In some industries, such as IT, marketing or trade, B2B contracts are more popular than employment contracts. This is mainly due to lower tax and contribution burdens and the possibility of achieving higher earnings. In recent months, however, there has been increasing talk of so-called fictitious self-employment, i.e. a situation in which an entrepreneur provides services on the terms characteristic of an employment contract. What is a B2B contract, what should you know about it and what are the consequences of recognizing it as an employment contract?
What is a B2B contract?
B2B contract (eng. business-to-business) is a civil law contract concluded between two companies – for example, a joint-stock company and a sole proprietorship. Unlike an employment contract, in which a hierarchical relationship between the employer and the employee applies, B2B cooperation is based on an equal relationship between companies. A B2B contract is regulated by the provisions Civil Code, and not Labor Code, and both parties are independent business entities. B2B is therefore a partnership agreement that cannot bear the characteristics of an employment contract (UoP).
For a contract to be classified as B2B, a self-employed person must:
- have flexible working hours – the other party cannot decide when and where they work,
- bear economic risk,
- act as a partner, not a subordinate,
- be able to decide whether to undertake a given task,
- receive remuneration depending on the amount and results of work performed – without a fixed salary, the right to holiday leave or overtime pay.
When can a B2B contract be recognized as an employment contract?
If a B2B contract has the characteristics of an employment contract, it may be recognized as a UoP. According to art. 22 Labor Code: [By entering into an employment relationship, the employee undertakes to perform work of a specified type for the employer and under his supervision and at the place and time designated by the employer, and the employer undertakes to employ the employee for remuneration.
Therefore, a B2B contract cannot mean:
- hierarchical subordinate-employee relationship,
- strict supervision of work,
- performing work at the place and time designated by the employer,
- fixed salary for work.
Example:
Ms. Anna is a copywriter and runs a sole proprietorship. She issues one invoice per month to the company she works with. She must work at the company's headquarters from Monday to Friday from 8 a.m. to 4 p.m., and any delays must be reported and made up for. She cannot work remotely or decide where and when to provide services. Although she works on a B2B contract, the circumstances of providing services bear the characteristics of an employment contract. Ms. Anna is therefore not an equal partner of the company, but its subordinate.
Who can decide on recognizing B2B as a contract of employment?
Currently, the suspicion that we are dealing with an employment contract requires filing a lawsuit with the district court establishing the existence of an employment relationship.
In August 2024, information appeared that the National Labor Inspectorate (PIP) is working with the Ministry of Family, Labor and Social Policy (MRPiPS) on a draft law aimed at combating fictitious self-employment. The effect is to be giving PIP new competences, which would consist in the possibility of transforming B2B contracts (and other civil law contracts) into employment contracts. The criteria taken into account by PIP are to be the place of work and the existence of a subordination relationship. PIP will pay special attention to companies in which the employment contract has been changed to a B2B contract. The purpose of the changes is fight against violations of workers' rights, which occur when an employee is forced to sign a B2B contract.
B2B and employment contract – why do employers prefer self-employment?
B2B employment offers many benefits for employers, including the lack of need to:
- granting paid vacation leave,
- ordering medical examinations,
- paying social security contributions, income tax, PPK contributions, etc.,
- payment of sick pay for up to 33 days per year,
- application of protection periods against contract termination,
- compliance with regulations Labor Code.
Recognition of B2B as an employment contract – possible consequences
Recognizing B2B cooperation as a UoP means primarily negative consequences for the employer. The self-employed may then demand that the employer grant current and outstanding vacation leave or outstanding equivalent in the event of termination of the employment relationship. If the self-employed was taxed with a flat tax (19%), in the case of transforming B2B into an employment contract, the tax scale would apply - for incomes above PLN 120,000, a higher rate applies (32%). The benefit for the employed person is the possibility of receiving an employment certificate and including the period worked in the length of service. The employer will also be obliged to pay ZUS contributions from the employee's salary up to 5 years back.
FAQ – Frequently Asked Questions
B2B and employment contract – when is the transformation of the contract an abuse?
If an employment contract is replaced by a B2B contract without changing the previous working conditions, it can be considered an abuse. The right of a self-employed person is to decide independently about the place and time of work and the lack of close supervision and a hierarchical relationship with the second entrepreneur.
How can I check if I am not being bogusly self-employed?
If you perform work on your own terms, decide independently about the place and time of service provision and are not subject to a hierarchical relationship, in your case it is probably not possible to talk about fictitious self-employment. If you want to make sure that your relationship with another entrepreneur does not have the characteristics of an employment contract, contact us. Open Profit is online accounting office, which specializes in accounting for JDG, B2B and small companies. We provide online accounting and, if necessary, we provide legal recommendations and tax.
