Covid-19 crisis

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Covid-19 crisis: Employment

Lithuania: Corona Crisis & Regulatory issues

The quarantine regime shall be effective in Lithuania from 16 March 00:00 till 31 May 24:00.

UPDATED: 2020, 6 May

  • Quarantine regime is extended until 31 May, 24:00;
  • The main changes are related to travelling restrictions which will be eased as follows:


UPDATED: 2020, 8 April

On 7 April 2020, the Parliament approved amendments to the Law on Occupation regulating the requirements to receive state subsidies in case the downtime is announced for employees, as well as payouts for self-employed persons.

WAGE SUBSIDIES FOR EMPLOYERS

The amount of subsidy for the employee in the downtime is calculated as a percentage of the employee‘s salary (it cannot be higher than the salary determined prior to the announcing the emergency situation and quarantine) and at the discretion of the employer shall amount to:

                                            Wage subsidies                                                    Additional obligationf for employees 
90% of the employee’s salary during downtime Not more than EUR 607 gross (1 minimum monthly salary)

• Must maintain no less than 50% of jobs for at least 3 months after the end of payment of subsidies

• Must notify State Labour Inspectorate in case the downtime is announced (the notification form can be found here)

• Cannot require the employee to perform work functions during downtime

70% of the employee’s salary during downtime Not more than EUR 910,5 gross (1,5 minimum monthly salary)

 

If the downtime for the employee is announced for not a full working month based on Article 47 (1) (2) of the Labour Code, the subsidy’s amount should be calculated proportionally. The subsidy is paid for as long as the emergency and quarantine continue.

Course of action for receiving subsidies:

1. Employer announces downtime for an employee or group of employees;

2. Within 1 day the employer notifies State Labour Inspectorate (in case downtime has been announced before 8 April 2020, notification shall be submitted by 14 April 2020); 

3. Employer submits request for a subsidy to the Employment Services Office (when applying for the first time request can be submitted by the end of the respective month; in further cases – by 15th of the next month);

4. Employment Services Office adopts a decision with 5 business days; 5. Subsidy shall be paid out to the employer by the end of respective month of the request.

FIXED PAYOUT FOR SELF-EMPLOYED PERSONS

Adopted amendments of the Law on Occupation establish that all self-employed persons will get fixed payouts, if the following requirements are met:

  • Self-employment has been registered for a period of at least 3 months during the last year and has not been de-registered until the declaration of emergency situation/quarantine;
  • Do not work under the employment contract and do not have other relations that are equated to employment relations during the emergency situation/quarantine period;
  • Have no outstanding debts to the state budget and to Social Security Service (deferred debts are not of relevance);
  • Legal entity is not in liquidation or bankruptcy status.

Payout will also be available for persons who are excluded from paying social security taxes: pensioners, disabled persons, first time self-employed persons.

One self-employed person shall be paid single payout of EUR 257 in a month regardless of the number of self-employed activities carried out.

AMENDMENTS OF THE LABOUR CODE ENTER INTO FORCE

On 8 April 2020 amendments to the Labour Code in relation to announcement of downtime during emergency situation and quarantine enter into force. Amendments were adopted on 31 March 2020.

UPDATED: 2020, 1 April

PARLIAMENT OF LITHUANIA REDUCES THE LIST OF SUBSIDIES RECIPIENTS AND POSTPONES DECISION ON WAGE SUBSIDIES

On 31 March 2020, amendments to the Labour Code related to downtime were adopted by the Parliament. However, decisions on wage subsidies were postponed until another Parliament’s session (7 April, Tuesday).

DOWNTIME DUE TO QUARANTINE

Key requirements for announcement of downtime due to emergency situation and quarantine (Article 47 (1)(2) of the Labour Code):

  • There is no work due to emergency situation and quarantine (e.g. non-food store is closed);
  • The employee is not able to work remotely;
  • Does not agree to perform another work (if employer suggested another work);
  • Employer must pay not less than EUR 607 (for full-time employees) irrespectively of the salary indicated in the contract;
  • Notification to the State Labor Inspectorate must be submitted within 1 business day.

For further information press here (law in Lithuanian only).

OTHER OPTIONS FOR DOWNTIME

If the above-mentioned requirements are not met (i.e. there is no work due to the decrease in the market), the employer is able to announce the downtime based on the Article 47 (1) (1) of the Labour Code and pay as follows:

  • for the 1st day of downtime: 100% of average salary;
  • for the 2nd - 3rd day of downtime: 2/3 of average salary;
  • for the 4th day and all subsequent days: 40% of average salary.

Employee's salary during the downtime cannot be lower than the minimum monthly salary in Lithuania 607 EUR gross (for full-time employees).

UPDATED: 2020, 30 March

Draft amendments to the Labor Code and the Law on Occupation are proposed by the Government

On 25 March 2020, the Government proposed draft amendments to the Labour Code and the Law on Occupation. Please find the relevant summary below.

DOWNTIME

The proposal amends the Article 47 (1) (2) of the Labour Code stating that the employer shall announce downtime due to emergency situation/quarantine, if both requirements are met:

  • The employer is not able to provide work to the employee as agreed in the employment contract; and
  • The employee is not able to work remotely due to the peculiarities of work organization or does not agree to perform another work proposed by the employer.

Thus, if the employee can work remotely or accepts the proposal to perform another work, the downtime shall not be announced based on this ground.

DUTY TO NOTIFY THE STATE LABOUR INSPECTORATE

In case the downtime is announced, the employer is imposed to notify the State Labor Inspectorate no later than in 1 business day.

WAGE SUBSIDIES

he draft Law on Occupation states that all employers regardless of the economic sector are entitled to the state compensation for the employee’s salary, if the following requirements are met:

(i) downtime is announced due to emergency situation/quarantine in the country (Article 47 (1)(2) of the Labour Code);

(ii) the employer did not dismiss employee(s) under Articles 57 and 59 of the Labour Code (without the fault of the employee and (or) on the initiative of the employer);

(iii) the employer did not grant an unpaid leave for at least 1 day.

Subsidies amount shall be calculated as a percentage of the employee‘s salary, which shall not be:

(i) Higher than the salary determined prior to the announcing emergency situation/ quarantine; and

(ii) Lower than the minimum monthly salary in Lithuania (EUR 607 gross).

Wage subsidies at the discretion of the employer shall amount to:

(iii) 70 percent of the employee’s salary, but no more than 1,5 of the minimum salary (EUR 910,5 gross). The employer is obliged to preserve the employee at the workplace for at least 6 months from the end of the payment of wage subsidies;

(iv) 90 percent of employee’s salary, but not more than EUR 607 gross. The employer is obliged to preserve the employee at the workplace for at least 3 months from the end of the payment of wage subsidies.

Please note that employment agreements can be terminated based on Articles 55, 56, 58 and 60 of the Labour Code.

FIXED PAYOUT FOR SELF-EMPLOYED PERSONS

According to draft amendments, all self-employed persons will get fixed payout of EUR 257 per month, if the following requirements are met:

i. self-employment has been registered for a period of at least 3 months during the last year and has not been de-registered until the declaration of emergency situation/quarantine;

ii. do not work under the employment contract and do not have other relations that are equated to work relations during the emergency situation/quarantine period;

iii. have no outstanding debts to the state budget and to Social Security Service (deferred debts are not of relevance)

iv. Company is not in liquidation or bankruptcy status.

Payout will also be available for persons who are excluded from paying social security taxes: pensioners, disabled persons, persons who are first time self-employed.

The proposal states that one self-employed person shall be paid single payout of EUR 257 in a month regardless of the number of self-employed activities carried out.

Self-employed persons will be able to apply to Labor Exchange Office for payout as of 5 April 2020.

UPDATED: 26 March 2020

The most relevant amendments in the legal acts, which were approved by the Parliament of the Republic of Lithuania in the field of employment law

The amendments aim to provide flexibility to the employment relations in the current circumstances (i.e. emergency situation/quarantine regime is announced), as well as to ensure the required help to the employers which are forced to announce the downtime in the workplace.

DOWNTIME

*An option to the employers to announce a downtime/inactivity period in a workplace in case the Government of the Republic of Lithuania announces the emergency situation/quarantine as a result of which there is no work, was established.

In case the downtime is announced due to emergency/quarantine in the country, the following rules apply:

(i)        the employee may not be required to be at his/her workplace;

(ii)       during the downtime, the employer has to pay to the employee the salary which cannot be lower than the minimum monthly salary in Lithuania (for full-time employees). A part of expenses incurred by the employer due to downtime payouts shall be compensated (except for state and municipal institutions, trade unions, religious communities or associations) in accordance with the laws (please see Section “Wage Subsidies” for more information);

(iii)      a partial downtime might be announced to the employee, i.e. number of working days per week or hours per working day might be reduced to the employee. In such a case, for working time an employee should be paid his/her salary, and for the time of downtime - as indicated above, proportionally. 

The amendments of the law (in Lithuanian) might be found here.

WAGE SUBSIDIES

*The wage subsidies will be open to business announcing a downtime due to emergency situation/quarantine in the country.

The following rules will apply in case a downtime is announced in the workplace due to emergency situation/quarantine:

Sectors         Payouts made by the Employer     Payouts made by the state             
Period    
Sectors upon which restrictions
are set by the Government               
10% of employee’s
salary
90% of employee’s
salary but no more than the minimum monthly salary in Lithuania (EUR 607
gross)
During the period of emergency situation/quarantine in the country, but no longer than for 3 months. However, the employer is obliged to preserve the employee at the workplace for at least 3 months from the end of the payment of wage subsidies.
Other sectors 40% of employee’s
salary
60% of employee’s
salary but no more than the minimum monthly salary in Lithuania (EUR 607
gross)

 

Preliminary, it is considered that employers will be able to apply for subsidies as from 5 April 2020. However, the procedure for provision of subsidies will be clarified.

More information (in Lithuanian) can be found here and here. 

SUSPENSION OF AN EMPLOYEE ON THE INITIATIVE OF AN EMPLOYER

*Employer’s obligation to require an employee to work from home, if there is a threat to health of other employees, was established.

If the employee rejects the request to work from home, the employer shall be entitled to remove the employee from the office without payment of salary. These rules apply only when the nature of work enables the employee to work remotely. 

The amendments of the law (in Lithuanian) might be found here. 

FIXED PAYOUT FOR SELF-EMPLOYED PERSONS

All self-employed persons, who do not work under the employment contract and do not have other relations that are equated to work relations, will get fixed payout in the amount of EUR 257 per month.

Those willing to receive the payout will have to apply to Employment Services from April 5, 2020.

Payout will be available to everyone who is self-employed and:

- In fact performed activity before applying;

- Has paid social security taxes for at least three months in the last year and has no debts to Social Security Service.

- Is not employed under the employment contract and has no other relations that are equated to work relations.

Fixed payout will also be available for those self-employed persons, who pay their social security taxes once a year if they have no social security and health security debts.

Payout will also be available for persons who are excluded from paying social security taxes: pensioners, disabled persons, persons who are first time self-employed.

March 16th

According to the quarantine regime:

-        Employees are encouraged to work remotely;

-        Citizens of Lithuania are prohibited from leaving Lithuania unless they return to their place of residence, place of work;

-        Foreigners are not allowed to enter the country, except for the persons entitled to reside in Lithuania, also drivers and crew members in commercial and/or international carriage, diplomats;

-        Operation of non-food stores/supermarkets is prohibited, except for food, pharmacy, optical goods stores, delivery of goods to the public bought online;

-        All education institutions (pre-schools, schools, universities) are closed and they shall provide education remotely, if possible;

-        Restrictions on the movement of goods do not apply;

-        Restrictions on the movement of people in the territory of Lithuania do not apply.

The detailed list of restrictions introduced by the Lithuanian Government is available here.

Please find below the information on measures from the employment law perspective, which could help to reduce adverse consequences for the businesses in Lithuania.

REMOTE WORK

If the nature of work allows an employee to work on a remote basis, we recommend announcing the policy of remote work, including the following clauses:

1)     Request to inform local HR immediately, if an employee
is not able to work at home (due to sickness, child care, etc.);

2)     Request to inform local HR immediately, if the employee does not agree to work from home;

3)     Working hours (schedules), during which the employee should be available by e-mail/phone;

4)     Personal equipment, if required for the work, limits for reimbursement of
costs incurred by the employee;

5)     Rules on overtime work, if relevant (for instance, approval for overtime is
required);

6)     A preliminary period of the remote work;

7)     Other specific clauses depending on a position, business, industry.

Please find below the options that should be taken into consideration, if there is no possibility for the employee to work remotely (the employee does not agree to work remotely, does not have such possibilities or there is no work due to objective reasons).

OTHER RECOMMENDATIONS

If work on a remote basis cannot be
organized, we recommend considering a set of appropriate measures laid
down below to reduce adverse consequences for the business and employees:

1)   an employee should go on sick leave when the set conditions are met (sickness, young children, self-quarantine);

2)   annual vacation (agreement with the employee is required);

3)   remodelling full-time agreements into part-time agreements for a certain period of time (agreement with the employee is required);

4)   to announce downtime and pay respective proportions of salary;

5)   consider termination of employment contracts with
respect to the requirements and restrictions of Lithuanian laws. 

 

SELF-QUARANTINE

Employees in quarantine are entitled to receive sickness benefit for up to 14 calendar days amounting to 62.06 percent of gross salary. In such a case, an employer has to pay for the first 2 working days as per work schedule.

 

EMPLOYEES WITH CHILDREN

In case an employee has to take care of a child going to a kindergarten, pre-school or primary school, the employee is entitled to the sickness benefit for up to 14 calendar days amounting to 65.94 percent of gross salary (sickness benefit is paid from the state budget from day one).  After 14 calendar days, sick leave may be extended.  

 

DRAFT LAWS

State compensations

A draft law on compensation for "partial work" is currently under consideration. According to the draft law (the law has not been adopted yet), it is foreseen to enable employers to set a "partial work" regime in case of an emergency situation in the country and when an employee is not able to work at home. This
regime means that employee still works at the workplace (part-time) and receives a salary from the employer respectively. 

According to the draft law, the employer is able to set a partial work regime by decreasing working time of employees up to 50 % and requesting the State Social Security Fund Board to pay compensation to the employees. In the official request, the employer should indicate the start date of "partial work" regime,
which should not be sooner than 30 calendar days as of the request submission. 

In case of emergency in the country, compensation from the state would be paid for 14 calendar days.  

Suspension of an employee on the initiative of an employer

The draft law indicates that an employer may require an employee to work from home, if there is a threat to the health of other employees. If the employee rejects the request to work from home, the employer shall be entitled to remove the employee from the office without payment of salary. These rules would be applicable only when the nature of work enables the employee to work remotely.  

According to the current regulation, if the employer instructs the employee
to work from home due to suspicion of COVID-19, but the employee refuses working from home, the rules on downtime shall be applied.

 

 

The Professional Partnership of Advocates “Deloitte Legal”, its employees or representatives are not responsible for the information and consultations provided here: www.deloittelegal.lt, i.e. advice should not be considered as professional legal consultation or service. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional legal advisor individually.

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