- Overview: Lithuania
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Lithuania
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Lithuania Guide below will help you understand the nuances of labor legislation in the country.
There are two main reasons for companies hiring foreign workforce:
- Expanding into foreign markets to sell company product or products there. In this case, companies hire sales representatives who would exclusively represent their product in the target market and sell it to their local client base.
- Hiring the right foreign talent with a unique expertise, often related to IT sphere that cannot be found in the home country or that costs less compared to local specialist with similar skills.
After you have found the right candidate, the question is how to hire and provide compensation to this person so you as a business remain 100% compliant when working with global workforce. Another thing to consider is whether you want to keep the talent long-term and how you can do that.
If you need to hire foreign workforce in Lithuania so you can expand there, then our Global Employer of Record solution may be of help. We help you legally hire and reward your foreign workforce by making them employees via a global employment outsourcing service. This is simple as employ your in-house workforce with the only difference that workers can live anywhere in the world and Acumen International would be their legal employer on your behalf. This means we would bear all employment risks, not you. Also, we manage bonuses, vacations, sick leave and can rent the office and a car for your foreign sales representatives if that is what you need.
With our solution, you can test new foreign markets before deciding whether you are going to get established there. You gain flexibility and expand with reduced costs, and easily withdraw from the unattractive countries.
We are experts in global workforce employment in Lithuania, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Lithuania.
Hiring and Firing Workforce in Lithuania Guide
# Employment contracts
An employment contract must be concluded in writing Each employment contract shall have the following terms: workplace and functions of the employee. Two copies of the written employment contract must be drawn up and signed by the employer (or his authorised person) and by the employee. One signed copy must be handed to the employee, whereas the other copy must be kept by the employer. The employment contract must, on the same day, be registered in thenemployment contracts record book. Such a book is not mandatory if the employer is an individual employing three or less employees.
Employment contracts may be non-term, fixed-term, temporary, seasonal, on additional work, secondary job, with home workers, on the supply of servicesnand other. As a rule, an employment contract is concluded for an indefinite period of time (non-term).
# Minimum (Statutory) Employment Rules and Regulations in Lithuania
# Hours of work:
Working time may not exceed 40 hours per week. A daily period of work must not exceed 8 working hours. Exceptions may be established by laws, Government resolutions and collective agreements.
Maximum working time, including overtime, must not exceed 48 hours per 7 working days. Employees working in specific sectors (e.g. health care, care (custody), child care institutions, specialized communications services and specialised accident containment services and security may be required to work up to 24 hours per day. The duration of working time of such employees must not exceed 48 hours per seven-day period, and the rest period between working days must not be shorter than 24 hours. The list of such jobs is approved by the Government. For employees employed in more than one undertaking or in one undertaking but under two or more employment contracts, the working day (including breaks to rest and to eat) may not be longer than 12 hours.
# Probation period:
The parties may agree on a probation period. It may be used to assess the suitability of an employee for the agreed work, as well as, at the request of a person taking on a job to see if the job is for him. The probation period must be set in an employment contract. A probation period may not be longer than three months. Longer probation periods may be applied in certain cases specified by laws but the probation period cannot exceed six months. Currently there are no laws which specify when trial period can exceed six months.
A trial to assess the suitability of an employee for the agreed work may not be established when employing persons:
- under 18 years of age;
- to a post by competition or elections, as well as those who have passed qualification examinations for a post;
- due to a transfer by agreement between employers, to work for another employer;
- in other cases specified by labour laws.
If an employer is not satisfied with the performance of an employee during the trial period, he may dismiss the employee from work before the expiry of the trial period by giving the employee 3 business days written notice, without paying him a severance pay.
# Annual leave:
The minimum annual holiday is normally a period of 28 calendar days. 35- days holiday are granted to certain groups of employees (under 18 years of age, single parents, disabled persons, etc.) Annual leave may not be shortened for part-time employees. The holiday for part time employees is calculated proportionally to how much they work, however annual holiday may not be shortened for part-time employees and must last at least 28 calendar days.
# Parental leave:
Women are entitled to maternity leave of 70 calendar days before child birth and 56 calendar days after child birth (in the event of complications or the birth of two or more children – 70 calendar days). This leave is added up and granted to the woman as a single period, regardless of the days used prior to the birth.
The amount of maternity pay is calculated on the basis of the employee’s income received within 12 calendar months prior to the month leave began. Where more than one child is born, the amount of maternity allowance shall be paid for additional 14 days.
# Sick leave:
An employer may request an applicant to undergo a health examination. Disabled persons as well as ill persons in the meaning of Lithuanian labor laws enjoy wider protection in the employment relations.
# State minimum salary:
The minimum wage in Lithuania is €380 per month ($425.23),dividing to €2.31 per hour ($2.57). Lithuania’s minimum wage was last changed in July 2016.
# Employee dismissal:
In all cases the termination of an employment contract must comply with the terms of the contract. In most cases, there are certain minimum steps which must be followed before termination to avoid the termination amounting to an unfair dismissal. An employer must be able to demonstrate a “potentially fair”reason for dismissal.
An employment contract will expire:
- upon the termination thereof on the grounds established by the Labour Code and other laws (termination of the employment contract by mutual agreement, upon contract’s expiry, upon the notice of employee, due to circumstances beyond the Employees control, on the initiative of an Employer without any fault on the part of an Employee;
- upon the liquidation of an employer without legal successor; and
- upon the death of an employee. For every type of termination the procedural requirements differs.
An employment contract must be terminated without notice in the following circumstances:
- upon an effective court decision, or when a court judgement impose a custodial sentence on the employee, which prevents him from continuing his work;
- when an employee is deprived of special rights to perform certain work in accordance with the procedure prescribed by laws;
- upon the demand of bodies or officials authorised by laws;
- when an employee is unable to perform these duties or work in accordance with an opinion of the medical commission or the commission for the establishment of disability;
- when a parent, statutory representative, doctor or school of an employee between the age of 14 and 16 years demands that the employment contract be terminated;
- upon the liquidation of an employer.
An employment contract will expire upon the death of an employer if the contract was concluded for the supply of services to him personally, as well as when the employer has no legal successor.
An employer will be entitled to terminate an employment contract without giving an employee prior notice under the following circumstances:
- when the employee performs his duties negligently or commits other breaches provided that disciplinary sanctions were imposed on him at least once during the last 12 months;
- when the employee commits a gross breach of duties. The term of “gross breach of duties” is specified in the Labour Code.