Recruitment services are provided by the State  Labour Exchange Office free of charge, or by  private recruitment service providers. Employers  also recruit by advertisements, recruitment  agencies and personal contacts. It is also common  to recruit students in universities. Headhunting  from competitors is prohibited where the purpose is unfair commercial practice.  Pre-employment references and  background checks  Most employers carry out background checks as  part of the recruitment process. Criminal record  certificates can be granted only directly to the  employee. However, the employer is specifically  entitled to check the employee’s identity  documents, social security certificates and  qualification diplomas, as well as to send the  employee to a medical exam in certain  circumstances.   Selection of employees or workers  An employer may not discriminate in its  recruitment practices, or in the terms and  conditions it offers to a successful candidate, on the  basis of sex, sexual orientation, race, nationality,  language, ethnic origin, social status, religion,  family status, age, beliefs, membership in political  parties and public organizations, or any other  circumstances that are not related to the candidate’s  working skills.  Itemized pay slips   Employers must give their employees itemized pay  statements, on a monthly basis, specifying gross  and net salary, the amount and purpose of any  deductions and details of overtime. At the time of  writing the Lithuanian Parliament is considering  legislative amendments that may cancel this  requirement unless there is a special request by the  employee.  Health and safety  Employers are obliged to safeguard the health and  safety of their employees, visitors to their premises  and the public. The obligations are extensive.  They include mandatory medical exams for  employees working in certain industries,  environments and positions. Employees must be  individually informed about the health and safety  rules and requirements that apply at the workplace. This should be evidenced in writing and signed by  the employee before the start of their employment.  The employer must also appoint a specialist  (employee) to be responsible for health and safety, or enter into a contract with a licensed health and safety company for this purpose.  Written contract of employment  Contracts of employment must be entered into in  writing. There is a model form, approved by the  government, which employers are bound to follow.  The employer has an obligation to give the  employee an employment contract to sign before  starting employment. This should include terms  and conditions relating to employment such as  position, work place, salary, working time and  vacation. Offer letters are not common. Senior  positions may be subject to more detailed  employment contracts than those used for junior  positions.   Implied duties of the employer and the  employee  In addition to terms and conditions set out  expressly in the contract of employment the law  also implies certain additional terms into every  employment relationship. These include the  following:  • Employees have a duty to work fairly and  honestly, to follow work discipline, to  execute orders made by their employer  accurately and on time and to protect their  employer’s property; and  • Employers have a duty to organize work  appropriately, to comply with health and  safety and other laws, and to take care of  the needs of their employees.   Company rules  A number of issues must be regulated by internal  work rules. Such rules are also used to regulate the  working environment and conditions and are  common in Lithuania.  Data protection  An employer has duties in respect of processing  personal data. Personal data must be processed and  stored safely only to the extent necessary for the  management of employment relations. Employees  must be informed of the processing of their data.  Sensitive personal data may be processed only with  the employee’s consent, or where such processing  is allowed by law. STATUS  Where the individual will be supervised by the  engaging entity and be subject to internal company  rules, their engagement will be one of employment  and must therefore be regulated by a written  employment contract. Alternatively, individuals in  Lithuania can be engaged as independent contracts  under service agreements.  Employees  An employment relationship gives the employer a  greater ability, both during and after the  employment, to protect company confidential  information and intellectual property ý(if these  obligations are included in the appropriate  documents). It also prevents the former employee  setting up in competition or poaching other staff (if  a special agreement on post-employment noncompete obligations is signed and the appropriate  monetary compensation is paid by the employer).  Independent contractors or consultants  Independent contractors are sometimes used in  Lithuania. They allow the employer to avoid  cumbersome employment termination procedures  and other protections and benefits afforded to  employees. There may also be a cost benefit  because no social insurance contributions are  payable by the engaging entity in respect of an  independent contractor. However, these  arrangements may be scrutinized by the authorities  and so the contract entered into between the parties  must reflect the practical arrangements.  Agency workers  Agency workers have a special status in Lithuania.  Agency workers cannot be discriminated against in  comparison to employees engaged directly by the  end user client of the agency in terms of work  remuneration and work environment. The end user  client of the agency is responsible for the health  and safety of any agency worker it uses. The end  user client and the agency must enter into a written  agency-services contract.  PRACTICALITIES  Restrictions on overseas individuals  working in Lithuania  An employer who wants to employ an individual  who is not a citizen of the European Economic  Area to work in Lithuania has to ensure the  individual obtains a work permit and a residence  permit before he or she arrives in the country.  Those holding a permanent residence permit do not  require a work permit. A work permit can only be  obtained if there is a shortage of employees with a particular qualification in Lithuania. In other cases,  working without a work permit is considered illegal and employers could face administrative liabilities in respect of each illegal employee.  Tax and social security contributions  If an organization has employees in Lithuania, it is  responsible for deducting the applicable income tax and social security contributions from each  employee’s wages. All employers have an  obligation to register with the territorial tax  inspectors and register their employees with a State  Social Insurance Board before the start of  employment.  Taxation of individuals working in  Lithuania  There is no difference between a Lithuanian  national and an overseas employee legally working  in Lithuania with regard to his or her obligations to  pay (and to have paid by his or her employer) taxes to the Lithuanian government, with certain limited  exceptions. THE EMPLOYMENT CONTRACT  Overview of key terms and legal requirements:  Probationary Period  Probationary periods are common. The maximum length is three months.   Minimum Wage  National minimum wage is Lt6.06 (approximately €1.75) per hour and Lt1,000 (approximately €289.60) per month.  Non-pay Benefits  Fringe benefits are not a legal requirement, but may include:  • Private health insurance   • Car benefit  • Mobile phone  • Sport compensation  Hours of Work  A regular week must not exceed 40 hours per week and eight hours per day. Overtime can extend this to a maximum of 48  hours per week and 12 hours per day. There is a daily rest entitlement of 11 hours, and a weekly rest entitlement of 35 hours  (which should be provided in two consecutive days).   Holiday Entitlement  Employees are entitled to a minimum of 28 days of paid annual leave and (usually) 14 public holidays per year. Employees  under 18 years of age, single parents of children under 14 or disabled children under 18, and disabled employees are entitled to  a minimum of 35 calendar days of paid annual leave. Additional periods of leave apply to specific industries, e.g., aviation and  health care. Employees are entitled to take annual leave after six months of employment.  Default Normal Retirement Age  There is no age at which an employer can compulsorily retire an employee; it is an employee’s choice whether to retire or not.  The current retirement age for men is 62 years and eight months, and for women is 60 years and four months.  Sick Pay Entitlement  Sick pay is payable to employees who have been covered by social insurance for at least three months during the last 12  months, or at least six months during the last 24 months, save for limited exceptions. The employer must pay between 80 and  100 percent of the employee’s average salary during the first two calendar days of sickness absence. During the third to the  seventh day of absence the state pays the employee 40 percent of salary from the social insurance fund. From the eighth day of  sickness absence, the state pays the employee 80 percent of salary.  Rates of Tax Payable by Employee  Income tax is payable at the rate of 15 percent.  Rates of Social Security Payments  Employers’ social security contributions are 31 percent of gross salary. Employees’ contributions are  three percent. In  addition, employees must contribute six percent of gross salary to the mandatory health insurance scheme.  Maternity Benefits  Employees receive 70 days’ maternity leave before birth and 56 days’ leave after (if the birth is complicated, it is 70 days).  Maternity leave is paid by the state if the minimum period of social insurance coverage has been met (as a general rule, 12  months of insurance coverage during the last 24 months). The compensation is 100 percent of the previous salary, subject to a  statutory cap.  Paternity Benefits  Paternity leave runs from the day the child is born until he or she is one month old. Paternity pay is 100 percent of the salary  for the duration of leave, subject to a statutory cap. Paternity leave is compensated by the state if the minimum period of social  insurance coverage has been met (as a general rule, 12 months of insurance coverage during the last 24 months).  Parental Benefits Each parent is equally entitled to take child care leave until the child is three years old. Only one parent can take it at a time;  however, the leave can be taken in parts (in turns). The leave is compensated by the state for the first two years of a child’s life  if the minimum period of social insurance coverage has been met (as a general rule, 12 months of insurance coverage during  the last 24 months). The amount of compensation depends on if the leave is taken for only a child’s first year or for his or her  first two years. In the former case, 100 percent of salary is compensated, subject to a statutory cap. In the latter case, 70  percent of the salary is compensated for the first year and 40 percent of the salary is compensated for the second year, subject  to a statutory cap.   Flexible Working  Certain categories of employees are entitled to a part-time arrangement at their request, including pregnant women or women  who have taken a period of maternity leave, disabled employees, and single parents.  Equal Opportunities  Employees are protected against discrimination on the basis of sex, sexual orientation, race, nationality, language, ethnic  origin, social status, religion, family status, age, beliefs, membership in political parties or public organizations, or any other  circumstances not related to the individual’s working skills.  Protected Employees  Protected employees include trade union officials, trade union members, pregnant women, those on maternity, paternity or  adoption leave, working students and pupils, juvenile employees, donors, those on business trips, those on strike, those on  fixed-term contracts, those who are ill or were injured at work, disabled employees, employees with small children, and single  parents.  Minimum Notice Period  An employer can terminate an employment contract without any fault on the employee’s part only after he or she notifies the  employee in writing and confirms it with the signature of the employee. Such notification must be presented two months  before the dismissal. If the employee has less than five years until his or her retirement age, or if he or she is younger than 18,  disabled or has children who are younger than 14, the minimum notice term is four months.  Collective Agreements  Any applicable collective agreements must be referred to in the employment contract. Generally, collective agreements are not  common in Lithuania, although they do exist in both the private and the public sector.  Disciplinary Rules  Disciplinary rules are regulated in detail by the Labour Code. Amongst other things, an employer must make a written request  to an employee to give an explanation of his or her misconduct, and set a reasonable deadline for such explanation. The  disciplinary action must only be taken after considering the employee’s explanation, or the deadline has passed. The  disciplinary measure must be applied by a written order, presented to the employee and confirmed by the employee’s  signature. The action must be taken no later than one month from the time the misconduct became known to the employer and  no later than six months from the date the misconduct took place.  Grievances  The employee can appeal the employer’s actions to the Labour Disputes Commission in the State Labour Inspectorate. Some  employees’ claims (including claims of unlawful employment termination) are heard only by the courts. © 2014 Morrison & Foerster LLP │  LITHUANIA: FIRING  PRIOR TO FIRING  Disciplinary action and dismissal  Employers strictly follow the rules relating to  disciplinary actions that are set out in the Labour Code. An employee may only be dismissed for a  disciplinary reason where he or she is guilty of  repeated misconduct (which has resulted in a  warning being issued) in the past 12 months, or  where he or she is guilty of gross misconduct (a list  of conduct which would amount to gross  misconduct is set out in the Labour Code).  Before taking any disciplinary action, the employer must request in writing an explanation of the  alleged misconduct, and set a reasonable deadline  for such explanation. Only once the explanation  has been considered, or the deadline passed without any response from the employee, can the employer  decide what sanction to impose (if any). The  sanction must be applied by a written order,  presented to the employee and confirmed by the  employee’s signature. The action must be taken no  later than one month from the time the employer  became aware of the misconduct, and no later than  six months from the date the misconduct took  place.  Grievances  Individual labor disputes are examined by a Labour  Dispute Commission or the courts. Labour Dispute  Commissions are administered by the State Labour  Inspectorate and consist of a representative of the State Labour Inspectorate, a representative of the  trade unions and a representative of the employers’ organizations. An employee may bring the matter  before a Labour Dispute Commission within three  months of the date when he or she learned, or  should have learned, about the violation of his or  her rights. The employer or employee may file an  action before the court within one month if he or  she is not satisfied with the decision of the Labour  Dispute Commission.   Claims of unlawful employment termination and  some other types of claims are filed in the courts  directly. The dismissal can be disputed within  the period of one month. If the court finds the  dismissal to be unlawful, the employee may be  awarded average work remuneration for the  whole period between dismissal and the effective  decision of the court (the balance between the  previous salary and the current salary is awarded  if the employee has already found another job).  Additionally, the employee may be reinstated at  the previous job, if the court considers it  reasonable.   Consultation with employees  At least once a year, employers should inform and  consult with employee representatives about: their  present and future activities; the financial position  of the company; and the condition of employment  relationships in the company.   Employers must also consult with employee  representatives (or employees directly if the  employee representatives are absent) before any  large-scale redundancies. The aim of such  consultation is to avoid dismissals, if possible, or  reduce the impact of the dismissals on employees.  The duty to consult also arises where employers  intend to reorganize or restructure the business, or  propose certain other changes in the company, such  as changes to health and safety policies.  INDIVIDUAL TERMINATIONS  Mutual termination agreements are considered the  best way to dismiss employees as they help to  mitigate the risk of claims of unlawful termination.  The termination agreement must be initiated by a  written proposal, and must include detailed terms  and conditions agreed upon by the parties.  Where a termination agreement is not used, the  employer bears the burden of proof in the event of  a dispute.  Contractual claims  Claims based on employment contracts are more  protected than commercial claims. If the salary is  not duly paid in the course of employment, an  employee is entitled to a penalty payment of 0.07  percent for every day of delay. If the employer fails  to properly settle with the employee upon  termination of employment, the employer is bound  to pay the employee’s average salary for every day  of delay. Average salary would also be payable in  respect of the period between dismissal and the  court decision deeming that dismissal to be  unlawful.  Statutory claims  An employee can challenge the grounds of, and the  procedure relating to, termination. No eligibility  criteria apply. If the court finds the termination to  be unlawful, the employee may be reinstated and  paid the average salary for the whole period  between dismissal and the reinstatement, or the  court may terminate the contract by its decision and  award the employee the average salary for the  period before the effective decision (the balance © 2014 Morrison & Foerster LLP │  between the previous salary and current salary will be awarded, if the employee has found another  job). The employee is also entitled to compensation for non-pecuniary damage.   Dismissal of a pregnant woman is forbidden, save  for very specific exceptions. Employees with  children under three years old cannot be dismissed  without fault.   Dismissal for the following reasons will be  unlawful: membership in a trade union;  performance of employee representatives’  functions; attendance in a case against the  employer or having filed a grievance; and  discriminatory reasons. An employer cannot  dismiss an employee if he or she is on vacation,  sickness or similar leave.  Redundancy payments  In the case of a dismissal without fault, or  liquidation of the employer, the employee is  entitled to statutory severance pay, which depends  on the employee’s length of service and may vary  from one month’s average salary to six months’  average salary.  Discrimination  It is unlawful to discriminate on the grounds of sex,  sexual orientation, race, nationality, language,  ethnic origin, social status, religion,  family status, age, beliefs, membership in political  parties or public organizations, or any other  circumstances that are not related to the  individual’s working skills. A discrimination claim can be brought in court. Compensation for such  claims may be unlimited.   Termination on the grounds of age, participation in a trade union, etc., is explicitly forbidden.  However, discrimination claims are not common in  practice.   GROUP TERMINATIONS  Redundancies  A termination is considered to be a collective  termination where, within a 30-day period, 10 or  more employees are dismissed from a company  with between 20 and 99 employees; 10 percent or  more employees are dismissed from a company  with between 100 and 299 employees; or 30 or  more employees are dismissed from a company  with 300 or more employees.  Employers have to consult with the employee  representatives and send information in writing to  the territorial labor exchange office before  presenting dismissal notices in respect of collective  dismissals.  Business transfer  The dismissal of employees or detrimental changes  to employment conditions due to any kind of  business transfer is forbidden. The transferee is  under an obligation to take on all employment  contracts and other employment conditions of the  transferor. The employees affected by the transfer  have to be notified about the terms and conditions  of the transfer in writing at least 10 working days before the transfer.