Global HR Compliance in Lithuania

Lithuania operates under a formal, structured employment law framework governed by the Labour Code. While contract types are flexible and termination grounds are clear, administrative and procedural accuracy is critical, particularly for foreign employers without a local legal entity. Requirements around registration, notice, contract form, and leave calculations are strictly enforced, and errors around overtime or fixed-term structuring can expose companies to reclassification risk or litigation.

This guide addresses the legal foundations of hiring and terminating workers in Lithuania. It is intended for employers engaging local or foreign staff, either directly or through service partners, without full incorporation, and for organisations evaluating the real cost, risk, and procedural obligations of local employment.

Hiring and Firing Workforce in Lithuania

Employment Contracts

All employment contracts must be concluded in writing, with two signed copies: one for the employer and one for the employee. The contract must specify the place of work, function, and any probationary period. For companies employing more than three people, each contract must also be recorded in a central employment contracts register.

Standard contracts are open-ended (non-term), but fixed-term, seasonal, temporary, and part-time agreements are permitted. The use of fixed-term contracts is subject to conditions, particularly if they are used for longer than 2 years or repeated more than twice in succession.

Working Hours and Overtime

Standard working hours may not exceed 40 hours per week or 8 hours per day. With overtime, the total working time must remain below 48 hours per week, averaged over four months. Overtime is restricted to exceptional cases, with a cap of 180 hours per year unless a higher threshold is approved by a collective agreement.

Employees in certain public functions (such as healthcare, security, and emergency services) may be scheduled for shifts up to 24 hours, provided weekly limits are respected. Employees with multiple contracts across one or more employers cannot exceed a total daily work period of 12 hours, including rest breaks.

Probation Period

Probation is optional but must be stated in the contract if applied. The standard probation period may not exceed 3 months. For fixed-term contracts shorter than 6 months, the probation must be proportionally reduced.

Probation is not allowed for employees under 18, those appointed by competition or election, transferred employees, or those covered by specific legal protections. Termination during the probation period is permitted with 3 business days’ written notice and requires no severance payment.

Annual Leave

Employees are entitled to a minimum of 20 working days of paid annual leave per year (28 calendar days). Employees working six-day weeks are entitled to 24 working days. Additional leave is granted to employees under 18, single parents, and those with disabilities.

Leave accrues proportionally for part-time employees but cannot be reduced below the statutory minimum. Carryover and unused leave must be administered in accordance with the employer’s internal rules and the terms of the contract.

Parental Leave

Maternity leave is granted as a combined allowance of 126 calendar days: 70 before and 56 after birth. In cases of multiple births or complications, postnatal leave is extended to 70 days. The entire period is granted as a continuous block.

Paternity leave is available for 30 calendar days during the first three months after birth. Parents may take additional childcare leave up to the child’s third birthday, either full- or part-time, with social insurance benefits funded by the state. Leave-sharing between parents is permitted.

Sick Leave

Employees are entitled to paid sick leave, funded initially by the employer (2 working days at 62.06–100% of regular wage) and subsequently by the State Social Insurance Fund Board (Sodra). Medical certification is mandatory. Employers may not dismiss an employee due to illness unless statutory leave limits are exceeded and the employee remains unfit for work.

Minimum Wage

As of 2025, the national minimum wage is set at €924 per month (gross) for full-time work, or €5.65 per hour. These figures are updated annually. The minimum applies to both local and foreign workers, regardless of sector or residency status.

Termination of Employment

Employment contracts may be terminated by:

• Mutual agreement
• Expiry of a fixed-term contract
• Employee resignation
• Employer initiative with or without fault
• Structural or economic reasons
• Court order or medical ineligibility
• Employer liquidation

Dismissals must follow strict procedural steps depending on the reason. Most terminations require notice periods ranging from 14 to 30 calendar days, with longer periods for employees with over 5 years’ service, and shortened notice under urgent economic conditions.

Severance pay ranges from 0.5 to 2 months’ average salary, depending on tenure. Termination without notice is permitted in cases of gross misconduct or repeated violations, but must be justified under the Labour Code.

Acumen International: Global Employment Services in Lithuania

Service Scope

Acumen International enables companies to engage personnel in Lithuania without establishing a local legal entity. We act as the registered employer of record, issuing compliant contracts and coordinating local administration while you retain full control over the employee’s daily function and performance outcomes.

Employer Functions Carried by Acumen

We draft and sign employment contracts on your behalf, tailored to the agreed role and contract type. Monthly payroll is processed in-country, including calculation and disbursement of salaries, taxes, and social security contributions. Employment records are maintained and updated for audit-readiness. In the event of termination, we manage notice, documentation, and severance processes in compliance with Lithuanian labour law.

Immigration and Right-to-Work Handling

We coordinate local work authorisation for non-EU nationals, including employment-based residence permits, quotas, and documentation. Where Lithuanian or EU citizens are hired, we ensure onboarding aligns with national registration and contribution requirements.

Risk and Legal Compliance

Acumen assumes legal responsibility for the employment relationship under Lithuanian law. This includes handling disputes, regulatory filings, and labour inspections. Our structure is designed to prevent misclassification risk and insulate clients from penalties related to employment, taxation, or immigration breaches.

When to Use

• Hiring Lithuanian talent before legal incorporation
• Employing regional staff who need a legal presence in the EU
• Managing short-term sales, project, or transitional roles in Lithuania
• Avoiding permanent establishment exposure during early-stage operations.