Hiring in Lithuania? That’s excellent. There are two options: You can hire your talent as employees, or you can hire them as contractors. Because of Lithuania’s labor law structure, there are benefits and disadvantages to each approach.
If you want to successfully hire in
Lithuania
, you have two options:
Laws about hiring contractors are significantly more simple in
Lithuania
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Panther for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
Lithuania
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
Lithuania
.
Hiring employees takes months, at the minimum. When you hire with Panther’s locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Panther, then $49 per month to hire your contractors with Panther. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
Lithuania
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and generally puts you at a bigger risk for legal fees. When you hire contractors overseas, your biggest risk is misclassification—but even then, misclassification penalties are often minimal and just require you to pay off any compensation that the person would have been owed as an employee.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
Lithuania
, you can pay them with Panther in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Lithuania than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Lithuania.
PTO is calculated by the:
There are 11 public holidays. The day before the public holiday, working hours are reduced by one hour (paid, just one hour shorter is indicated in the timesheet). Public holidays are paid holidays.
The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:
Eligible employees receive 18 weeks (126 days) of paid maternity leave based on an employee’s average monthly wage during 12 consecutive calendar months prior to the beginning of maternity leave.
An additional two weeks is given for complicated childbirths and multiple births. The maternity benefit is 77.58 percent of the recipient’s compensatory earnings.
This amount is calculated on the basis of the person’s insured income received during the 12 consecutive calendar months preceding the month in which entitlement to the maternity benefit arose. The minimum maternity benefit per month cannot be less than 228 Eur.
New fathers are entitled to 4 weeks of paternity leave. The pay calculation is the same as specified in the ‘Maternity Leave’ section.
100% paid up to one year of parental leave. If the parent chooses to receive the benefit until the child reaches two, 70% is paid until child reaches one and 40% thereafter. The pay calculation is the same as specified in the ‘Maternity Leave’ section.
None.
None.
None.
For employers to properly terminate an employee, they must provide the correct notice. The length of notice is determined by the length of continuous employment.
The notice period in Lithuania is:
Standard notice is period one month.
For employees with less than 1 year of service, notice period is two weeks.
The previously mentioned notice periods are increased 3 times for:
* Employees raising a child (also adopted) under 14 years of age
* Employees raising a disabled child under age 18
* Disabled employees
* Employees who would be entitled to the retirement pension in 2 years
Notice periods are doubled for employees who will be entitled to the retirement pension in 5 years.
Severance payments are calculated per one month’s average wage when the employee has been in the company for 12 months or less and up to six months’ average when the employment is over 240 months.
Probation periods are not required but are common. They typically last 3 months.
Full Time employment is 40 hours weekly, and 8 hours daily.
Employees are paid 150% of their normal hourly salary for overtime. If overtime is from 10 PM to 6 AM they should receive 200% of their normal hourly salary.
Maximum overtime hours are as follows:
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