The impact of the minimum wage on employee benefits

The minimum wage was introduced into the legal market in order to avoid a situation in which employees are paid less than the market value of their work, and it is constituted by the established lowest remuneration that an employer must pay to an employee with an employment contract. The minimum wage is closely related to other benefits and entitlements to which employees are entitled, being a sort of indicator that directly shapes and defines such benefits and entitlements. 

In January 2024, the minimum wage was increased to PLN 4,242. However, it is important to be aware that as of 1 July 2024, the second increase scheduled for this year comes into effect, setting the minimum wage at PLN 4,300. 

Sickness and maternity benefit. 

Sick pay for full-time work cannot be less than the amount of the minimum wage, after deducting an amount corresponding to 13.71% of that wage. The same is applicable to maternity and childcare allowance, rehabilitation benefit, compensatory allowance. 

Remuneration components shaped by the minimum wage. 

• Night work bonus – night workers are entitled to a wage supplement for each hour of night work of 20% of the hourly rate based on the minimum wage. 
• Compensation for unequal treatment – a person against whom an employer has violated the principle of equal treatment in employment is entitled to compensation of an amount that is not lower than the minimum wage. 
• Severance pay for collective redundancies – maximum severance pay cannot exceed 15 times the minimum wage. 
• Compensation for violation of provisions providing for the protection of an employee in the event of the employee exercising his/her rights under employment law, including the principle of equal treatment in employment – this may not be the basis for any unfavourable treatment of the employee and may not cause any negative consequences for the employee, in particular it may not constitute a reason that justifies termination of the employment relationship or its termination without notice by the employer, the violation of which leads to the possibility for the employee to claim compensation in an amount which is not lower than the minimum wage. The same also applies to an employee who has provided any form of support to an employee exercising the above rights. 
• Compensation for mobbing or for the termination of an employee’s employment contract as a result of mobbing – an employee who has suffered mobbing or who has had his or her employment contract terminated as a result of mobbing has the right to claim compensation of not less than the minimum wage. 
• Pay for work standstill – an employee for the time of non-performance of work, if he was ready to perform it and was prevented from doing so for reasons attributable to the employer, is entitled to remuneration resulting from his personal classification, determined by an hourly or monthly rate, and if such a remuneration component has not been singled out when determining the terms and conditions of remuneration – 60% of the remuneration, but not less than the amount of the minimum wage. 
• Guarantee pay – if an employee is not obliged to perform work in a given month due to the distribution of working hours in the adopted pay period, he is entitled to remuneration not lower than the minimum wage. In the case of part-time employees, the above applies accordingly. 

Deduction-free amounts. 

The minimum wage also regulates the amounts free of deductions. The percentage of the free amount is shown after deduction of social security contributions, advance personal income tax and contributions made to an employee capital plan, if the employee has not opted out. According to the Labour Code, an adequate amount is free from deductions: 

• 100% of the minimum remuneration – for the deduction of sums enforced by virtue of executive orders for the payment of debts other than alimony, 
• 100% of the minimum wage – for voluntary deductions for the benefit of the employer, 
• 90% of the minimum remuneration – for deductions of penalties. 
• 80% of the minimum wage – for voluntary deductions for entities other than the employer, 
• 75% of the minimum wage – for deductions of cash advances given to the employee. 

If an employee is employed on a part-time basis, the aforementioned deduction-free amounts are to be reduced in proportion to the working hours. 

In addition, the lowest national salary is expected to change again from January 2025 and is set to be PLN 4,626 gross. What this means in practice is that the issues listed in this article in terms of actual amounts will change again.