Lithuania PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Lithuania to companies willing to enter the Lithuanian market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Lithuania.  However our solution allows you to start the operations in Lithuania within days hence save time and money.  WeHG would recruit applicants on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. .

Lithuania fast facts

Population, million: 2,722,289
Land area: 65,300 km²
Capital: Vilnius
Local currency: Euro (EUR)

GDP per capita:$ 16,489.7
GDP in currency:$ 48,35 billion

Relations between hirers and workers are governed by the Labour Code of Republic of Lithuania and the other legal acts that contain regulations relating to employment and labour.

The Lithuanian Labour Code determines the minimum rights of an worker with respect to the core terms and conditions and material aspects of his/her employment, e.g.: working time, payment for overtime, holiday leave entitlement and other types of leave of absence, parental leaves and benefits, termination of a contract and, in particular, special protection against dismissal, etc.

Importantly, the Lithuanian Labour Code provides that no employment contract may stipulate conditions that are worse than the minimum provisions provided for under Lithuanian labour legislation.

Hiring, Negotiating and Doing Business in Lithuania

Necessity of written employment contract

An employment contract is enclosed in writing and should be signed before the employee starts working.

An employment contract must be concluded in Lithuanian if:

an employee has place of his/her residence in Lithuania, and
the employment contract is or will be executed in Lithuania.

Parties can draft additional language versions of an employment contract. But, the Lithuanian version is always binding and prevails if a worker has Lithuanian nationality.

Lithuania Employment Contract

Types of employment agreements

Types of Employment Contracts:

– indefinite–term;
– fixed–term, temporary, seasonal;
– on secondary job;
– teleworking;
– etc.

Lithuania working hours

The working week is 40 hours.

Overtime

Possible up to 60 hours per week, not more than 120 hours of overtime per year.

Vacation leave in Lithuania

Worker is authorized to 28 days paid holiday for a full year of work.

Therefore holiday payment is included in each month’s invoice (pro–rated), holiday pay will only be paid when:

1) Employee takes holiday

2) He quits job/is laid off – then all unused holiday pay must be paid to employee

Lithuania Maternity Leave

State pays for the maternity leave 100%. It is 1 year, or 2 years.

Sick leave

Sick leave only first two days are paid by employer of 80% of his salary. The rest is paid by the state.

Lithuanian Severance Laws

An employment contract can be terminated:

by agreement of the parties,
one of the parties sending a notification (hirer or worker) indicating the period of notification.

The duration of the notice period depends on the type of contract and the position held by the employee, and varies from 3 days to 4 months.
Contracts of workers with special protection against termination (i.e. handicapped persons, pregnant women) are subject to special regulations.

Lithuania Tax

Income is taxed at a flat rate of 15%.

All persons working under labor contracts in Lithuania, to be covered by the social security scheme.

The current social security rate applicable to employment related income (i.e. income received based on a regular employment contract) is 39.98% – 41.6% and is divided as follows:

– Employers – 30.98% – 32.6% (depending on the number of accidents at works occurred in an entity);

– Employees – 3% + 6% of mandatory health tax.

Health Insurance Benefits in Lithuania

All permanent residents of Lithuania must have health insurance, and employees must register with their company’s health insurance fund.

Additional Benefits in Lithuania

The law does not regulate bonuses and fringe benefits.

Lithuania Holidays

Lithuania celebrates 13 national holidays:

• New Year’s Day
• Day of Re-establishment of the State of Lithuania
• Day of Restitution of Independence of Lithuania
• Easter
• Easter Monday
• Labor Day
• St. John the Baptist’s Day
• State Holiday Lithuania
• Assumption Day
• All Saint’s Day
• Christmas Eve
• Christmas
• St. Stephen’s Day

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.