Employment law in Lithuania
Employment law in Lithuania is primarily governed by the Labor Code of the Republic of Lithuania, which came into effect in 2017 and regulates the relationship between employers and employees. The law covers areas such as employment contracts, wages, working conditions, termination, dispute resolution, social security, and health and safety. Lithuania's labor laws are aligned with European Union (EU) standards, providing significant protections to workers while also allowing flexibility for employers.
Here’s an overview of the key aspects of employment law in Lithuania:
1. Employment Contracts
Types of Contracts: Employment contracts in Lithuania can be either written or oral, though written contracts are generally recommended and often required for clarity and legal security. Written contracts are mandatory in the following situations:
For fixed-term contracts (i.e., contracts with a specified end date).
When the terms of the contract are subject to specific arrangements (such as part-time work).
If an employee is expected to work for more than 1 month.
If an employee is hired for a job that is not continuous.
Indefinite Contracts: These are open-ended agreements without a specified end date and provide long-term job security.
Fixed-Term Contracts: These contracts are for a specific duration or project and cannot generally exceed 5 years. If a fixed-term contract is extended beyond 5 years, it may be considered an indefinite contract. Fixed-term contracts should only be used for specific, non-recurring tasks or when there are temporary fluctuations in work.
Probation Period: Employers can set a probation period, typically up to 3 months. During this period, either party can terminate the contract with a shorter notice period, usually 3 days.
2. Wages and Salaries
Minimum Wage: The Lithuanian government sets the minimum wage on an annual basis. As of 2025, the gross minimum monthly wage is €730. Employees earning below this amount are entitled to at least the minimum wage, which is regularly adjusted to account for inflation and economic conditions.
Payment Frequency: Wages must be paid at least once a month. Employers and employees can agree on different payment schedules (e.g., weekly or bi-weekly), but this should be clearly stated in the employment contract.
Overtime: Employees are entitled to overtime pay if they work beyond the standard 40-hour workweek. The overtime rate is typically:
1.5 times the normal hourly rate for overtime worked on regular working days.
2 times the normal hourly rate for overtime worked on public holidays or rest days.
3. Working Hours and Rest Periods
Standard Working Hours: The standard workweek in Lithuania is 40 hours, typically divided into 5 working days of 8 hours each. The actual working hours may differ depending on the industry or specific job requirements.
Rest Periods: Employees are entitled to at least a 30-minute break if they work more than 6 hours per day. The break is usually unpaid unless specified otherwise in the employment contract.
Weekly Rest: Employees are entitled to 1 full rest day each week, usually on Sunday. If employees work on a rest day, they are entitled to additional compensation (usually at a higher pay rate for work on public holidays or weekends).
4. Leave Entitlements
Annual Leave: Employees in Lithuania are entitled to at least 20 working days (4 weeks) of paid annual leave per year. This applies to full-time employees. Part-time employees are entitled to leave on a pro-rata basis.
Employees are encouraged to take leave during the year, and any unused leave is typically carried over to the following year, with specific rules on how long leave can be carried over.
Sick Leave: Employees are entitled to sick leave if they are ill or injured. The first 2 days of sick leave are unpaid, while the remaining days are paid at varying rates, with state compensation covering part of the sick pay. The state generally covers up to 80% of the employee's average salary, depending on the length of employment.
Maternity Leave: Female employees are entitled to 20 weeks of paid maternity leave (14 weeks before the birth and 6 weeks after). During maternity leave, the employee receives benefits from the state social insurance system, with compensation typically equal to 100% of the employee’s average salary.
Paternity Leave: Fathers are entitled to 30 days of paid paternity leave following the birth of a child. This leave can be taken either in full or in portions.
Parental Leave: In addition to maternity and paternity leave, parents can take up to 2 years of parental leave to care for their child. The leave can be taken by either parent, and the government provides financial support for part of the leave period, although the exact amount varies.
Public Holidays: Lithuania recognizes several public holidays, such as New Year's Day, Independence Day, Labor Day, and Christmas. Employees are entitled to time off on these holidays, and if they work on a public holiday, they are generally entitled to additional compensation (usually at double the regular wage).
5. Termination of Employment
Dismissal: Employers can dismiss employees for just cause, such as:
Misconduct or violation of company policies.
Insubordination or poor performance.
Redundancy or financial difficulties. However, employers must follow a strict legal procedure when dismissing employees. This includes providing the employee with the reasons for dismissal and ensuring that the dismissal is justified.
Notice Period: The standard notice period for dismissal is:
1 month if the employee has worked for more than 1 year.
2 weeks for employees who have worked between 6 months to 1 year.
3 days for employees who have worked for less than 6 months.
Employees who are dismissed without valid reasons are entitled to severance pay or compensation equal to the salary for the notice period.
Resignation: Employees who voluntarily resign must provide notice as specified in their contract (typically 1 month). If an employee resigns without giving the required notice, they may be liable to pay compensation for the notice period.
Redundancy: If an employee is made redundant, they are entitled to severance pay based on their length of service. The amount varies depending on the circumstances, but the law generally requires at least 2 months' salary as severance pay if the employee has worked for 5 or more years.
6. Employment Rights and Protection
Non-Discrimination: Discrimination based on gender, age, disability, race, religion, sexual orientation, or other personal characteristics is prohibited in Lithuania. Employers must ensure that their hiring, promotion, and pay practices are fair and non-discriminatory.
Harassment: Employees are protected from sexual harassment and other forms of workplace harassment. Employers are responsible for preventing and addressing harassment in the workplace.
Health and Safety: Employers are required to provide a safe working environment and ensure compliance with occupational health and safety standards. This includes providing protective equipment, ensuring safe working conditions, and offering health checks where necessary.
Trade Union Rights: Employees have the right to form or join trade unions and engage in collective bargaining. Trade unions play a significant role in negotiating employment terms, such as wages, benefits, and working conditions.
7. Social Security and Benefits
Social Insurance: Employees and employers are required to contribute to the Lithuanian social insurance system, which covers pensions, healthcare, unemployment benefits, and other social protections. Social insurance contributions are deducted from the employee’s salary, and employers must match these contributions.
Pensions: Employees are entitled to a state pension upon reaching retirement age, provided they have contributed to the social insurance system for a sufficient number of years.
Unemployment Benefits: Employees who lose their job are entitled to unemployment benefits, provided they meet the eligibility criteria, including having paid sufficient social security contributions.
Healthcare: Employees are covered by the state healthcare system and are entitled to medical services, including hospitalization and outpatient treatment. Employees can also choose to take additional private health insurance through their employer or independently.
8. Employment of Foreign Workers
Work Permits: Foreign nationals who wish to work in Lithuania must obtain a work permit, unless they are citizens of EU/EEA countries, in which case no work permit is required. Employers must apply for the work permit on behalf of the foreign employee.
Residence Permits: Foreign employees will also need a residence permit if they intend to live and work in Lithuania for more than 90 days. The permit is generally issued for specific employment and must be renewed periodically.
9. Dispute Resolution
Labor Disputes: In case of disputes between employees and employers (such as wrongful dismissal, unpaid wages, or discrimination), the first step is typically to resolve the issue through negotiation or mediation.
Labor Court: If a dispute cannot be resolved through negotiation or mediation, employees may take the case to a labor court. The labor court is responsible for hearing employment-related cases, including disputes regarding unfair dismissal, wage disputes, and violation of labor rights.
10. Special Regulations for Certain Sectors
Public Sector: Public sector employees are governed by additional regulations, and their terms of employment may include additional benefits, such as housing allowances, pensions, or specific job security provisions.
Women and Minors: Special protections exist for women (e.g., maternity and parental leave) and minors in the workplace. For example, minors are prohibited from working in hazardous conditions, and pregnant women have extra protections.
Conclusion
Lithuania's employment law provides a balanced approach, offering protections to employees while allowing employers flexibility to manage their workforce. The Labor Code of Lithuania governs key aspects of employment, including contracts, wages, working hours, leave entitlements, and termination. The law ensures fair treatment in the workplace, while also providing dispute resolution mechanisms and protection for vulnerable employees. For specific legal advice, it is recommended to consult a local employment lawyer or legal expert in Lithuania.
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