Remuneration

In Lithuania, there are no universally applicable collective agreements regulating rates of pay in separate economical activities.

Definition and structure of remuneration

The remuneration of staff working at companies, institutions and organisations under employment contracts are regulated by the Labour Code of the Republic of Lithuania.
The Labour Code stipulates that remuneration constitutes pay for work carried out by a worker under an employment contract. The wage or salary of a staff member consists of:
1) The base remuneration (base rate), i.e. an hourly rate or a monthly salary, or a fixed part of a job-based salary.
2) The additional part of a remuneration set by agreement between the parties or paid on the basis of the provisions of labour law or the remuneration framework applicable at the workplace.
3) Bonuses for acquired qualifications.
4) Bonus payments for additional work or additional duties or tasks.
5) Premiums for completed work agreed on between parties or paid on the basis of provisions of labour law or the remuneration framework applicable at the workplace.
6) Premiums awarded by an employer at their own initiative as an incentive for employees’ good work, their activity or results, or those of a company, establishment or an employee group.
When calculating average remuneration, all listed constituent parts of the salary or wage are included with the exception of bonuses paid at an employer’s initiative.
Wages and salaries must be paid in monetary form Services or goods provided by an employer cannot be deemed payment of a remuneration.
Each employment contract must include remuneration per month (monthly salary) or remuneration per hour (hourly rate), except when it is provided for in the provisions of labour law, in which case an employment contract must include a reference to the corresponding provision of labour law.
Remuneration constitutes a mandatory clause in an employment contract. It may only be amended with the written consent of an employee. An employee’s refusal to work for reduced remuneration may not be used as legitimate grounds for terminating an employment contract.

Remuneration system and non-discrimination

The Labour Code stipulates that a remuneration system must be determined in a collective agreement. When there is no such collective agreement, in workplaces with an average of 20 or more employees, a remuneration system must be approved by the employer and made available to all employees to review. The remuneration system shall specify:

• Categories of employees by job descriptions and qualifications and payment forms for each of them.
• Salary levels (minimum and maximum).
• Grounds and procedure for awarding additional pay (bonuses and premiums).
• Procedure for salary or wage-indexing.

Employers are obliged to establish a remuneration system so that any discrimination on sexual or other grounds is prevented, i.e. equal pay for equal work. Equal work means carrying out professional activity that, based on objective criteria, is the same or similar to another professional activity to the extent that the two employees could be swapped without any significant cost to the employer. Equal work means that, based on objective criteria, it requires the same qualifications and is of the same value to the employer in pursuit of the operational goals as other comparable work.
In the implementation of the principles of employee non-discrimination, an employee’s pay without discrimination means non-discriminatory pay and all additional earnings in cash or in kind directly or indirectly received by an employee from an employer for his/her work.

Minimum monthly wage

Minimum monthly wage (minimum hourly rate or minimum monthly wage) is the minimum amount permitted for unqualified work paid to a worker per hour, or for the whole standard working time per calendar month.
The standard working time of an employee is forty hours per week, unless the provisions of labour law establish reduced standard working hours for the employee, or the parties agree on part-time work.
The Labour Code that came into effect on 1 July 2017 established a new provision stating that the minimum monthly wage may only be paid for unqualified work. Unqualified work is work that does not require any special qualifications or professional skills.
The Labour Code stipulates that the minimum hourly rate and minimum monthly wage shall be approved by the Government of the Republic of Lithuania.
An employee’s monthly wage may not be lower than the minimum wage approved by the Government. The collective agreements may provide for higher minimum hourly rates and minimum monthly wages than the ones approved by the Government. Under Government resolution No 516 of 28 June 2023, the minimum hourly wage is € 5,65 and the minimum monthly wage €924.

Pay rise

For work on rest days not included in the work (shift) schedule and for work on holidays, at least double the employee's regular rate of pay shall be paid.
For work during night shifts and for overtime work, at least one and one-half times the employee’s regular rate of pay shall be paid.
For overtime work on a rest day not included in the work (shift) schedule or for overtime during a night shift, at least double the employee's regular rate of pay shall be paid, while for overtime work on holidays, at least two and a-half times the employee’s regular rate of pay shall be paid.
At an employee's request, work time on rest days or holidays, or overtime multiplied by 1.5, 2.0 or 2.5, respectively, may be added to the time of annual leave.
For work not carried out under normal working conditions and when the scope of work is increased, an increased amount, compared to normal working conditions, shall be paid; specific amounts shall be provided for in collective agreements and employment contracts.
Employees working on the move or in outdoor conditions, or whose work is related to travelling or driving will be compensated based on related higher expenses for the actual time spent performing this type of work. Such compensation is not to exceed 50% of the base pay (base rate) and is paid when an employee does not receive any mission expenses.

Procedure for remuneration payment

At least once per month, an employer must provide an employee in writing or electronically with a record of the calculated, paid and deducted amounts and hours worked, with a separate indication of overtime hours worked.
The remuneration shall be paid to employees at least twice a month or once a month if requested by an employee. In any case, the remuneration for a calendar month may not be paid later than ten work days after the end of that month, unless provided otherwise in the provisions of labour law or the employment contract.
Deductions from an employee’s remuneration may only be made in cases provided for in the Labour Code or other legislation.
The Labour Code provides for the following cases when deductions are allowed:
1) To recover amounts assigned to the employee and not used as intended.
2) To recover amounts overpaid due to calculation errors.
3) To compensate the employer for damages caused to them through the fault of the employee.
4) To recover holiday pay for holidays in excess of the right to the entire duration or part of annual leave, when the employment contract is terminated by the employee without good reason (Art. 55 of the Labour Code) or by the employer through the fault of the employee (Art. 58 of the Labour Code).

Late payment of remuneration and other payments due to employment relations

When the payment of remuneration or other payments related to employment relations is falling behind due to the fault of the employer, in addition, the employee shall be paid a late fee in the amount approved by the Minister of Social Security and Labour of the Republic of Lithuania, unless a higher late fee is set in the provisions of labour law. Currently, the approved rate for the late fee is 0.07%. The late fee shall be calculated from the day following the day when a respective payment should have been made.
In the case of the employer’s bankruptcy proceedings or an out-of-court bankruptcy procedure, calculation of the late fee shall cease when a court order on bankruptcy proceedings comes into effect or from the day of the creditors’ meeting where a decision is made to initiate an out-of-court bankruptcy procedure.