Lithuania surpasses most EU countries with labor code changes: what awaits employers and employees

Lithuania has moved swiftly to implement the European Union's Pay Transparency Directive, becoming the second EU member state, after Slovakia, to fully transpose the legislation into national law. The directive, adopted in May 2023, aims to eliminate the gender pay gap and ensure equal remuneration for equal or equivalent work.

Key provisions of the directive include the right for job applicants to receive information about pay before employment, and a prohibition on employers inquiring about a candidate's previous salary history. Confidentiality agreements regarding pay are also banned. Employees gain the right to request information about average pay, enabling them to compare their remuneration with that of colleagues of the opposite gender performing similar roles at any point during their employment.

Employers with 100 or more staff will be required to report on gender pay differences within their organizations. The directive also mandates a joint pay assessment if there are indications of potential pay discrimination at the employer level. Enforcement measures have been strengthened, including sanctions such as fines, full compensation for damages including back pay, and a shift in the burden of proof to the employer in cases of non-compliance with pay transparency requirements.

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The European Commission indicates the main elements of the Directive on Pay Transparency, which are listed below: the right to receive information about pay before employment; prohibition for employers to request information about the candidate's previous salary; prohibition of agreements on pay confidentiality; employees' right to request information about average pay, so that they can compare their pay with colleagues of the opposite sex, working the same or equivalent work, at any time of employment relationship; employers with at least 100 employees are obliged to report on gender pay differences; joint pay assessment in cases where signs of possible pay discrimination are identified at the employer level; strengthened enforcement measures, including sanctions (fines), full compensation for damages, including payment of unpaid wages, and shifting the burden of proof to the employer in cases of non-compliance with pay transparency requirements.

Lithuania's Seimas (parliament) decided not to delay the entire package of legislative changes. While most requirements take effect on June 7, 2026, certain provisions have staggered implementation dates. Employers must finalize or update their pay systems by December 31, 2026, to comply with the new regulations. Monthly data submission to the State Social Insurance Fund Board ('Sodra') will begin on January 1, 2027, with employee rights to information becoming effective then as well.

However, the actual availability of data for employees to compare their pay with colleagues might be delayed until 2028, as "Sodra" data collection will only commence after January 2027. In cases where employees wish to compare their pay with colleagues in the same job group, they can seek assistance through institutions like the Labour Inspectorate, Labour Dispute Commissions, or trade unions, according to Social Protection and Labour Minister Jūratė Zailskienė.

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If an employee wants to compare themselves with employees working in the same group, they will be able to do so through institutions: the Labour Inspectorate, Labour Dispute Commissions, trade unions.