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Employment Law 

Conclusion of an employment contract

According to the requirements of the Labour Law, the employment contract must be in writing and it must contain essential provisions in order to be valid, such as conditions of payment, the place of work and a job description. Certain types of employment contract may require additional provisions such as the term of the contract, seasonal work, etc.

The Law currently allows for the conclusion of a fixed-term employment contract for newly created workplaces even if the work is of a permanent nature. The duration of a fixed term contract cannot exceed 5 years. 
Temporary hires, provided through employment agencies, offer an alternative to fixed term contracts. Temporary employment is rapidly growing in Lithuania as a flexible solution for part time, project or fixed term employment, and as a risk management strategy at the startup stage. Temporary employment is regulated by Law on Temporary Agency Employment, which was adopted to implement the EU Directive on temporary agency work.

Termination of an employment contract

The Labour Code of the Republic of Lithuania (Labour Code) regulates the dismissal of an employee.

The main bases of employment termination  An employment contract is terminated by
expiry  of an employment contract agreement between the parties
liquidation of an employer without a legal successor notice of an employee
death of an employee notice of an employer
  other cases provided by the law

If there is no fault of the employee, the employment contract may be terminated by the employer for good reason, e.g. due to circumstances related with the employee’s qualifications, professional competence or behavior at work. The contract may be also terminated for economic or technological reasons, due to structural changes at the work place etc. The employer dismissing an employee at the employer’s initiative without fault on the part of employee must give him a written notice at least 2 months before the termination date.

Work hours, overtime work, remuneration

The normal work hours for an employee may not exceed 40 hours per week. The daily period of work should not exceed eight working hours. A five-day workweek is standard, but it may be extended to six days. Generally overtime is prohibited. An employer may apply overtime hours only in exceptional cases, which are specified in the Labour Code of the Republic of Lithuania. In any case the employee’s overtime hours shall not exceed four hours in two consequent days and 120 hours per year for each employee. A different annual duration may be established in the collective agreement for overtime hours, however, not exceeding 180 hours per year. The pay for overtime and night work shall be at least one and a half times the hourly pay/monthly wages established for the employee.


The minimum annual paid holiday is 28 calendar days, but is increased to 35 calendar days for employees: 1) under the age of 18, 2) a single parent raising a child under the age of 14 or a disabled child under the age of 18, 3) disabled employees. Normally, all employees are entitled to their annual paid vacation leave after they have worked in the company continuously for an initial period of six months.

Work permits for non-residents

Foreign citizens (except EU citizens) who are not permanent residents of Lithuania may work temporarily in Lithuania under an employment contract, provided they have a work permit issued by the Lithuanian Labour Exchange at the Ministry of Social Security and Labour. EU citizens are released from the obligation to obtain a work permit, but those who intend to reside in Lithuania for more than three months within a half-year period must obtain a temporary residence permit. It is not possible to apply for a residence permit while staying in Lithuania on a short-term visit visa.

Regulatory authorities

Depending on business activities, the liaison with various regulatory authorities (including, but not limited the Register of Legal entities, State Labour Inspectorate, the Competition Council, State Data Protection Inspectorate, the Communications Regulatory Authority, Migration Department) of the Republic of Lithuania is involved in the different stages of the operations of the companies.