Lithuania

Before arriving in Lithuania, foreigners with national visas (D) had to take out health insurance with private insurance companies for the entire period of validity of the visa, otherwise, they would not have been issued a visa. If necessary, they should apply to the company that issued the insurance policy for payment or reimbursement for the healthcare provided to them, the amount of which should have been provided for in the terms of the health insurance contract.

All persons (both insured and not covered by compulsory health insurance) have access to public and municipal as well as private health care institutions. The difference is that non-insured persons are required to pay for all healthcare services provided both in private and public as well as municipal health care institutions.

National Health Insurance Fund (Valstybinė ligonių kasa) is a public authority executing compulsory health insurance in the Republic of Lithuania.

The foreigners who have been granted a temporary residence permit in Lithuania are entitled to PSDF-reimbursed health care services only if he/she carries out an economic activity, for example, under a business license, or has employment, for example, employed under an employment contract.

The foreigners residing in the Republic of Lithuania, provided that they legally employed in the Republic of Lithuania, and minor members of their families shall be eligible for the compulsory health insurance, confirms National Health Insurance Fund under the Ministry of Health (http://www.vlk.lt/sites/en/about-us/)

Foreigners who are not considered as permanent residents of Lithuania (those with the Schengen visa, national (D) visa, temporary residence permit or a Temporary Residence card of a family member of a Union citizen) cannot be insured with compulsory health insurance, except if they are employed, or have worked in Lithuania for 6 months and registered with the Labour Exchange after that). In 2020, the monthly contribution is 42,37 EUR.

There are public and private healthcare institutions in Lithuania. All persons (both insured and not by compulsory health insurance) have access to the public, municipal as well as private health care institutions. The difference is that non-insured persons are required to pay for all healthcare services provided both in private and public as well as municipal health care institutions.

Public healthcare institutions are public institutions belonging to the Lithuanian national healthcare system. Provision of services for the persons covered by compulsory health insurance is free except in cases when certain medical tests or procedures are not paid for by the State Patient Fund. In many public clinics, you can get medical services in Russian, in some – also in the English language. Registration with a public healthcare facility is important, given the fact that in this healthcare institution you will be entitled healthcare service provision for free. 

Private healthcare institutions work under a license issued by the Ministry of Health. These healthcare institutions provide paid services. Their prices are set according to an internal procedure.

Some private health institutions have concluded agreements with private health insurance companies concerning a direct reimbursement of fees for healthcare services. In private healthcare institutions it is more likely to get medical services in the English language.

A jobseeker is entitled to an unemployment social insurance benefit (commonly known as an unemployment benefit or nedarbo išmoka). Benefits are linked to earnings prior to becoming unemployed and to State Insured Income approved by Government. 

In order to qualify for unemployment benefit, a jobseeker is required to have been employed for at least 12 months in the last 30 months prior to registration. This benefit may only be granted if the person’s last workplace is/was in Lithuania.

There are: 

1. Financial assistance to disadvantaged residents (family allowances, social allowances, compensation for heating, cold and hot water expenses, and others).

2. Social services – assistance in various non-financial ways (care at home, hot food delivery, delivery of the necessaries, elderly/disabled care facilities etc.).

Foreigners can apply for financial assistance if they:

• hold a permanent residence permit;
• have been granted with asylum, except if they already are getting a financial aid for integration.

Sickness benefit (ligos išmoka) is awarded if the entitlement arose during the period of employment and if the insured person had the sickness and maternity social insurance record of not less than 3 months during the last 12 months or not less than 6 months during the last 24 months before the day of establishment of temporary incapacity for work.

The purpose of sickness and (temporary) incapacity for work benefits is to compensate the loss of personal income from work as a sick person cannot be available at his workplace. 

The sick pay is paid only for the working days. The sick pay cannot be smaller or bigger than the set limits. 

The maximum amount of sick benefit for one day is 71,02 euros (when 62,02 percent of the compensated wages are paid). The minimum amount of sick benefit for one day is 7,43 euros.

The main taxes applied to employees are following:

State social insurance (Sodra taxes): 19.5%;

Personal income tax: 20% 

Personal income tax

For contract employees, the personal income tax (gyventojų pajamų mokestis or GPM in Lithuanian) is deducted from the salary (this is done by the employer). It also has to be paid for other work non-related income (such as from selling property etc.) Lithuania imposes a flat rate of 20% on wages. 15% tax is applied for persons performing individual activities. Non-residents are taxed at the same rate as residents (for income obtained in Lithuania). 

Corporate income tax

In Lithuania, the Corporate Income tax rate is a tax collected from companies. Its amount is based on the net income companies obtain while exercising their business activity, normally during one business year. The main tariff for the CIT is 15%, smaller tariffs are applied to small enterprises. 

Value added tax (VAT)

VAT is a general, broadly based consumption tax assessed on the value added to goods and services. It applies more or less to all goods and services that are bought and sold for use or consumption. It is a tax paid by consumers. The standard VAT rate in Lithuania is 21 %. The reduced VAT rates are as follows: 0%, 5 % and 9%. 

Social security tax

The main goal of the state social security system is to guarantee income for the insured when they are not able to work due to sickness, maternity, age, disability or other reasons. These taxes are paid both by the employer and the employee. In sum, the social security contributions take 40% of the gross salary. The social security tax has to be paid also by self-employed persons, athletes, artists, and others. 

Mandatory health insurance 

Mandatory health insurance (Privalomasis sveikatos draudimas or PSD in Lithuanian) gives access to free health insurance services (to the majority of them). If the person is not insured with PSD s/he has to pay for medical services.

Read more: https://www.renkuosilietuva.lt/en/taxes/

The objective of the minimum wage is to protect workers against unfairly low pay. They help ensure a just and equitable share of the fruits of progress to all, and a minimum living wage to all who are employed and in need of such protection.

Lithuania has a government-mandated minimum wage.

In the year 2020 national minimum wage - 3.39 EUR per hour; 607 EUR  per month

Working hours: Days per week specified: 5.5; Hours per week specified: 40

The minimum wage is increasing and for 2021 year foreseen 642 EUR.

The amount of taxes directly depends on the form of activities a person has chosen. Lithuania imposes a flat rate of 20% on wages. Non-residents are taxed at the same rate as residents (for income obtained in Lithuania).

Every person is obliged to pay the personal income tax in the amount of 15 % if this person is employed or self-employed.

Persons receiving a salary lower than the minimum non-taxable income are practically exempt from the personal income tax.

Currently, the standard non-taxable income amount is 300 EUR.

These taxes are destined for Social Security and Medicare taxes. In Lithuania, the coordination of social insurance schemes operates at a relatively high level. Social insurance contributions are paid by both employers and employees. The basic contributions amount to 33.7 % of the total income before tax, thus covering all risks (except for accidents at work and occupational diseases), out of which 30.7 % is paid by an employer, but the remaining 3 % – by an employee.

The law in Lithuania provides for the right of workers to form and join independent unions, bargain collectively, and conduct legal strikes, but law enforcement is not effective. The Trade Union members may not be less than one-fifth of all the employees in a company.
There are three main trade unions in Lithuania: the LPSK (Lithuanian Trade Union Confederation - LPSK), the Solidarumas and the LDF (Lithuanian Labour Federation - LDF), plus some independent trade unions.

About 8% of the active population. However, as Lithuanian legislation does not provide for obligatory registration of trade union membership, the exact number of employees represented is only an estimated figure.

Their main roles on the labour market are: 

• Decision making around labour rights of workers. 
• Negations with employers 
• Collective bargaining 
• Support, legal advice and awareness

The unions provide a vast service to union members. Employees can in most cases go to the union and seek help on all issues regarding the employment market. 

They provide services or information on: 

• Rights 
• Legal or legal proceedings 
• Legal assistance 
• Administrative assistance 
• Training 
• Social action and funds

The funds and help differ between unions but members can always seek help from their services in regard to those or visit their website. Most of them however provide help in funding for education and health issues.

In collective bargaining is when representatives from the unions and the employer negotiate salary, working hours, holiday, bonuses etc. 

Different agreements are made depending on the unions involved in the agreements and this is why it is important that workers know what unions they are a part of. 

However, even members who are not in a union still fall under the collective agreements made in the workplace, and any contracts made that do not fall under that are not valid.

The Lithuanian Trade Union Confederation (LPSK) is the biggest trade union centre in Lithuania. At the moment it comprises 25 branches of trade unions. LPSK was set up on 1st May 2002 after the merger between two trade union centres: Lithuanian Trade Union Unification (LPSS) and Lithuanian Trade Union Centre (LPSC).

Lithuanian Trade Union Confederation is an independent organization from government and managing authorities, from employers and their organizations and also from public organizations and movements.

https://www.lpsk.lt/en/lpsk/

The employee representatives in Lithuania are more common in larger companies and organisations.

The rights of workplace employee representatives include: negotiating collective agreements at workplace level; making proposals both to the employer and the state; ensuring compliance with legal obligations with a right to appeal to a court where necessary; protecting the interests of employees when the business is transferred; and being informed and consulted.

Lithuanian legislation provides for employees at workplace level to be represented by a company-level trade union, by an external union, to which they have transferred their representational rights, or by a works council. Both company-level unions and works councils have almost identical functions. In practice, most workplaces in Lithuania have neither.

Read more: https://www.worker-participation.eu/National-Industrial-Relations/Countries/Lithuania

Labor Dispute Committee

Individual labour disputes are considered to be a conflict between an employer and an employee over unpaid wages, uncompensated material damage, disciplinary penalties, not provided holidays, and so on. The Labor Dispute Committee also deals with disputes concerning the dismissal of a worker, legality of removal from work, and non-pecuniary damage, which was previously settled by the courts.

Labour dispute committee is a mandatory pre-trial dispute settlement body specialized in individual labour disputes. Lithuania has 19 labour dispute committees: 6 in Vilnius, 4 in Kaunas, 3 in Klaipeda, 2 in Siauliai and Panevezys, 1 in Alytus and Telsiai. Utena, Marijampole, Taurage Counties are represented by (respectively) Panevezys, Alytus and Telsiai labour dispute committees. The committees are set up at the National Labour Inspectorate (NLI) territorial divisions.
Both employees and employers can refer to the labour dispute committees if their rights are violated.