Understanding Minimum Wages and Payroll Frequency in Lithuania

In Lithuania, the minimum hourly and monthly wage rates are approved by the government following recommendations from the Tripartite Council of the Republic of Lithuania. This council consists of trade unions, employers' organizations, and government representatives. It evaluates economic indicators and trends to recommend appropriate minimum wage rates. The Tripartite Council presents its recommendations to the government by June 15 each year, or on a date specified by the government.

As of January 1, 2024, the minimum monthly wage in Lithuania is set at 924 euros, with an hourly rate of 5.65 euros. It is important to note that these rates are specifically for unskilled labour, defined as work requiring no special qualifications, skills, or professional expertise. While no employee can be paid less than the government-approved minimum wage, collective agreements may set higher minimum hourly and monthly salaries.

Payroll Frequency

Employers are required to pay monthly salaries at least twice a month. However, employees have the option to request monthly payments instead. Salaries must be paid within 10 working days after the end of the month. If an employer fails to meet this deadline, they are liable for late fees, as determined by the Minister of Social Security and Labour.

Upon termination of employment, employers must settle all employment-related payments immediately, unless the employee agrees to a payment within 10 working days of termination. If payments are delayed beyond this period, the employer must pay a forfeit equivalent to the employee’s average monthly remuneration, multiplied by the number of late months, up to a maximum of six months.

Implications for Employers and Employees

Adhering to minimum wage and payroll frequency laws is essential to avoid legal penalties and maintain a positive work environment. Employers must stay updated with annual adjustments to the minimum wage and ensure timely salary payments. Employees being aware of wage policies ensures best practices.