RegRally Insights: Employment & Migration Law Updates, October 2026

Business trips, final pay and pay structures: three sets of rules change for employers in Lithuania within three months. New per diem rules have applied since October 1, 2026. Labour Code amendments take effect on November 1, with higher late-payment penalties and clearer rules on final settlement. By December 31, every employer, whatever its size, must have an objective and gender-neutral pay structure.

This edition of RegRally covers employment law developments for employers, HR and payroll teams in Lithuania and across the EU, including the State Labour Inspectorate’s warnings on wage deductions and occupational safety, the draft rules on platform work and a GDPR fine for leaving erasure requests from job candidates and former employees unanswered.

Reminder: All employers must have a compliant pay structure by 31 December 2026

Deadline: December 31, 2026 | Source: Labour Code, Article 140(3)
Link | Our overview of the Pay Transparency Directive implementation in Lithuania

31 December 2026 is the deadline for employers to approve, or review and, where necessary, amend the pay structure (darbo apmokėjimo sistema, DAS) under Article 140 of the Labour Code and Article 23(4) of Law No XV-969. By that date, all employers, irrespective of their size, sector or nature of activities, must have objective and gender-neutral pay systems ensuring employees’ right to fair remuneration.

The pay structure will be mandatory for all employers and must be made available to all employees. Before approving or amending it, the employer must complete the information and consultation procedures required under the Labour Code.

The pay structure must group positions according to objective and gender-neutral criteria and set out the forms of pay, salary amounts or ranges, rules for additional remuneration, allowances and bonuses, and the criteria and procedure for salary indexation and increases. Employers with fewer than 50 employees are exempt from the obligation to set salary increase criteria and procedure.

Positions involving the same work or work of equal value must be assigned to the same position group, and equal pay must be ensured for men and women performing the same or equal-value work.

Why it matters

There is no small company exception. The obligation applies to all employers, irrespective of size, sector or nature of activities.

The grouping decisions made now will be carried forward. The same position categories will be used for pay transparency reporting from 2027, so inconsistencies in the grouping will carry into the reported data.

What we recommend for employers

Employers should:

• complete the preparation or review of their pay structure by 31 December 2026 and ensure that all positions are grouped using objective and gender-neutral criteria in line with Article 140(3) of the Labour Code
• map all existing roles against the pay structure and assign each employee to the appropriate position group
• check whether information and consultation procedures are required before approval or amendment
• align the internal categories with the categories that will later be used for pay transparency reporting

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Breaches of occupational safety rules can move employers to a higher accident insurance tariff group

Date: September 3, 2026 | Source: Valstybinė darbo inspekcija (State Labour Inspectorate, VDI)
Link

VDI reminded employers that companies which fail to comply with occupational safety and health requirements may be assigned to a higher accident insurance contribution tariff group. Reassignment follows a serious or fatal accident at work caused by non-compliance, or a suspension of operations by inspectors during an inspection, for example where risks of falls from height, chemical exposure, falling objects, equipment faults or soil collapse are found without documented prevention measures.

Between 1 November 2025 and 27 August 2026 VDI issued 77 reclassification notices; the companies concerned will pay the higher social insurance contributions from 1 January 2027. Construction accounted for about half of the notices and manufacturing for a quarter, with the remainder in retail, agriculture, transport and utilities.

What we recommend for employers

Employers should run the VDI inspection checklists for their activity against current workplace risks and close any documented gaps before an inspection or incident triggers reclassification.

Finance teams should note that a reclassification notice issued in 2026 affects contributions from 1 January 2027 and budget accordingly.

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Reminder: New rules on business trip daily allowances from 1 October 2026

Applies from: October 1, 2026 | Source: Government Resolution No 518 of 1 July 2026 (TAR)
Link | Our view on the new per diem rules

From 1 October 2026, new rules for paying business trip daily allowances (per diems) apply, adopted by Government Resolution No 518 of 1 July 2026. The State Labour Inspectorate has urged employers to review their business trip procedures, pay systems and other related internal documents ahead of the change. The new rules change when per diems can be reduced, add information guarantees for employees and introduce a new calculation method for certain trips.

For business trips shorter than 7 calendar days, where there is no collective agreement, per diems can no longer be reduced unilaterally by the employer through an internal policy.

For business trips lasting 7 calendar days or longer, reduced per diem rates may be established in an internal normative act, but may not be lower than 65% of the maximum rates established by the Government.

Reduced per diem rates may also be established in a collective agreement but may not be lower than 50% of the maximum rates.

An employee must know in advance what reduced per diem rate will apply to the business trip.

If the first or the last day of a trip lasts less than four hours, 20% of the applicable per diem rate is paid for that day.

No per diems are paid for a one-day business trip within Lithuania. For trips abroad, the Labour Code duty to pay per diem remains.

Why it matters

The changes concern every employer whose employees travel on business. The Inspectorate stresses that the review should cover not only internal documents but also how trips are organized in practice, how employees are informed and how per diems are calculated. HR, payroll and accounting processes need to be able to record trip duration, inform employees on time and calculate the amounts due correctly.

What we recommend for employers

Employers should:

• review the business trip procedure, the pay system and other related internal documents against the new rules
• identify whether reduced per diem rates are currently provided for and ensure that they comply with the new 7-day, 65% and 50% rules
• check that HR, payroll and accounting processes can record trip duration, inform employees on time and calculate the per diems due
• make sure employees know in advance when and at what rate reduced per diems will apply
• where a works council or trade union operates in the company, assess and, where applicable, carry out the information and consultation procedures set out in the Labour Code before setting per diem amounts or their payment rules in a local normative act

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European Commission proposes Fair Labour Mobility package with digital A1 certificates

Date: September 15, 2026 | Source: European Commission
Link

The European Commission adopted a Fair Labour Mobility package of one communication and five legislative proposals. The package includes a European Social Security Pass (ESSPASS) for fully online issue of social security documents, including the portable document A1 for posted workers, through the EU Digital Identity Wallet; a Skills Portability Act with standardised digital qualification formats and faster recognition procedures; and a strengthened mandate for the European Labour Authority, with risk-assessment tools, inspection liaison officers, coverage of third-country nationals and illegal employment, and simplified mediation.

Digitalisation would be phased in after adoption by the Parliament and the Council, with the portable document A1 within one year and the European Health Insurance Card within three years; the qualification and ELA changes are planned for 2028 to 2030.

What we recommend for employers posting staff across borders

Employers that post staff across borders should follow the ESSPASS proposal, since digital A1 certificates will change how postings are documented and verified during inspections.

Groups employing third-country nationals in several Member States should note the proposed extension of the European Labour Authority’s remit to such workers and to concerted cross-border inspections.

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State Labour Inspectorate: employers may not make deductions from wages at their own discretion

Date: September 21, 2026 | Source: Valstybinė darbo inspekcija (State Labour Inspectorate, VDI)
Link

VDI warned that an employer may not make deductions from an employee’s wages at its own discretion. Under the Labour Code, deductions are permitted only in the cases provided by law: recovery of unspent advances paid for work purposes, correction of arithmetical overpayments, compensation for damage caused through the employee’s fault subject to the statutory conditions, and, in limited cases, recovery of pay for annual leave taken in excess of entitlement.

For damage claims the employer must establish individual fault; it may not presume that all employees on shift are responsible for missing stock. Liability is generally capped at three average monthly wages (six for gross negligence), with full compensation only in cases such as intentional damage or crime. The written claim must be made within one month of discovery, a single deduction may not exceed one month’s wages, larger amounts require the Labour Disputes Commission, and “savings” schemes or advance acknowledgements of future damage are prohibited. Statutory limits of 10 to 50 percent of pay apply to deductions.

What we recommend for employers

Employers should remove any clauses in employment contracts, material liability agreements or internal rules that provide for automatic or collective deductions, and route damage claims through the statutory procedure.

Payroll should apply the one-month cap on single deductions and the statutory percentage limits and keep written records of the employee’s consent or the Labour Disputes Commission decision where required.

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Reminder: Second Labour Code Amendment

In force from: November 1, 2026 | Source: Law No. XV-1058 amending the Labour Code
Link | Our view on the Second Labour Code Amendment

Significant amendments to the Labour Code were adopted and will enter into force on 1 November 2026.

Key changes include:

• Late payment penalties for employment-related payments are increased. Default interest will be linked to the consumer price index and multiplied by five, creating stronger incentives for employers to pay wages and other employment-related amounts on time.
• Clearer final settlement rules apply upon termination. Amounts up to one average monthly wage must generally be paid on the employee’s last working day or, if otherwise agreed, within up to 10 working days. Larger amounts may be deferred, but for no longer than three months after termination.
• Employees retain full remuneration for working hours reduced before public holidays. Where remuneration depends on work output or performance standards, employees must receive average remuneration for the shortened hours.
• A new ground for termination applies where an employee no longer meets the statutory good-reputation requirements applicable to their position.
• Highly remunerated employees earning at least twice the national average wage may agree to greater contractual flexibility, including deviations from a wider range of Labour Code provisions and certain aspects of employment termination. Their probationary period may be extended to six months instead of the general three-month limit.

What we recommend for employers

Employers should familiarise themselves with the upcoming amendments and assess whether the new flexibility introduced by the Labour Code could be beneficial in their organisation.

In particular, employers may wish to consider opportunities relating to:

• the engagement of highly remunerated employees
• termination processes
• internal investigation procedures
• settlement arrangements upon termination of employment

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The Government approved draft amendments on platform work; parliamentary approval is still required

Date: September 30, 2026 | Source: Ministry of Social Security and Labour (SADM, Lithuania) — draft legislation
Link

On 30 September 2026, the Government approved draft amendments to the Labour Code and related laws prepared by the Ministry of Social Security and Labour to transpose the EU Platform Work Directive. This is a step in the legislative process: the proposals are not yet in force and must still be considered and adopted by the Seimas.

The draft seeks to improve the determination of employment status for people working through digital labour platforms. The assessment would be based on the actual circumstances of the work rather than solely on the wording of the contract, including indicators of subordination and the worker’s freedom to choose whether and when to work, provide similar services to third parties and negotiate or reject service terms without adverse consequences.

The proposals would also regulate algorithmic management. Platforms would face restrictions on collecting sensitive, private or work-unrelated data and would have to provide clear information about automated monitoring and decision-making systems, their criteria, the data used and their effects. Platform workers would have rights to explanations, human review and challenges to automated decisions. Final decisions affecting workers’ rights, such as dismissal or account blocking, would have to be taken by a person.

The draft also provides for regular checks against discrimination, data portability, and information and consultation before automated monitoring or decision-making systems are introduced or changed.

What we recommend for platform operators and companies using platform workers

Platform operators and companies using platform workers should monitor the proposal as it proceeds through the Seimas and assess its potential impact, without treating the draft requirements as already applicable.

As a preparatory step, companies may review contractor classification, identify algorithmic monitoring and decision-making tools, map the data used by those systems and assess whether human review and challenge procedures would be available if the amendments are adopted.

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CNIL fines EXTIA EUR 300,000 over unhandled erasure requests from candidates and former employees

Date: September 9, 2026 | Source: CNIL (French Data Protection Authority)
Link

The CNIL fined the IT and engineering consultancy EXTIA EUR 300,000 for failing to respect the right to erasure and the information obligations under Articles 12 and 17 GDPR. The audit was carried out in April 2025 following complaints and as part of the EDPB Coordinated Enforcement Framework action on the right to erasure.

It was found that of 265 erasure requests received in 2024, mostly from job candidates and former employees, more than three quarters had not been handled or had been handled inadequately.

Twelve requests were not processed at all, 166 people were not informed of the outcome of their request and 27 were informed late, beyond the one-month deadline.

The fine reflects the number of people concerned and the fact that the company has already been reminded of its obligations twice.

What we recommend for employers

Review the process for handling erasure requests from all data subjects: intake, identity verification, responsible persons, searches across relevant systems, applicable retention exceptions and deletion from active and backup systems.

Respond to every request within one month, including where it is refused, partly granted or the data have already been deleted, and retain evidence of the assessment, action taken and response.

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How ECOVIS ProventusLaw can help employers

ECOVIS ProventusLaw advises employers in Lithuania, Latvia and Estonia on employment, labor and migration law: employment contracts and internal rules, pay systems, terminations and restructuring, labor disputes, employment of foreigners and employment due diligence in transactions. We work with employers of every size and sector, from manufacturers, transport and logistics groups and defense industry investors to IT businesses, fintechs and start-ups.

Our employment lawyers can help you:

• prepare or review the pay structure (DAS) and group positions on objective and gender-neutral criteria
• review employment contracts, local normative acts and internal rules against the Labour Code amendments and the new per diem rules
• carry out a labor law due diligence of contracts, material liability agreements, wage deduction practices and business trip procedures
• handle dismissals, employee transfers, settlement arrangements, collective redundancies and consultation with employee representatives
• assess whether people working under civil-law contracts or through platforms are contractors or, in fact, employees
• handle candidate and employee data, retention periods and data subject requests, including erasure

Contact us if your pay structure or employment documents need review.

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Why ECOVIS ProventusLaw

• Ranked employment practice. ECOVIS ProventusLaw is consistently ranked in Chambers and Partners’ Europe guide (Employment) and The Legal 500 among the leading law firms in the employment and labor law sector in Lithuania.
• More than 20 years of experience. Employment law has been one of the firm’s key practice areas for more than 20 years.
• Local lawyers in Lithuania, Latvia and Estonia. Our employment lawyers advise under each country’s own labor law. Employers with staff in several Baltic countries work with one contact.
• Support from market entry. We advise companies setting up in Lithuania, Latvia and Estonia on their employee strategy, employment documents and migration, including work permits, residence permits and national D visas.
• Full range of employment services. We advise on employment contracts and dismissals, internal policies and employee handbooks, share options, secondment of employees, employment of foreigners, labor taxation, unfair competition by employees and dispute resolution.