Labour law updates and recommendations

Not creating a company social benefits fund

The deadline for employers to inform their  employees about not creating  a company social benefits fund and not providing holiday pay is almost upon us –  Monday 31 January 2022.

In the case of employers that have fewer than 50 employees (full-time equivalents), the situation is very straightforward – it is enough just to inform the employees of the decision in the manner usually used by the employer to communicate with its staff (e.g. by email, on the employer’s intranet, etc.). The decision does not require the consent of the employees’ representatives.

However, the situation is more complicated in the case of employers that have 50 or more employees on the first day of the calendar year. Such employers are obliged to establish a fund, and if they decide not to, they have to obtain the consent of the employees’ representatives and introduce relevant provisions into their remuneration regulations.

Instead of creating a fund, employers may decide to provide holiday pay, i.e. a payment of the same amount to each employee who takes holiday leave of at least 14 days. In this case, the employer does not have to take the employee’s personal, family or financial situation into account when making the payments. Moreover, if the holiday pat provided in a given calendar year is not higher than the amount of the base contribution (in 2022 PLN 1662.97), it is exempt from social security contributions.

This is the last moment for employers to make a decision on whether to create a fund and to provide holiday pay.


Izabela Olejarz, Junior Associate