Key Amendments to the Lithuanian Labor Code: What Changes in 2026 and 2027?

On June 25, 2026, the Parliament of the Republic of Lithuania adopted vital amendments to the Labor Code, introducing significant shifts in employment relations. With most changes taking effect on November 1, 2026, it is essential for employers, HR professionals, and accounting teams to review internal procedures and adapt in advance.

One of the most impactful changes involves strict financial liabilities for delayed wage payments. Starting November 1, late payment penalties for overdue salaries and related employment benefits will increase fivefold. Furthermore, the rules for final settlement upon contract termination are becoming much stricter. Upon dismissal, any severance or payout amount up to one Average Monthly Wage (AMW) must be paid on the employee's final working day, unless both parties mutually agree to a 10-business-day window. Any amount exceeding 1 AMW can only be deferred for up to three months if a separate, explicit mutual agreement is signed.

Pre-holiday working hours will also see clearer remuneration rules. While the current mandate to shorten the working day by one hour before public holidays remains, the amendments explicitly require employers to maintain the employee's regular pay for that reduced hour. If an employee's salary depends on performance quotas, they must receive their average wage for that hour. Should the nature of the job make it impossible to shorten the shift, that specific hour must be compensated at a rate of 1.5 times the regular wage.

For companies hiring managers or highly skilled professionals, the new laws introduce valuable flexibility. Employees earning at least two times the national AMW can now be subject to a probationary period of up to six months. Furthermore, their employment contracts may deviate more flexibly from certain mandatory provisions of the Labor Code.

Additionally, state and municipal enterprises will face new corporate governance requirements. Employee representatives must now be included in company boards, making up at least one-fifth of the board members, with an absolute minimum of one representative per board.

Finally, an essential update for working parents will take effect slightly later. Starting January 1, 2027, the right to additional paid days off (commonly known as 'mamadieniai' and 'tėvadieniai') will be extended to parents raising children up to 14 years of age, increasing the current threshold of 12 years.

Practical steps for your business: HR and accounting departments should urgently audit internal payroll procedures, employment contract templates, and time-tracking rules before November 2026. Special attention must be given to final settlement timelines and pre-holiday hour compensation to avoid severe financial penalties. Moreover, prepare your absence management systems to accommodate the expanded eligibility for parental days off in 2027.