Hire in Lithuania

EOR in Lithuania

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Lithuania, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Lithuania ―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in Lithuania and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs.

Hiring in Lithuania

The principal statute regulating employment is the Labor Code. Case law interpreting the code is also important. A major revision to the Labor Code took effect on January 1, 2017.

Employment contracts in Lithuania

As you look to hire employees in Lithuania, here are some standard regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

Working hours

Maximum working time, including overtime, generally cannot exceed 48 hours per week. If the employee and the employer have an agreement for additional work hours, maximum working time may not exceed 12 hours per day and 60 per week.

Adult employees must be allowed at least 11 hours of uninterrupted rest between one work day and the next, minors 12 to 14 hours in each 24-hour period.

Employees are generally entitled to a break of between 30 minutes and two hours to rest and to eat, normally halfway through the work day but no later than after five consecutive working hours.

Overtime cannot exceed eight hours in seven consecutive calendar days unless an employee gives written consent to work up to 12 overtime hours per week. Total hours worked cannot exceed 48 per week averaged over a period of up to three months. A different annual limit may be established in the collective bargaining agreement but cannot exceed 180 hours a year.

Compensation

As you consider the appropriate salary to offer new employees, keep in mind:

• Effective January 1, 2024, the monthly minimum wage is 924 euros.
• Effective 2025, the monthly minimum wage will increase to 1,038 euros (US$1,147.39), from 924 euros, and the hourly minimum wage will increase to 6.35 euros, from 5.65 euros.
• Overtime must be paid at a rate of at least one and a half times the employee’s regular hourly pay.
• Employees who work on a day of rest or a public holiday are entitled to double time.

As your employer of record in Lithuania, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses

Bonuses may be at the discretion of the employer or provided for in employment contracts, collective bargaining agreements, or other legal instruments. In the latter case, the employee has a legal right to a bonus.

It is common to provide employees with fringe benefits -

• Private health care
• Life insurance
• Company cars
• Phones
• Various performance-based bonuses (e.g., supplemental pay, commissions).

Profit- sharing is typically restricted to executive employees.

Probationary period

The probationary period in Lithuania typically does not exceed three months.

Termination and severance

During a probationary period, the employment contract can be terminated on three working days' written notice by either party.

Employers have the right to dismiss an employee on an indefinite contract without cause, provided they give the employee three days’ written notice and a severance payment equal to at least six months’ average salary. Otherwise, the standard notice period is one month, or two weeks if the employee has worked for the employer for less than one year.

The notice period must be doubled for employees who are raising a child up to 14 years of age or have less than five years until retirement age. The notice period must be tripled for disabled employees or employees who have less than two years until retirement age.

The employer also must give the employee two months’ severance pay if the worker has a year or more of service and half a month’s pay if less than a year of service. One month’s severance will be payable on the expiration of fixed-term contracts with terms exceeding two years.

An employee wishing to terminate the employment contract must give at least 20 working days’ prior written notice to the employer.

Employee benefits and paid leave in Lithuania

When negotiating terms of an employment contract with a candidate in Lithuania, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave

Expectant mothers are entitled to maternity leave of 70 calendar days before childbirth and 56 or (in the event of a complicated confinement or birth of two or more children) 70 calendar days after.

During this period, the employee is eligible for maternity benefits from the State Social Insurance Fund. Generally, the maternity benefit is equal to the employee’s full salary, subject to certain statutory limitations. If a woman chooses not to take maternity leave before childbirth, the maternity benefit is paid for 56 calendar days after or 70 calendar days in the event of a complicated confinement or birth of two or more children.

Vacation

Employees are entitled to paid annual leave of 20 working days or 24 working days if working six days a week. Certain categories of employees (e.g., minors, the disabled) are entitled to extended annual leave. Additional annual leave must also be granted for long uninterrupted employment at the same work place and for certain types of work, among other things. A contract of employment, a collective agreement or internal work regulations may provide for longer leave. Public holidays falling within a period of annual leave do not count as part of the leave, and during annual leave employees must be paid their average salaries.

Annual leave for the first working year is generally granted after six months of uninterrupted work at the enterprise. For the second and subsequent working years, annual leave is granted according to a schedule stipulated in a collective agreement or agreed upon by the employer and its employees. Certain categories of employee (e.g., women on maternity leave, minors) have the right to choose the time of their annual leave.

The employee may take annual leave in increments, although one uninterrupted period of at least 10 working days is required.

Payment in lieu of annual leave is not allowed except when an employee cannot be granted annual leave due to employment termination or if the employee does not wish to go on leave.

Holidays

The following paid public holidays are established in the Labor Code:

• New Year’s Day
• Day of Reestablishment of the State of Lithuania
• Day of Reestablishment of Lithuania’s Independence
• Easter Sunday and Easter Monday
• International Labor Day
• First Sunday in May: Mother’s Day
• First Sunday in June: Father’s Day
• Rasos and St. John’s Day
• Day of the State (Coronation of King Mindaugas)
• Assumption Day
• All Saints’ Day
• Christmas Eve
• Christmas (two days)

Holidays are observed on their calendar date. If the holiday falls on a Saturday or Sunday, it will not be moved to a weekday.

Sick leave

For the first two days of absence, the sickness allowance is paid by the employer. The allowance may not be smaller than 80% or larger than 100% of the employee’s average monthly salary. From the third to the seventh day of absence, the sickness allowance is paid from the State Social Insurance Fund at 40% of the average monthly salary and from the eighth day at 80% until the employee can work or is declared disabled.

An employee’s illness must be certified by a physician, and the employee must inform the employer of the necessary absence and of its probable duration.

Health coverage

Lithuania’s national social security system covers:

• Pension benefits
• Sickness and maternity benefits
• Social insurance
• Unemployment insurance
• Workers’ compensation
• Health insurance

No later than one working day before the commencement of actual work, every employer must notify the State Social Insurance Fund about every new hire.

In the course of employment, the employer must make mandatory monthly contributions to the State Social Insurance Fund at the following rates:

• 23.3% of the employee’s gross remuneration for pension benefits,
• 3.4% for sickness and maternity benefits,
• 1.1% for unemployment insurance,
• 3% for health insurance and
• between 0.18% and 0.9% (depending upon the employer’s category) for workers’ compensation.

Employee contributions are 6% for health insurance and 3% for pension and social insurance. Responsibility for withholding and paying both the employer’s and the employee’s income tax and social insurance contributions lies with the employer.

Additional benefits

In addition to healthcare benefits, employees in Lithuania are entitled to pension, which is funded by government tax revenues, as well as workers compensation, which is covered through mandated employer insurance.

Employer social costs will cover a large portion of employee benefits in Lithuania, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance if needed.

Updated: September 05, 2024

Employee onboarding with an employer of record in Lithuania

We write and validate all local employment contracts, streamlining the onboarding process for you and your Lithuanian employees—all you have to do is provide relevant information and review and approve the employment agreement. As your employer of record in Lithuania, we will:

• Schedule a welcome call to discuss HR and employment information for Lithuania, as well as answer any questions
• Prepare a customized employment contract in English or other local language
• Share the employment contract and benefits information with the new employee for signature and review
• Gather tax and banking information from the employee to set up payroll
• Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll

The entire onboarding process for the employee is often completed in as little as two weeks.

Partner with Safeguard Global as your Lithuania employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution, to expand and hire in 170+ countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Lithuania. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

Disclaimer

The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.