Lithuania to Mandate Salary Transparency Under New Labor Code

The Seimas Committee on Social Affairs and Labour has officially endorsed significant amendments to the Lithuanian Labor Code, signaling a major shift in how salaries are disclosed and managed in the Baltic nation. These changes are designed to transpose the European Union’s Pay Transparency Directive (EU 2023/970) into national law, aiming to dismantle the culture of pay secrecy and address the persistent gender pay gap.

The approved legislative package introduces a series of obligations for employers that will fundamentally change the recruitment process and internal workplace dynamics. Central to the reform is the requirement for employers to establish and maintain clear, gender-neutral criteria for determining salary levels and career progression. This move is intended to ensure that employees performing the same work, or work of equal value, receive equal compensation regardless of gender.

Empowering Employees with Information Rights

Under the new regulations, the balance of power regarding salary data will shift toward the worker. Employees will gain a formal right to request and receive information about the average pay levels for categories of workers performing the same tasks, broken down by gender. This transparency is intended to give workers the evidence needed to challenge pay discrimination and negotiate more effectively.

For larger organizations, the requirements are even more stringent. Companies with a significant workforce will be mandated to publicly disclose their gender pay gap figures. If these reports reveal a pay disparity of 5% or more that cannot be justified by objective, gender-neutral factors, the employer will be required to conduct a joint pay assessment in cooperation with employee representatives. This assessment must identify the causes of the gap and outline concrete measures to rectify it.

Implementation Hurdles and Technical Delays

While the committee expressed strong support for the principles of the directive, the legislative process has highlighted several practical challenges. During the deliberations, it was noted that the necessary secondary legislation and technical frameworks are not yet fully in place. This lack of a complete regulatory infrastructure has made it difficult for both state institutions and private businesses to begin technical preparations, such as updating payroll systems and data reporting protocols.

The committee acknowledged that implementing these rules is not merely a technical exercise but will require a profound overhaul of internal corporate processes. Businesses will need to undertake comprehensive job classifications and review their entire remuneration systems to ensure they meet the new transparency standards. Consequently, the committee has proposed a phased implementation approach to allow for a smoother transition.

Adjusted Timelines for Business Readiness

Recognizing the complexity of the transition, the committee has suggested delaying the enforcement of certain provisions. While most of the new Labor Code rules are slated to take effect on June 7, 2026, provisions specifically related to the reporting of labor relationship data may be pushed back to January 1, 2027.

Furthermore, the committee has proposed that employers be given until December 31, 2026, to finalize or update their internal pay systems to align with the new legal requirements. This extension is intended to provide the State Social Insurance Fund (Sodra) and the State Labor Inspectorate, as well as the private sector, the necessary time to adapt their systems and ensure data accuracy.

The Broader European Context

Lithuania’s move is part of a wider European trend toward radical transparency in the workplace. The EU Pay Transparency Directive, which member states must implement by mid-2026, is one of the most ambitious attempts globally to close the gender pay gap. By forcing companies to reveal what they pay, the EU hopes to eliminate the hidden biases that often result in women being paid less than men for equivalent roles.

For international businesses operating in Lithuania, these changes mean that ‘Darbo kodekso pakeitimai’ (Labor Code amendments) are no longer just a local compliance issue but a strategic shift. The focus on ‘atlyginimų skaidrumas’ (salary transparency) will likely lead to increased pressure on HR departments to justify every pay decision and could lead to a more competitive, albeit more scrutinized, labor market.

Source: ELTA

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