The number of regulations and formal and legal obligations hampers Polish business

The article by a PKF expert (Marzena Filipowicz - Associate Partner for Outsourcing in PKF BPO), was published on September 26, 2022 on the website prawo.pl.

Nowadays, owners, apart from managing the operational activity, are forced to concentrate on a huge amount of additional obligations resulting from legal regulations. The catalogue of their duties includes, among others fulfillment of all legal requirements as an employer - writes Marzena Filipowicz.

The definition of an employer is included in the Labour Code. According to its article no. 3, the Employer is an organisational unit, even if it has no legal personality, as well as a natural person, if they employ employees.

It should be remembered that the obligations of the employer are not limited to those included in the Labour Code, in addition, many other laws and regulations apply to the employer.

Basic duties of the employer

The basic obligations of the employer include:

1.informing employees about the scope of their duties, the manner of performing work at designated positions and about their basic rights;

2. organization of work in such a way as to ensure full use of working time, achieving efficient and quality work by employees and reducing its burden;

3. counteracting discrimination in employment, ensuring fair evaluation criteria, counteracting mobbing;

4. providing employees with the content of the provisions on equal treatment;

5. caring for the development of employees, facilitating the improvement of qualifications and adaptation to the profession;

6. ensuring appropriate health and safety conditions and meeting the social needs of employees;

7. timely payment of remuneration;

8. shaping the principles of social coexistence at the workplace;

9. keeping and storing in paper or electronic form employee documentation (personal, payroll and other work-related files).

The proper performance of some of the above-mentioned obligations is difficult to clearly assess. It is difficult to say whether the employer has sufficiently cared for, for example, counteracting mobbing or adequately cared for the development of employees.

However, some of the employer's obligations have been described in great detail in the law, and their control makes it possible to determine whether the employer has properly fulfilled its obligations. Such duties include, among others, keeping records and storage of personal files.

Keeping employee records and personnel files

Detailed guidelines related to keeping employee documentation are set out in the Regulation of the Minister of Family, Labour and Social Policy of 10 December 2018 on employee documentation (Journal of Laws of 2018, item 2369, hereinafter: the regulation).

Penalties for mistakes

Lack of personal files or keeping them in a careless manner, inconsistent with the Regulation, is an offense against the rights of an employee and is punishable by a fine of up to PLN 45,000 (Art. 281 of the Labour Code). The fine is given by name to a natural person representing the employer, not the company!

Based on the case studies of our clients, for whom we conducted an audit of files and employee documentation, we identified the most common mistakes in keeping employee documentation. The six most common mistakes made when keeping and archiving employee documentation are:

1. Storing personal files of employees in one file. The employer is obliged to keep personal files separately for each employee. It is unacceptable for employers to collect documentation related to the employment relationship in one collective file.

2. No division of files into parts and no keeping the chronology of the documents. According to the regulation, personal files consist of four parts: A, B, C, D. These parts must be separated from each other, and each of them should contain the documents detailed in the regulation. In part A, you should collect documents related to the admission of a candidate for employment, such as: personal questionnaire, copies of employment certificates, copies of documents confirming qualifications, a medical certificate. In part B, documents related to the course of employment of the employee should be kept, such as: employment contracts concluded with the employee, information on the terms of employment, the employee's statement confirming that he has read the work regulations, documents on entrusting the employee with property, or documents related to lifting by the employee professional qualifications, health and safety training completion certificate, etc. In part C, you should collect documents related to the termination of employment, such as: statements on termination or termination of the employment contract, a copy of the employment certificate, information on the storage period of employee documentation. In part D, documentation should be kept of the employee's incurring disciplinary responsibility, notice of punishment and erasure of punishment after a certain period of time. It should be remembered that the documents contained in individual parts of the personal files should be numbered and arranged in chronological order. Additionally, each part should contain a complete list of the documents it contains.

3. Keeping unnecessary documentation in the personal files, including original documents. The regulation specifies in detail the categories and types of documents that may be collected in individual parts of personal files. This means that documents not indicated in individual categories should not be stored in personal files, but in a different set of documentation. Only copies of documents or their copies prepared by the employer themselves should be kept in the personal files.

4. Failure to remove disciplinary sanctions from the employee's file after the required period. According to the Labour Code, the penalty is considered void and the copy of the notification about the penalty is removed from the employee's personal files after one year of impeccable work. Impeccable work is understood as a situation in which, within a year after the penalty, the employee did not receive another disciplinary sanction.

5. Lack of consent to the processing of personal data. According to the Labour Code, the employer has the right to demand personal data from the person applying for employment, including: name (s) and surnames, date of birth, education, professional qualifications, and previous employment history. The employer requires the employee to provide additional personal data, including: address of residence, PESEL number, and in the absence of such - the type and number of the document confirming identity, other personal data of the employee, as well as personal data of the employee's children and other members of his immediate family, if such data is provided it is necessary due to the use by the employee of special rights provided for in the labor law, education and the course of previous employment, if there was no basis for their request from the person applying for employment, payment account number, if the employee did not submit an application for payment of remuneration to the hands own. The employer may request other data when it is necessary to exercise the right or fulfill the obligation resulting from the law.

The employer must obtain consent to process the employee's personal data. For this purpose, the employee's consent is required, for example in the form of the following entry: "I consent to the processing of my personal data in accordance with the provisions of the Personal Data Protection Act of  29 August 1997 (Journal of Laws of 2002, No. 101, item 926, as amended) ".

The use of an outdated model of a personal questionnaire and requesting data from the employee, which the employer is not entitled to obtain in accordance with the provisions of the Labour Code, is an irregularity in the maintenance of personal files.

6. Incorrect archiving period or lack of archiving of personnel files of dismissed employees. Employee records should be kept: - for 10 years, if the employee was employed in the company on 1 January 2019 or later; - for 10 years, if the employee was employed in the company in the years 1999–2018 - the condition is to submit to ZUS a statement (ZUS OSW) and an information report (ZUS RIA) for all persons employed in this period; - for 50 years, if the employee was employed by the company before 1 January 1999.

Along with the certificate of employment, it is mandatory for the employer to provide the employee with a statement of when his/her personal file will be kept and when he/she can collect his/her file. The employee may collect personal files within 30 days after the expiry of 10 years. If the employee does not collect his or her file within the statutory deadline, the employer has 12 months to destroy it in a way that makes it impossible to recreate its content.

The errors described above are only examples of the most common irregularities. In practice, there are many more mistakes, because employers forget about their rights or obligations, both at the stage of obtaining data from candidates and at the stage of being associated with the employee. Many times people dealing with employee matters do not have sufficient knowledge in this area. Especially when duties are assigned to them as a result of sudden replacement or staff changes.

Factors increasing the probability of the occurrence of irregularities

The factors contributing to the occurrence of errors in keeping records and personal files include:

1. high rotation of employees in the HR department and those representing the employer;

2. high rate of absenteeism by employees in the HR department and persons representing the employer;

3. overloading the HR team with responsibilities;

4. remote and / or hybrid work in the HR department and people representing the employer, causing negligence in the ongoing updating and correct aggregation of employee records;

5. low awareness of the obligations related to the manner of keeping files and employee documentation among the managerial staff, resulting in not providing appropriate documentation and not informing the HR department about events affecting the performance of relevant duties;

6. authoritarian management by persons representing the employer who, despite calls from HR departments, do not provide the relevant employee documentation on time.

It is worth mentioning that the risk of control increases when there is a conflict with a current or former employee.

How to avoid penalties and keep personal files in accordance with the law?

Recently, not only the number of penalties has been increasing, but also the amount of fines for offenses. Therefore, it is worth periodically auditing personnel files to avoid unpleasant consequences related to errors in keeping records.

The verification of personal files can be performed within the own entity. In the event of staff shortages or doubts as to the quality of work of your own team, it is worth outsourcing it to a specialized external entity. An audit will allow you to put your documentation in order, correct errors and verify its compliance with the law. Periodic verifications also enable checking the knowledge of the team responsible for employee matters. It becomes all the more important that the period of the pandemic and the changes introduced to the work systems caused significant problems with the flow and collection of personnel documentation for most employers.

Trust – walks up stairs, takes lift down

With a large number of formal and legal obligations for entrepreneurs, it is easy to make a mistake and oversight. Company owners and managements focusing their activities and strength on the pursuit of success and business development must not forget about the company security and risk minimisation. A fine to the company for improper keeping of documentation and personal files as well as a personal fine to the person representing the company cause a permanent scratch on the good reputation of the employer. Therefore, managers and business owners, aware of the obligations and consequences of failure to meet them, increasingly invest in HR and payroll audit.

In times of high employee demand, most companies struggle to find a good employee and face high employee turnover. In addition, there is a high risk of error or oversight on the part of the employer, resulting in the loss of reputation and trust. All this triggers the need to increase the budget for Employer Branding activities as well as the costs of recruiting and introducing new employees to the organisation.