ECOVIS ProventusLaw invites you to read about current trends and news in employment law and how companies in Lithuania can stay compliant.
Stricter Penalties for Illegal Employment: New Fines and Public Listing Begin July 2024
From 1 July 2024, penalties for employing workers illegally will increase. Employers who fail to sign employment contracts or notify ‘Sodra’ at least one working day before work starts will face fines of EUR 2,772 to EUR 11,088 per worker. Repeat violations will result in fines of EUR 5,544 to EUR 22,176 per worker.
Additionally, from 1 July, employers who commit legal violations will be publicly listed on the VDI website for one to three years from the decision date.
Our recommendations:
To stay compliant and avoid fines, we recommend:
1. Ensure every employee has a signed employment contract before starting work.
2. Notify Sodra at least one working day before an employee begins work.
3. Verify if the employee needs a work or temporary residence permit.
Lithuanian Parliament Tightens Rules on Foreign Employment with New Amendments to Employment Law
On 20 June 2024, the Parliament of Lithuania adopted amendments to the Law on Employment, making it harder to employ foreigners. Key changes include:
1. Employers must have operated in Lithuania for at least 6 months, have no outstanding fines/debts, and no penalties for false data reporting.
2. Foreign workers must be employed in the inviting company’s field of activity.
3. Third-country nationals cannot work under visa-free regimes or visas/residence permits from other EU countries, except for highly qualified workers.
4. Foreigners can get a work-based residence permit if qualified and with 1 year of experience in the last 3 years.
The list of missing professions is abolished from 1 January 2025.
5. A strict quota of 40,000 foreign workers (1.4% of the population) is introduced from 1 January 2025.
6. Employers must hire foreign workers full-time, allowing multi-employer contracts with up to 4 employers.
From 1 January 2025, employers who fail to pay the fixed wage or grant unpaid leave to foreign workers will face a 1-year ban on employing foreigners.
State Labour Inspectorate Clarifies ‘Workations’: Must Adhere to Remote Work or Secondment Regulations
The State Labour Inspectorate clarifies that “workations” are not directly regulated by current legislation and should follow either the remote working or secondment model:
1. Secondment: Under Article 107 of the Labor Code, assignments outside an employee’s regular workplace must be formalized as secondments. The employer must pay the regular salary, any applicable daily allowances, and reimburse expenses for transportation, lodging, etc.
2. Remote Work: The Labor Code defines remote work as duties performed remotely using ICT, agreed upon with the employer. Details about the work location, tools, and reporting must be in writing. Employers must compensate for any additional tool-related expenses and ensure compliance with safety regulations.
Employers and employees can arrange remote work that fits the employee’s preferred location while complying with legal standards.
Our recommendations:
1. Assess and formalize the employee’s work location properly, as the employer is responsible even when the employee is off-site.
2. Clearly define remote work arrangements in writing, including location, tools, usage rules, and reporting.
3. Regularly update internal policies to align with current labour regulations on business trips and remote work.
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