What is an employment contract, and what is a B2B agreement?
- An employment contract is a form of employment governed by the Labour Code. The employee is subordinate to the employer, performs work at a specified place and time, and is entitled to holiday leave, sick leave and a range of benefits.
- A B2B contract is an agreement between two business entities (entrepreneurs), most commonly in the form of a contract for specific work or a service contract. There is no subordination, and the terms of cooperation are flexible.
Protection and obligations – what are the differences between an employment contract and a B2B contract?
An employee hired under an employment contract enjoys numerous benefits, such as paid annual leave, the right to sick pay and protection against dismissal. Additionally, the employer pays social security and health insurance contributions on their behalf. In the case of a B2B contract, these obligations rest solely with the self-employed person, who decides independently on the scope of insurance and is responsible for their obligations to the state. In return, the self-employed person has greater opportunities for tax optimisation and flexibility in choosing the method of tax settlement.
When is it worth choosing a B2B contract, and when an employment contract?
A B2B contract can be an attractive solution for those who value independence and freedom in setting the terms of cooperation, especially if they have several clients or run a specialist service business. This arrangement also allows for more effective management of costs and income. However, this model is not suitable for everyone – the lack of job security, responsibility for tax settlements and the absence of guaranteed benefits are aspects that should be considered before making a decision. An employment contract will be more advantageous for those who expect a steady income, social security and the legal protection guaranteed by the Labour Code.
The risk of a sham B2B contract
It is worth remembering that entering into a B2B contract does not always mean full independence for the parties. If, in practice, the collaboration meets the characteristics of an employment relationship – for example, there is subordination, a fixed place and working hours, and supervision by the client – there is a risk that such a relationship will be challenged. In such a situation, both during inspections by authorities such as the Social Insurance Institution (ZUS) or the National Labour Inspectorate, and at the request of the person performing the work, it is possible for this cooperation to be recognised as an employment relationship. An employee hired under a B2B contract may, in fact, independently bring a claim before the court to establish the existence of an employment relationship if they consider that the statutory conditions are met. The consequence of such a ruling will be additional obligations for the client, including the need to pay social security contributions and to apply labour law provisions to that person.
Frequently asked questions
What is the main difference between an employment contract and a B2B contract?
An employment contract involves the subordination of the employee to the employer and guarantees a range of benefits, such as paid leave or sick leave. In the case of a B2B contract, the parties are equal, and the terms of cooperation are flexible, which means there is no typical subordination.
Who bears the costs of social and health insurance under a B2B contract?
In the case of a B2B contract, all obligations regarding insurance rest solely on the self-employed entrepreneur. This person independently decides on the scope of insurance and bears responsibility for their obligations to the state, unlike an employment contract, where the employer pays the contributions.
Does a B2B contract always mean full independence and no risk?
No, if in practice the cooperation resembles an employment relationship, for example through fixed place and working hours and supervision by the client, there is a risk of the contract being challenged. A supervisory authority or court may recognize such a relationship as an employment relationship, which will bring additional obligations for the client.
For whom will a B2B contract be a better solution than an employment contract?
A B2B contract is attractive for people who value independence, flexibility and the possibility of tax optimization, especially if they have several clients or conduct specialized activities. However, this requires accepting the lack of employment stability and the lack of guaranteed social benefits.
What are the consequences for the client if a court recognizes a B2B contract as a sham employment relationship?
In such a situation, the client must pay outstanding social insurance contributions and apply labor law provisions to the person performing the work. This can happen both at the request of the employee and during inspections by authorities such as ZUS or the National Labor Inspectorate.
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Adrianna Bracichowicz is a dedicated lawyer at our firm, specializing in business law and also in litigation law. She graduated with a master's degree from the University of Wroclaw, and also developed her skills while studying at the University of Bergen in Norway under the Erasmus+ program. She is currently continuing her legal education by completing the first year of her lawyer's apprenticeship.
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