RegRally Insights: Employment Law

ECOVIS ProventusLaw invites you to read about current trends and news in employment law in December 2024 and how companies in Lithuania can stay compliant.

Law amendments of the Republic of Lithuania

From 1 January 2025, amendments to the Law on the Legal Status of Foreigners will come into force.

Key changes:

1. Labour Market Test Abolished

Foreign workers will no longer be assessed for suitability for the Lithuanian labour market, and the Shortage Occupations List will also be discontinued, simplifying migration procedures.

2. Introduction of a Quota System

Annual quotas will limit permits to 1.4% of Lithuania’s population (approx. 40,000).
Exceptions: graduates of Lithuanian institutions, those with temporary protection, or cases with exceptional circumstances.
Exceeding quotas requires employers to offer at least 1.2 times the average wage.

3. Additional Quotas

From 2026, collective agreement parties may propose extra quotas (up to 20%) for their members, subject to approval.

Changes to Minimum Monthly Wage and Personal Income Tax Calculation Effective January 1, 2025

As of January 1, 2025, the minimum monthly wage in Lithuania has been set at €1,038. This change is accompanied by updates to Article 20 of the Law on Personal Income Tax, which introduced a revised procedure for calculating non-taxable income (NPD).

Under the new regulations, the maximum income eligible for applying the first formula for NPD has been increased to €2,387.29. As a result, employees earning less than €2,387.29 per month now benefit from lower Personal Income Tax obligations, increasing their monthly income by approximately €11–13.

Labour Code Amendments

Amendments to the Labour Code will come into force on 1 January 2025.

The main changes include:

Specify arrangements for additional work. Agreements must specify the procedure for granting additional rights or obligations to ensure clearer regulation and reduce the risk of potential disputes (Article 35(4) of the Labour Code).
Employment of the general manager. Employers must notify Sodra of the general manager’s employment at least one working hour before the scheduled start of work (Article 42(2) of the Labour Code).
Long-term service allowance. In the event of termination of employment due to the employer’s bankruptcy, employees are entitled to a seniority allowance calculated based on uninterrupted service (Article 62(5) of the Labour Code).
Overtime work is now permitted only with the employee’s written consent, except in cases provided for by law (Article 119(2) of the Labour Code).
Parental leave. The duration of the non-transferable two-month part of parental leave has been clarified as 62 calendar days (Article 134(3) of the Labour Code).
Overtime pay on public holidays and night shifts. It has been explicitly stated that work during holidays and night shifts shall be compensated at a rate of no less than 2.5 times the regular wage (Article 144(4) of the Labour Code).

New Measures to Prevent Workplace Violence and Harassment

A description of measures to prevent violence and harassment at work, approved by a decree of the Chief State Labour Inspector of the Republic of Lithuania, has entered into force. This description is intended to implement the provisions of Article 30(4) of the Labour Code on preventing violence and harassment at work. It lists necessary preventive measures to reduce the risks of violence and harassment at work, their impact on employees, and the procedures for implementing these measures. The following obligations are imposed on employers:

Implementation of the prevention policy. Employers must develop and implement a clear policy on preventing violence and harassment.
Training for employees. Provide regular training to employees on preventing and recognising violence and harassment.
Reporting system. Ensure that an anonymous reporting system is in place where employees can report incidents of violence or harassment.
Investigation procedures. Establish clear procedures for investigating reports of violence or harassment.

Psychological support. Provide psychological support to employees who are victims.
Liability for violations. Ensure that appropriate action is taken against employees who violate the prevention policy.

Recommendations of ECOVIS ProventusLaw:

1. Update Workplace Policies. Employers should revise internal policies to explicitly address violence and harassment, including unacceptable behaviour by employers or managers.

2. Implement Regular Training. We recommend conducting regular training for all employees and managers on preventing and addressing violence and harassment in the workplace.

3. Establish Confidential Reporting Channels.

4. Ensure Compliance. Employers should regularly review their practices and assign specific responsibilities to ensure compliance with the new regulations, avoiding fines.

5. Support Victims. Employers should support victims, including access to counselling, legal advice, and necessary adjustments to the working environment.