Amendments to the Lithuanian Labour Code are currently under consideration by the Parliament of the Republic of Lithuania. The proposed changes will transpose into national law the EU Salary Transparency Directive (Directive (EU) 2023/970 of the European Parliament and of the Council on pay transparency).

Most of the amendments are expected to enter into force on 30 April 2026, while certain provisions will start to apply from 1 May 2026.

These changes will significantly affect pay-setting and pay disclosure practices and will require additional administrative measures from employers.

KEY PROPOSED CHANGES:

Mandatory Pay System

All employers will be required to establish a clear pay system based on objective and gender-neutral criteria.

Between 1 May 2026 and 7 June 2026, employers will be required to:

• approve a pay system, if one is not already in place; or
• review and, where necessary, update their existing pay system.

Monthly Reporting Obligations to Sodra

Employers will be required to submit monthly data via the Electronic Insurer Service System to the State Social Insurance Fund Board (commonly referred to as Sodra, Lithuania’s social security authority).

The submitted data will include:

• employee remuneration,
• working time, and
• assigned job categories under the employer’s pay system.

Employers are expected to submit the additional data for the first time by 15 July 2026. The exact scope of the reporting obligations and technical submission requirements will be defined in a separate implementing legal act.

Based on the submitted data, Sodra will calculate the employer’s gender pay gap indicators and make this information available to the employer through its electronic system.

Disclosure of Pay Information to Employees

Within one month of receiving gender pay gap information from Sodra, employers will be required to:

• provide employee representatives with full information on the identified pay gap;
• provide employees with information on the average remuneration within their job category, broken down by gender (where more than two employees of the respective gender are employed in that category).

Employees will also have the right, at any time, to request information regarding: their individual remuneration; and the average remuneration by gender within the same job category. Employers will be required to inform employees annually about this right.

Recommended Actions for Employers

In light of the upcoming amendments, employers operating in Lithuania should begin preparing for the new salary transparency framework well in advance.

Recommended steps include:

• assessing the existing pay system and, where necessary, updating it or developing a new one if none is in place;
• conducting a preliminary gender pay gap assessment to identify potential compliance risks;
• preparing internal systems (HR, payroll, and accounting) to ensure accurate and timely data reporting to Sodra;
• reviewing employment contract practices and confidentiality clauses to ensure compliance with salary transparency requirements;
• planning internal communication processes to ensure employees are properly informed about their rights.

Additional Labour Law Changes

A separate package of Labour Code amendments is also under consideration, with an expected entry into force date of 1 November 2026. These proposed changes include:

• Greater contractual flexibility – employees earning at least two times the national average wage may agree with the employer on certain contractual terms deviating from mandatory Labour Code provisions (excluding rules on working time, rest periods, occupational safety, non-discrimination, etc.). For example, the parties may agree on alternative termination arrangements (e.g., shorter notice periods or pre-agreed severance payments);
• Extended probationary period – for employees earning at least two times the national average wage, a probationary period of up to six months may be applied, without the possibility of extension by agreement of the parties;
• Dismissal for cause procedures – clarification of procedural requirements and deadlines, including the obligation to provide a genuine opportunity for the employee to submit explanations and clearer timelines for the employer’s decision-making.

Associate

Paulius Ivoškus