Hundreds of zlotys to be saved

In an article in Dziennik Gazeta Prawna (Daily Legal Gazette) Paweł Wyrębek discusses how much companies can save thanks to reduced contributions to the ZFŚS (Zakładowy Fundusz Świadczeń Socjalnych – Social Benefits Fund):

Employers of private companies may opt out of creating a Social Benefits Fund or determine the size of its contribution to the fund. By opting out of the Company Social Benefits Fund or setting a lower than the “statutory” amount of deductions, employers can protect themselves against the unfreezing of the deductions for the Company Social Benefits Fund, and, in many cases, also offset the increase in employment costs associated with an increase in the minimum wage and the introduction of PPK (Employee Capital Plans).
The amount that could be potentially saved by the company depends on the number of employees, and whether the company decides to abandon the creation of the fund altogether or only keep its contribution to the Company Social Benefits Fund at the current level. For example: an enterprise employing 200 employees that completely opted out of the  ZFŚS (Zakład Ubezpieczeń Społecznych – Social Benefits Fund) in 2020 could save just over 310,000 PLN. If the deductions were maintained at the current level, the same company, then it could save around 55,000 PLN. While for an identically company, whose average salary was 5000 PLN and 60 % of its staff had joined the PPK scheme, its expenditure on the PPK (for the period from June to December 2020) would amount to about 63,000 PLN. The decision to opt of creating a Social Benefits Fund, or determining the amount that a company should contribute to the fund depends on the specific characteristics of a given company. Decision makers have to take into account whether the company is subject to remuneration regulations or a collective labor agreement and whether trade unions operate in the company. The provisions for not establishing the Company Social Benefits Fund or determining the amount of the contribution to the fund should be included in the remuneration regulations or the collective labor agreement. The decision regarding the Company Social Benefits Fund, however, does not lie solely with the employer. It must be agreed with trade unions (if any) or with an employee representative selected for this purpose. Restricting social benefits may face some resistance from employees especially trade unions. Despite this challenge, it is worth discussing this topic, as even a partial limiting of the social benefits, could save employers a lot.
When do you need to conclude the relevant agreements and update any of your in-house agreements? Regulations are silent on this subject. This means that opting out of the Social Benefits Fund or determining the amount of deductions is possible at any point during the year. Personally, however, I recommend taking the appropriate action as early as possible so that any information regarding the company’s Social Benefits Fund reaches employees at the beginning of the year. The above remarks do not apply to companies that employ less than 50 people on a full-time basis. They are free to make the decision about not creating a fund and not paying holiday pay, but they should provide this information to employees by January 2020.

The full article is available on the Dziennik Gazeta Prawna (Daily Legal Gazette) website (access for registered subscribers).

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