May 22, 2025
Lithuania has published their draft on the transposition of EU 2023/970. Get the key points here.
Category:
Pay Transparency
There’s a lot of momentum at the moment on transposition drafts across Europe. We’ve been blessed with another draft, this time from Lithuania. That’s two drafts within a week!
This article will go through the changes suggested for implementation of the directive, and highlight the key points that must be taken note of. I want to give big credit to Eligijus Kajieta for giving us insights into the transposition process in Lithuania, and giving us his notes on the draft text.
Lithuania is one of the few European countries that already required disclosure of the basic starting salary or range in the job ad. With the draft, this gets extended to require employers to provide the applicant with the collective agreement before discussing or signing the employment contract. In addition, it also prohibits employers from asking candidates about their existing pay or pay history.
This aligns with the requirements of the EU directive, and keeps the existing disclosure measures intact, in terms of requiring ranges in job ads.
Lithuania already requires employers to submit pay data to the social security institution, from which the total average pay gap is published monthly. The draft extends this, but does it in a peculiar way relative to other nations. It states that workers’ representatives can request the pay gap information on the category of workers once per year. In case there are significant gaps (+/- 5%), then the employer will have six (6) months to justify and correct unjustified gaps.
The process for triggering a joint pay assessment is not dealt with in this draft, but will be included in a later amendment.
One of the core requirements under EU 2023/970 will be for employers to establish pay structures. This has historically already been legislated in Lithuania for employers with 20+ employees, wherein the structure must be done in collaboration with workers’ representatives.
What’s new with the draft is that it will require employers of all sizes to establish pay structures, and provides definition of the factors that must be used for establishing the pay structures.
These factors are 1) Responsibility, 2) Skills (hard and soft), 3) Effort, and 4) Working conditions. In addition to this, employers with 50+ employees must include the procedure for increasing the pay as a part of the pay system.
What’s interesting about Lithuania’s section on Pay Structure is their definition of “equal work” and “same work”, which is being defined slightly differently.
Equal work is defined as:
“a job that, based on objective criteria, is not less qualified and not less important to the employer’s pursuit of operational objectives than another comparative job.”
Whereas “Same work” is defined as:
“The performance of a work activity which, based on objective criteria, is the same as, or similar to, another work activity to the extent that both employees can be interchanged without significant cost for the employer.”
When discussing Same Work this probes companies to consider the intersection of grade and job family, whereas Equal Work takes a more holistic approach and in my opinion must consider roles across function areas - which has also been said from the EU Parliament’s perspective is the intent of the directive.
Employees of all organizations can request a pay report, in which they in writing must receive a breakdown of their individual pay, together with the average pay levels for their category of workers - split by gender. It is required for employers to inform the employees annually of this right, and how this right can be exercised.
In addition to this, employers cannot prevent employees from disclosing their salary in order to enforce the principle of equal pay. However, the information obtained under the employee’s right to information, other than their own pay level, is not to be used for other purposes than enforcing equal pay.
This is in line with the EU Directive on Pay Transparency. However, we are still lacking information on the deadline for providing the employee with the information once it has been requested.
Similar to the draft of Finland, the Lithuanian draft of pay transparency requires that pay gap data is disclosed for the category of workers of two employees or more. In extension of this, it states that in cases where this is at risk of disclosing personal data, the reporting requirements (both for the overall company and on employee level) must be upheld through workers representatives or external institutions.
The draft does not introduce new measures to assist small employers. It states that guides are already provided for job evaluation and pay system creation, but also recognizes that these are not broadly adopted by employers.
The draft reiterates the penalty structure for negligence of the legislation, and removes the prior cap on compensation which was six months of pay-related violations. Instead it introduces a minimum fine of €400 with a maximum penalty of €6,000 for failure to disclose/report pay information or for non-compliance with the pay system.
In my humble opinion, this does not significantly defer companies, as required by the EU directive. However, it is important to remember that this is purely related to negligence fines, and does not replace the potential for reimbursements for employer discrimination cases where an employee can claim backpay.
This is a great start for the implementation process of the EU Pay Transparency Directive in Lithuania, and it will be interesting to see if any adjustments will be made until the final implementation.
The draft aligns well with the EU requirements, although we are lacking some more information on the content of the reporting requirements. Currently, the quartile distribution and variable pay distribution has not been included. In addition to this, I would say the fines are not sufficient in being deterring businesses from non-compliance - so hopefully employers weigh the potential for negative publicity and employee claims higher.
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