Lithuania is a Baltic country in northern Europe, bordered by Latvia, Belarus, Poland, and Russia. It is considered a developed country with a high income advanced economy. Lithuania ranks well in terms of civil liberties, press freedom, internet freedom, democratic governance, and peacefulness.
The minimum wage is EUR 840 per month or EUR 5.14 per hour, with a standard workweek of 40 hours at 8 hours per day. Overtime is regulated by contracts and collective agreements. Employees can work a maximum of 12 overtime hours over 7 days if they consent in writing. Overtime is paid at between 150%-200% of the regular rate.
Pregnant employees are entitled to 126 days of paid maternity leave, which is paid for by social security at about 77% of the regular pay (no less than EUR 240 per month).
Fathers/partners can receive 30 days of paid paternity leave within the first 3 months after the birth, and this can be taken in 2 parts. This is also paid by social security at about 77% of the regular pay. Employees can also take up to 1 year of parental leave paid between 40%-100% of the regular salary (depending on the age of the child).
Employees are entitled to sick leave paid at their regular salary by the employer for the first 2 days, then 62% after that paid for by social security.
There are 16 public holidays in Lithuania, and employees can also take 20 days of paid time off each year. After 10 years at the same company, employees can receive 3 additional days.
Employers can terminate a fix term contract for the following reasons – business, personal or worker’s’ misconduct. It requires notice and a written explanation for the termination. If the reason is misconduct, a warning must be given and the employee gets a chance to explain their actions.
The standard notice period is 30 days for employees who have completed at least 1 year at their company, and 2 weeks for employees with less than 1 year.
Severance payments depend on how long an employee has worked at their company and range from 1 month to 6 months of wages.
While a 13th-month salary is not required by law in Lithuania, most employers choose to pay a performance-based bonus.
★ 1.77% - Social Insurance
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Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.