The remuneration of employees who work in companies, institutions and organizations under employment contracts is regulated in accordance with the Labor Code of the Republic of Lithuania. Labour Code of the Republic of Lithuania defines main principles of organization of remuneration for work, payment for overtime and night work, payment for work during rest days and holidays, payment for idle time as well as other remuneration guarantees and also outlines the determination of the minimum wage.
New Labour code established that employers are required to approve a remuneration system unless this is already established in the collective agreement. In workplaces with an average number of employees of twenty or more, the remuneration systems must be approved by the employer. Said must be available for all employees to become acquainted with.
Before approving or revising the remuneration system, information and consultation procedures must be carried out.
The remuneration system specifies the employee categories based on position and qualification as well as the salary range (minimum and maximum) and forms of payment for each of them, the grounds and procedures for allocating additional payment (bonuses and allowances), and the procedure for wage indexation.
Employers are obliged to prepare the remuneration system in such a way so as to avoid any kind of gender-based discrimination: equal pay for the same or equal work. A definition is provided for what is considered the same or equal work.
The new Labour Code, which came into force on July 1, 2017, establishes the newness that the minimum monthly wage can only be paid for unskilled labour. For the first time, a definition is provided for unskilled labour. This is work that does not require any special qualification skills or professional expertise.
Since 1 January 2020 the former Government of the Republic of Lithuania, taking into account recommendation of the Tripartite Council of the Republic of Lithuania, on 3 July 2019 approved the minimum monthly wage amounting to 607 EUR (hereinafter referred to as the “MMW”) (increased by 9.4 percent as compared with the previous MMW) and the minimum hourly rate amounting to 3.72 EUR. The decision was made after evaluation of the economic situation in the country, the financial possibilities of the State budget and municipal budgets and employers, in particular, small employers, to pay higher minimum monthly wage.