Poland: Changes in the rules for calculating the minimum wage from 2020

On 1 January 2020, the Act of 19 July 2019 amending the Act on Minimum Wages, shall come into effect. On the basis of the amendment, seniority allowances to which employees are entitled after reaching a specified period of employment (on the basis of separate legal acts, collective agreements or work regulations) will no longer be included in the employee’s remuneration for the purposes of calculating the minimum wage. So far, this remuneration has not included: service anniversary award, retirement benefit, one-time disability benefit, overtime work remuneration and  wage supplement for night work.

The amendment has been widely expected, especially by long-term public sector employees, for whom a significant part of the gross salary is their seniority allowance. The current shape of legal regulations means that public sector employees have not benefited from dynamic growth of the minimum wage in recent years. For example an employee hired in 2009 (PLN 1.276 gross minimal wage in 2009 + PLN 974 gross seniority allowance for 10 years of service) may actually earn the same salary as an employee hired in 2019 (PLN 2.250 gross minimal wage in 2019). The amendment means that from 2020, the seniority allowance will be a real addition to the employee’s salary, and not a way to compensate for the increase in the minimum wage. The Polish government proposes that the gross minimum wage in 2020 will be PLN 2.450.