New bill, old approach – in other words, still salary not so minimum

The Ministry of Labour and Social Policy has done as it announced. In a recent article ‘Salary not so minimum after all’ (read HERE), we pointed out that the first draft of the new Minimum Wage Act, envisaged equating the minimum wage with the basic wage. The Ministry, after consultation, withdrew from its idea, replacing it with a plan to gradually exclude individual wage components from the scope of the minimum wage, until the minimum wage comes close to the ‘pure’ basic wage. What came out of the Ministry’s announcement?

Changes to the definition of minimum wage

The first version of the draft, dated 22 August 2024, envisaged linking the minimum wage to the so-called basic salary. The drafted Article 15 provided that the basic salary of a full-time employee could not be lower than the statutory minimum.

In the latest version of the bill of 11 April 2025, this direction has been modified and implies the gradual exclusion of individual components from the minimum wage. The definition of basic salary (Article 2, point 25 of the previous draft law) has been removed and the idea of equating the minimum wage with the basic salary has been pushed back (at least officially).

New catalogue of exemptions

According to Article 16(1) of the new draft law, the amount of remuneration of a full-time monthly employee cannot be lower than the amount of the minimum wage. In turn, according to Article 16(3), the salary will not be taken into account when calculating the salary:

1. jubilee award,
2. retirement or disability severance pay,
3. overtime pay,
4. allowance for night work,
5. seniority allowance,
6. special working conditions allowance,
7. function allowance,
8. other extras,
9. bonuses and awards.

Compared to the current state of the law (Act of 10 October 2002 – i.e. Journal of Laws 2024, item 1773), the draft provides for the addition of three new exclusions (items 7-9), which means a significant reduction in the components taken into account when calculating remuneration.

The devil is in the definitions

As we have indicated above, the new draft Minimum Wage Act expands the catalogue of exemptions to include three new components: function allowance, other allowances and bonuses and prizes.

The bill defines them as follows:

– function allowance – a salary supplement to which a member of staff in a team leadership position and a member of staff coordinating the performance of specific tasks, as well as any other member of staff who is entitled to a function allowance, is entitled;

– other allowance – a salary supplement other than night work allowance, length of service allowance, special working conditions allowance, function allowance, to which an employee is entitled in particular for having additional skills or for performing additional activities or for a periodical increase in the scope of official duties or for entrusting additional tasks or in order to motivate to work or due to the nature of work or the conditions of work performance, to which an employee is entitled on the rules specified in separate regulations.

Change of approach – but not of purpose

Although the Ministry has abandoned its original plan to align the minimum wage with the basic wage, the direction of change still leads to such a goal.

Due to the broadening of the catalogue of exemptions, as well as the very broad definitions of ‘function allowance’ and ‘other allowance’, the Ministry actually stays with its idea of equating the minimum wage with the basic wage, but ‘sells’ it in a softer form.

This is because, as announced, reaching a situation where the minimum wage is virtually equal to the basic wage is a staggered process.

According to the draft, the new law is to enter into force within 14 days of its promulgation, but the provisions providing for further exemptions from Article 16(3) will enter into force at later dates:

– as from 1 January 2026 – the function allowance is to be excluded from the calculation of remuneration,

– as from 1 January 2027 – other allowances are to be excluded from the calculation of remuneration,

– with effect from 1 January 2028 – bonuses and awards are to be excluded from the calculation of remuneration.

Summary

We are observing the process of redefining the minimum wage in Poland – not as a radical change overnight, but as a staged process that may eventually lead to a very narrow understanding of the minimum wage. Work on the law is in progress (at the governmental legislative stage) and further changes may be introduced during the parliamentary work. It is therefore worth keeping a close eye on the legislative progress and preparing for the possible consequences for companies’ remuneration systems.

Attorney at law Marta Strzecha-Bociąga

Legal assistant Julia Michalczyk