Lithuania is one of the three Baltic states, along with Latvia, to Lithuania’s north, and Estonia, to the north of Latvia. Lithuania declared its independence from the Soviet Union in 1990, the first Soviet republic to do so, although its status was unclear until the Soviet Union actually dissolved in 1991. Lithuania joined the European Union in 2004 and has used the euro as its currency since 2015. Lithuania has a diverse economy. Food processing, plastics and chemical products (particularly fertilizers), and furniture are all major industries. It also has a vibrant financial sector, with many international banks doing business in the country. IT and communications technologies are growing industries, as well.
There are nine types of employment contracts in Lithuania. Full-time employees have either an indefinite or a fixed-term contract. The maximum term of a fixed-term contract is two years. Multiple, consecutive fixed-term contracts for the same job function may not be longer than a combined two years. A series of consecutive fixed-term contracts for one job function that exceeds this two-year limit is automatically converted into an indefinite contract.
Multiple consecutive fixed-term contracts for different job functions are converted to indefinite-term contracts if their combined term is longer than five years. No more than 20% of employees working for the same employer may work on fixed-term contracts. Employment contracts in Lithuania must be in writing and executed in duplicate, with the employer and employee each receiving a copy. An employer with more than three employees must immediately register the contract in the government employment contracts register. To be effective, an employment contract is only required to contain an agreement between the employer and the employee regarding the employee’s job function, the employee’s compensation, and the workplace.
For any employee who will work for more than one month, the employer must provide the following in writing prior to start date:
The standard workweek is 40 hours over five days. Flexible working hours are becoming more common in Lithuania, and some employees may do part of their work outside of normal working hours.Overtime is capped at eight hours per week (which can be increased to 12 hours if the employee consents) and 180 hours per year. Employees are paid 150% of their standard hourly rate for overtime, and 200% for work on a holiday or a day the employee was not originally scheduled to work. An employee who works longer than three hours between 10 p.m. and 6 a.m. or works more than 25% of total hours during this time receives 150% of the standard hourly rate for night hours. Employees who work overtime between 10 p.m. and 6 a.m. or on a day they were not originally scheduled to work, receive 200% of the standard hourly rate, and employees who work overtime on a holiday receive 250% of the standard hourly rate.
Employees in Lithuania are eligible for paid sick leave until they either return to work or are declared disabled and unable to work. The first two days are paid by the employer at a minimum rate of 62.02% of the employee’s average monthly pay. Beginning on the third day, an eligible employee receives a social security payment.The minimum social security payment is 15% of the employee’s average monthly pay in the previous quarter. Employees who take time off to care for a sick family member also receive compensation from social security if eligible.
Female employees receive 126 days of maternity leave. The mother will be entitled to 70 days of leave after the birth if there are complications or in the event of multiple births. During her maternity leave, the mother, assuming she meets eligibility requirements, receives a social security maternity benefit, normally 77.58% of her normal pay. Fathers receive 30 days of paternity leave, which may be taken at any time during the first three months after the birth, or the first six months for a multiple birth or if the birth had complications. If the father is eligible, he will also receive a social security benefit during this leave, normally 77.58% of his normal pay.
Parents who adopt a child are entitled to three months of childcare leave at any time. The employer must be given a minimum of three days of written notice. The guardian(s) of a child, whether a biological parent, adoptive parent, or another person, is entitled to take childcare leave until the child is three years old. Social security childcare benefits will be paid to employees who meet certain eligibility criteria during this leave, at rates that vary depending on the length of the leave.
Employees in Lithuania are entitled to a monthly minimum wage. Bonuses may be paid at the discretion of the employer. They are often performance-based.
Employees receive 20 days of annual paid leave. After 10 years with the same employer, an employee is entitled to an additional three days of annual leave, and one more day is added every five years after that. The employer schedules employees’ annual leave in accordance with a collective agreement, agreement between the employer and the workers’ council, or the terms of another applicable agreement or law. Several classes of employees are entitled to additional leave. Employees who are under 18 years old, disabled, or single parents raising a child under 14 or a disabled child under 18 receive 25 days, and one half-day off per month or, if they prefer, two fewer working hours per week. Employees whose jobs are unusually stressful or dangerous are entitled to 41 days of leave per year. Employees with three or more children under the age of 12 are entitled to two extra days off per month, or four fewer working hours per week.
Lithuania has national healthcare. Employees contribute 6.98% of their gross salary for health insurance. There are also private clinics, although few residents of Lithuania have private health insurance.
Under an indefinite-term or fixed-term contract, an employer may only terminate an employee when the employee is not at fault if:
Before terminating an employee who is not at fault, the employer must transfer the employee to a different job if one is available and the employee consents. In this situation, the employer must provide notice of termination in writing one month in advance if the employee has worked for the employer for one year or longer, and two weeks in advance if the employee has worked for less than one year.
The notice periods are doubled if the employee is within five years of the legal retirement age and tripled if the employee is raising a child under 14 years old, employees raising a disabled child under 18 years old, disabled employees, and employees within two years of the legal retirement age. The terminated employee must be paid severance of two times the usual average monthly salary, or half the amount paid in one average month if the employee has worked for the employer for less than one year. Employees who have worked for the employer for longer periods of time are also entitled to a long-term service allowance determined by the employee’s length of service.
An employer may dismiss an employee without notice and with no severance payment if the employee is at fault because of serious misconduct, including sexual harassment of other employees, an unauthorized absence lasting an entire workday or shift, or deliberately damaging the employer’s property. In all cases, the written notice of termination must state the reason for the termination and the legal basis for it.
An employee on an indefinite-term or fixed-term contract can terminate the contract by submitting written notice of resignation 20 calendar days in advance. In a few situations, the employee may resign with only five working days of written notice. If an employee terminates a contract in this manner, the employer is obligated to pay the employee twice the employee’s normal average compensation, or one average month of salary if the employee has worked for the employer for less than one year.
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