreements – with both the user employer and the temporary employee. The content of both agreements is governed by the provisions of the Act on temporary employment.
For example, the contract between the employment agency and the user employer should agree on:
- the type of work to be assigned to the temporary worker;
- the necessary qualifications of the temporary employee;
- the expected period of performance of the temporary work;
- working time of the temporary employee;
- the place of performance of the temporary work.
It is also important to remember that there are time limits for the performance of temporary work – basically, an agency may direct a given employee to perform temporary work for a given user employer for a period not exceeding a total of 18 months in a period covering 36 consecutive months. It is also necessary to note that temporary job offers advertised by an employment agency should be marked with the wording: “temporary job offer” (in Polish: “oferta pracy tymczasowej”).
One of the basic obligations of every employer in Poland is to issue a certificate of employment to an employee upon termination of employment. However, in case of temporary employees, the certificate of employment is issued by an employment agency – the certificate should include information about each user employer for whom temporary work was performed and the periods of such work.