When hiring in Lithuania, having a compliant and clearly written employment contract is fundamental to establishing a strong employer-employee relationship. Contracts must be in writing and must not contain any terms less favourable than those set out in the Labour Code or applicable collective agreements. Whether you are drafting a standard employment contract in Lithuania for an indefinite role or creating a fixed-term version for project-based work, it’s essential to outline the job role, salary, working hours, probation period, and termination clauses.
Employers should also be aware of the distinction between permanent and temporary roles. Indefinite-term contracts are considered the norm, while fixed-term agreements are only permitted in specific, legally justified situations. Repeated short-term contracts for the same job function cannot exceed a two-year total duration. Additionally, employers must inform fixed-term workers of any internal job openings and provide equal access to permanent positions.
When preparing a template employment contract in Lithuania, be sure to include any applicable clauses for remote work, overtime compensation, or work involving travel. Contracts must be in Lithuanian, or in a language the employee understands, and should be submitted to the employee before the start date. For international employees, employers must also comply with work permit and residence requirements.
A well-structured employment contract in Lithuania does more than satisfies legal obligations. It also helps build transparency and trust. Employers working with an Employer of Record (EoR), like CXC, can streamline contract creation, stay compliant, and focus on onboarding talent rather than navigating paperwork.
Hiring in Lithuania comes with a clear legal framework, particularly when it comes to written agreements between employers and employees. If you are considering employing staff locally, it is important to know how employment contracts and policies in Lithuania are structured and what is expected from your business.
Employment relationships in Lithuania are formalised through written contracts, which must be signed by both parties before work begins. These agreements should specify key information such as the job title, work location, duties, salary, working hours, probation terms, and termination conditions. A copy of the signed contract must be provided to the employee, and it must be registered in the employer’s internal systems.
There are two main types of employment contracts in Lithuania: fixed-term and indefinite. Fixed-term agreements are generally limited to a maximum of five years unless an exception is specified by law. Indefinite contracts are more common and require a formal notice period for termination. In both cases, termination clauses must align with the Labour Code of the Republic of Lithuania.
Employers are encouraged, though not legally required, to establish internal employment contract policy and procedures in Lithuania. This might include policies related to health and safety, whistleblower protection, or grievance mechanisms. These internal policies should reflect the company’s size and industry, but there is no requirement to submit them for external approval. Employment agreements themselves do not need to be filed with any government agency.
Probationary periods are allowed and typically range from one to six months. While there are no rigid legal limits on probation lengths, employers must treat employees fairly during this time and provide justifiable grounds if the employee is not confirmed in the role.
Procedurally, concluding a valid employment contract in Lithuania involves mutual agreement and clear documentation. The contract must be in Lithuanian, although bilingual formats are common when hiring foreign nationals. It must include the following elements:
Employees in Lithuania are protected by various statutory rights. These include the right to equal treatment regardless of gender, ethnicity, or other protected characteristics, as well as the right to join or form trade unions. Foreign nationals from outside the EU typically require a valid work permit and residence visa before beginning employment.
When implemented correctly, employment contract policy and procedures in Lithuania can provide clarity and security for both employers and workers—helping your business operate compliantly and competitively in the local market.
Employers looking to hire in Lithuania should familiarise themselves with how contract terms are structured and what is expected from a compliance standpoint. The country’s employment law framework prioritises employee protections, so it is important to ensure that contractual terms are both fair and lawful from the outset.
Employment contracts must comply with the Labour Code of Lithuania and may not include any conditions less favourable to the employee than those provided by national law, applicable regulations, or collective agreements. This means that when defining legal contract terms in Lithuania, employers must adhere to minimum standards related to working hours, wages, leave entitlements, and notice periods.
Employment contracts may be concluded for either an indefinite or fixed term. However, fixed-term contracts are only permitted for work of a genuinely temporary nature. Using fixed-term agreements for ongoing roles is not allowed unless specifically permitted by law or a relevant collective agreement. Indefinite contracts are the norm and are required where no objective justification for temporary work exists.
Contracts and accompanying documents (such as health and safety policies or employment notices) must be in Lithuanian. If the employee does not understand Lithuanian, a version in a language they understand must be provided. Before employment begins, employers must notify the territorial office of the State Social Insurance Fund Board (Sodra) at least one business day in advance.
Employers are also obliged to share specific terms with employees before their start date. This includes details on:
When drafting contract terms in Lithuania, it is best to go beyond the minimum requirements and ensure transparency from day one. This not only improves employee relations but also helps prevent disputes further down the line.
There are additional obligations related to workplace conduct. Employers, regardless of company size, must assess risks related to violence and harassment, implement preventive policies, and put in place clear reporting procedures. Staff must be trained on these issues, including their rights and responsibilities. For companies with more than 50 employees, it is mandatory to maintain a formal Violence and Harassment Prevention Policy.
If the nature of the job is mobile or requires travel, Lithuanian law permits employers to pay a wage that is up to 30% higher than the base rate to reflect this working condition. This adjustment should be clearly stated in the contract.
By embedding robust and fair contract terms in Lithuania, employers demonstrate not only legal compliance but also a commitment to a respectful and well-managed working environment.
When employing staff in Lithuania, you may need to extend contracts—whether due to project extensions, continued work eligibility, or visa renewals. Knowing how to manage a contract extension in Lithuania ensures continuity of employment without legal complications.
Fixed-term employment contracts can be extended in Lithuania, but only if the role continues to meet the legal definition of temporary or project-based work. Repeated use of fixed-term contracts for permanent roles is not permitted unless explicitly allowed under law or a relevant collective agreement.
If you are working with foreign employees, additional steps apply. For staff requiring a work permit or temporary residence permit, the employer must initiate the extension process at least one month before the existing permit expires. This includes employees who have been in Lithuania for over a year, as they will require a temporary residence permit to remain employed. These permits can be renewed for up to two years, with eligibility for permanent residency after five years of legal residence.
Applications for permit renewals are submitted electronically via the MIGRIS system—Lithuania’s official migration platform. Once the digital form is complete, the employee must attend an in-person appointment to provide biometric data and present original documents.
The Lithuanian Migration Department typically processes renewal applications within two months. Employers seeking a quicker decision may opt for an expedited service, which can reduce the waiting time to one month for an additional fee.
For employees under the visa-free regime, time spent in Lithuania and other Schengen countries must not exceed 90 days in any 180-day period. In these cases, the need for formal permit extensions may arise sooner than expected.
From a contractual standpoint, any contract extension agreement in Lithuania should be clearly documented. It is best practice to issue a written amendment to the original employment contract, detailing the new duration, any updated terms, and confirmation from both parties.
While Lithuania places no restrictions on the length of engagement for genuine independent contractors, employees working under fixed-term arrangements must have their roles and contract timelines properly aligned with legal definitions. An extension that creates the appearance of an indefinite arrangement without proper conversion can raise compliance issues.
Employers should also review internal processes to ensure timely renewals, particularly for international hires. This includes monitoring permit expiry dates, tracking residency duration, and maintaining clear communication with both the employee and the migration authorities.
Overall, managing a contract extension in Lithuania involves more than simply adjusting dates. It requires coordination between HR, legal, and immigration functions to remain compliant and transparent.
When deciding how to structure employment relationships in Lithuania, employers often weigh the benefits of permanent versus temporary arrangements. Fixed-term contracts in Lithuania offer flexibility for project-based or time-limited roles, but they come with specific legal parameters that employers must observe.
The main distinction between permanent and fixed-term contracts lies in duration and continuity. A non-fixed term employment contract in Lithuania (also referred to as an indefinite-term or permanent contract) has no set end date. It continues until either the employee or employer terminates it, following the legal procedures set out in the Labour Code. These contracts provide greater job security and are generally preferred for roles central to long-term operations.
By contrast, fixed-term contracts are used when the role is tied to a clearly defined timeframe or task. They must specify a start and end date or describe the event that will end the employment. These arrangements are most appropriate for seasonal work, temporary cover, or one-off projects. The law allows repeated renewals of fixed-term agreements but limits the total time they can be used with the same employee.
When employing staff under a fixed-term contract, employers must observe specific protections. Employees on fixed-term contracts in Lithuania are entitled to the same working conditions, pay, and benefits as their permanent counterparts.
The maximum length of successive fixed-term contracts with the same employee performing the same function is two years. This includes contracts separated by breaks of less than two months, which are considered continuous. For different functions, the cap is five years. If the employee continues working beyond the contract end date, or the assigned task is completed and work continues, the agreement may automatically convert to an indefinite-term contract.
Additionally, employers cannot have more than 20% of their workforce on fixed-term contracts for roles considered permanent in nature. This safeguard helps ensure that temporary arrangements are not used to avoid long-term obligations.
Employers are also required to notify fixed-term workers of any vacancies and offer them equal opportunities to apply for permanent roles. This supports workforce mobility and prevents discrimination based on contract type.
When considering fixed-term contracts in Lithuania, employers should:
By aligning your workforce planning with Lithuania’s employment regulations, you can make the most of fixed-term contract rights in Lithuania while maintaining compliance and fairness in your hiring strategy.
Managing time effectively is a key part of maintaining productivity and ensuring employee wellbeing. Employers hiring in Lithuania must comply with national labour standards on scheduling and compensation. This includes expectations around daily and weekly limits, overtime, and special conditions for international students. Below, we break down the regulations governing working hours in Lithuania.
The standard workweek in Lithuania is 40 hours, typically divided into five 8-hour days from Monday to Friday. These expectations apply to most full-time employees unless a different structure is provided in a collective agreement or specific employment contract.
Any work performed beyond the 40-hour weekly limit qualifies as overtime. By default, employees may work up to 8 hours of overtime in any seven-day period. However, with written consent from the employee, this limit may be extended to 12 hours per week. Overtime is not just regulated but must also be compensated appropriately.
Employers are required to pay 150% of the employee’s regular hourly wage for overtime work. If overtime takes place between 10:00 p.m. and 6:00 a.m., this increases to 200%. Overtime conditions and rates must be included in the employment agreement or be subject to collective bargaining.
Employers should maintain accurate timekeeping systems and ensure employees are not pressured into accepting overtime beyond what is legally allowed. It is also advisable to offer appropriate rest periods and break times in compliance with health and safety guidelines.
Hiring international students can be a valuable part of your staffing strategy, particularly in sectors with flexible schedules. The rules for working hours for international students in Lithuania are relatively liberal compared to many other EU countries.
EU students enrolled at Lithuanian institutions may work up to 40 hours per week without additional permits. Non-EU students can also work full-time, provided they hold a temporary residence permit linked to their studies.
There was previously a 20-hour limit for non-EU student workers, but recent amendments to migration law have lifted this cap. As long as they maintain valid study permits, international students may work full-time throughout the academic year.
Upon graduation, non-EU students can apply for a 12-month residence permit extension to seek employment in Lithuania. This policy allows employers to retain skilled international graduates and makes it easier to transition student workers into permanent roles.
Whether you are managing overtime or student schedules, ensuring compliance with Lithuania’s working hours requirements helps foster a healthy and legally sound working environment.
Flexible working arrangements have become increasingly relevant across Europe, and Lithuania is no exception. The country’s Labour Code provides a structured framework for remote work in Lithuania, giving both employers and employees clear rules for teleworking arrangements. Knowing how to handle requests and implement policies around remote work is vital for compliance and employee engagement.
According to Lithuanian law, telework is defined as work carried out regularly or occasionally away from the usual workplace, typically involving the use of information and communication technology. The arrangement can be initiated by either the employer or the employee, but in all cases, it must be mutually agreed upon and formally documented.
Employees are legally entitled to submit a remote work request in Lithuania, and employers must consider these requests fairly. Importantly, if an employee refuses an employer’s request to work remotely, this cannot be used as grounds for dismissal or altering employment terms. The right to work on-site remains protected.
There are special provisions for vulnerable or caregiving employees. If the request comes from a pregnant employee, a breastfeeding mother, a parent with a child under three, a single parent caring for a child under 14 (or under 18 if the child has a disability), or if a healthcare provider recommends remote work, the employer is obligated to approve the request for at least 20% of the employee’s working time. An exception may be made only if the employer can demonstrate that such an arrangement would result in unreasonable costs or disruption to business operations.
When managing remote work in Lithuania, employers are encouraged to develop a clear internal framework for processing and responding to employee requests. While the law outlines certain mandatory approvals, a consistent and transparent approach ensures equity across your workforce.
Here are a few practical considerations:
A proactive approach to remote work in Lithuania helps attract and retain talent, especially among workers seeking greater flexibility due to family responsibilities or health considerations. By accommodating reasonable requests and adhering to legal obligations, employers can maintain productivity while supporting employee wellbeing.
Navigating employment regulations in Lithuania can be complex, particularly when dealing with contract requirements, work permits, and local compliance standards.
Partnering with CXC as your Employer of Record (EoR) simplifies these challenges by managing all legal and administrative responsibilities on your behalf. This enables you to hire talented professionals quickly and confidently, without the need to establish a local entity.
With CXC handling contracts, payroll, tax filings, and regulatory compliance, you can focus on growing your business and supporting your team—while staying fully aligned with Lithuanian labour laws.
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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