Lithuania: Key changes to the Labour Code for businesses starting in 2025

published on 12 December 2024 | reading time approx. 5 minutes

In October 2024, important amendments to the Labour Code and related regulations were adopted, which will directly impact businesses. While many of these changes will come into effect on 1 January 2025, some have already been implemented.

Agreement on Additional Work »
Changes in Overtime Payment »
Overtime Pay on Pre-holiday Days »
Parental Leave: Recent Amendments to the Labour Code and Practical Implications »
Workers' Council Elections »
Prohibition of Violence and Harassment »
Reporting to "Sodra" About Hiring a Company Executive »
Long-term Employment Bonus for Employees Fired Due to Bankruptcy »
Changes for Temporary Employment Agencies »
Document Retention Periods »
Important Change: Minimum Monthly Salary Increase from 1 January 2025 »

These amendments may bring significant shifts in the labour relations between employees and employers, employee rights, and organizational processes within companies. Below is an overview of the key changes that may affect your business.

Agreement on Additional Work

Starting from 1 January 2025, an important amendment to the Labour Code will come into effect. This change requires that agreements on additional work specify not only the time, scope, and compensation for the additional work, but also the procedure for granting additional rights or duties. This update aims to prevent uncertainties, especially when it comes to granting annual leave or other employee guarantees related to additional work.

It is essential to note that this provision concerning the procedure for granting additional rights or duties will only apply to new agreements made after 1 January 2025. However, employers and employees may choose to update agreements made before 31 December 2024, to align with the new requirements set to take effect in 2025.

Changes in Overtime Payment

Starting 1 January 2025, overtime work during holiday nights must be compensated at no less than 2.5 times the regular wage. Previously, the Labour Code did not specify a clear overtime pay rate for work on holiday nights, and this new regulation ensures fairer compensation for employees working at night during holidays.

Additionally, from 2025 onward, employers will only be able to assign overtime work if they have received written consent from the employee. Previously, verbal consent was sufficient, but now this must be formally documented in writing, ensuring employees' right to refuse overtime work.

Overtime Pay on Pre-holiday Days

Another significant change is that if it is not possible to reduce working hours on the day before a holiday by one hour, as required by the Labour Code, employers must compensate that hour as overtime. This regulation has already been in effect since 25 October 2024. Employers must ensure that the reduction of working hours or overtime compensation on pre-holiday days complies with the new requirements.

Parental Leave: Recent Amendments to the Labour Code and Practical Implications

Lithuanian labour law is continuously evolving to ensure the rights of parents, adoptive parents, and guardians to care for their children after birth or adoption. One of the most significant changes introduced in the recently amended Labour Code concerns parental leave, specifically the non-transferable 2-month portion of the leave. This issue has been particularly important, as there were many challenges in practice regarding the allocation and administration of this leave.

The new provisions of the Labour Code clearly state that the non-transferable 2-month portion of parental leave consists of 62 calendar days. Parents, adoptive parents or guardians can use these days as follows: either all at once or in parts, also alternating with another parent, adoptive parent or guardian. These changes provide greater clarity and simplify the administration of parental leave. Parents can plan more effectively when and how they will take this leave, reducing the likelihood of mistakes in calculating days and allocating the leave.

Workers' Council Elections

If workers' council elections do not take place due to insufficient candidates, they must be repeated within six months from the decision to consider the elections invalid. The previous version of the Labour Code did not set a specific time frame for organizing repeat elections, and this change ensures clearer and more efficient election processes. This amendment is already in effect since 25 October 2024.

Prohibition of Violence and Harassment

Starting 1 January 2025, the Labour Code will explicitly prohibit violence and harassment not only against employees but also against supervisors. This regulation ensures that all labour relations are based on respect and appropriate conduct. The amendment clarifies that inappropriate behaviour by an employer or company executive will be considered violence or harassment, subject to penalties.

Violations related to the prevention of violence and harassment may result in fines ranging from 500 euros to 3,000 euros for company executives or responsible individuals who fail to ensure necessary preventive measures and assistance for victims. Additionally, the regulation establishes the requirement for regular training on the prevention of violence and harassment.

Reporting to "Sodra" About Hiring a Company Executive

Starting 1 January 2025, companies will be required to notify the Social Insurance Fund Board (Sodra) about the hiring of a company executive no later than one hour before the actual start of work. Previously, companies had to notify Sodra one working day in advance. The new regulation will ensure quicker and more accurate reporting about the start of a company executive’s employment. Non-compliance with this rule will be considered illegal employment.

Long-term Employment Bonus for Employees Fired Due to Bankruptcy

Starting 1 January 2025, employees who are dismissed due to bankruptcy will have the right to a long-term employment bonus, just like employees who are dismissed due to company liquidation. This bonus will be available to employees with at least five years of service, and its amount will depend on the length of their employment.

Changes for Temporary Employment Agencies

Starting 1 January 2025, the requirements for companies wishing to be included in the temporary employment agency register will be relaxed. A company’s executive may have one fine for illegal employment within the last year to be included in the register. If a company no longer meets the Labour Code’s criteria, it will be removed from the register.

Document Retention Periods

Starting 1 October 2024, changes were implemented regarding the retention periods for certain employee records. Personal files that do not fall under other categories must be kept for no longer than three years (previously ten years). Employers will also be required to retain employment contracts that were created but did not take effect for up to three years.

Important Change: Minimum Monthly Salary Increase from 1 January 2025

Starting from 1 January 2025, the minimum monthly salary will increase to 1.038 euros replacing the current amount of 924 euros. This adjustment will affect all employees entitled to the minimum wage and requires employers to ensure compliance with the new Minimum Monthly Salary rate.

These amendments to the Labour Code and other related regulations will significantly affect both employers and employees. Businesses must ensure that their internal policies, documentation, and work practices comply with these new laws. To avoid legal issues and ensure compliance with labour law requirements, it is recommended that businesses review internal documents, conduct a compliance audit, and inform employees about upcoming changes.