It is a common practice for companies to employ a person under an employment contract (usually for the minimum wage) while simultaneously cooperating with that person under a B2B contract. The benefits of combining UoP and B2B stem from the assumption that there is a convergence of two titles for social insurance contributions, i.e., the employment contract and business activity. However, in some cases, a risky situation may arise where the employment contract becomes the sole mandatory title for social insurance contributions.
This approach, although undoubtedly beneficial for both employers and employees (since the remuneration from the B2B contract is not added to the social insurance contribution base), has been criticized by the Supreme Court (see the Supreme Court ruling of April 25, 2023, Case No. II USK 309/22) and is also challenged by ZUS during inspections of contribution payers.
According to the Supreme Court, in many situations, business activity conducted under a B2B contract for one’s current employer should be treated the same as employment when it comes to calculating social insurance contributions (Article 8a, Section 2a of the Social Insurance System Act). The key factor, according to the Supreme Court, is whether the person performs the same tasks under both the employment contract and the B2B contract and determining who is the actual beneficiary of the work performed under the B2B contract.
„(…) work performed for one’s employer is work from which the employer is the real beneficiary. This means that regardless of the type of tasks performed by the employee and regardless of the type of business conducted by the employer, the mere fact that the employer benefits from the measurable results of their employee’s work is sufficient to apply Article 8, Section 2a of the Social Insurance System Act.”
Supreme Court ruling of April 25, 2023, Case No. II USK 309/22
In summary, according to the Supreme Court, when it is not possible to distinguish between the scope of activities performed under an employment contract and those carried out under a B2B contract, and when (only) the employer is the recipient of the services provided under the B2B contract, there is no convergence of social insurance titles such as UoP and B2B (meaning Article 8, Section 2a of the Social Insurance System Act must be applied). Instead, a single insurance title as an employee is created, covering both the remuneration from the employment contract and the B2B contract.
If you have questions regarding settlements within B2B cooperation with your employer or how to protect yourself in the event of an inspection when combining UoP and B2B, visit us at www.outsourced.pl .
