Collective agreements may establish higher rates of minimum wage (art. 141 par. 4 of the Labour Code), but this provision has not yet been used in practice.

The Labour Code provides for a prohibition to pay minimum wage for skilled labour since 1 July 2017. This prohibition increased the number of workers paid more than the minimum wage and correspondingly reduced the number of those receiving the minimum wage and less (art. 141 par. 2 of the Labour Code). To be noted that legally speaking, the Labour Code does not provide the (absolute or relative) higher amount to be paid to skilled workers in comparison to unskilled ones. Practically, differences (or a wider gap) of wages for skilled and non-skilled labour might therefore remain an issue as even the smallest difference is legally justified.

Major changes in minimum wage regulation occurred when the new Labour Code came into effect on 1 July 2017. New rules introduced by this change are the following:

1. The provision according to which the minimum wage can only be paid for unskilled workers was introduced.

2. Abolition of the legal possibility to set lower rates (art. 187, par. 1, of the earlier Labour Code provided for such a possibility: 'The Government of the Republic of Lithuania, on a proposal from the Tripartite Council, may set different minimum hourly and monthly wage rates for different sectors of the economy, regions or groups of workers').

3. The Parliament of the Republic of Lithuania is no longer involved in minimum wage setting. Before 1 July 2017, the Parliament had the right to determine the amount of the hourly minimum wage and the monthly minimum wage for the coming financial year by the end of its spring session on the condition that the Government, on the recommendation of the Tripartite Council, did not fix the minimum wage by 1 June of the current year, or if there was no respective recommendation from the Council (art. 187 par. 1 of the Labour Code valid until 1 July 2017).

4. Additional flexibility has been added, as the Government has been entitled, from 1 July 2017, to change the deadline for submitting the Council conclusion/recommendation: 'The Tripartite Council shall submit its conclusion to the Government on an annual basis, by the 15th of June or other date as requested by the Government' (art. 141 par. 3). In the previous Labour Code, there was no possibility for the Government to set minimum wage after the 1st of June, as the right to set such a rate, as mentioned above, used to be transferred to the Parliament (art. 187 par. 1).

5. The Labour Code in force until 1 July 2017 provided for clear criteria for setting the minimum wage amount only when the power to approve the minimum wage amount was vested to the Parliament of the Republic of Lithuania. It was the Parliament that was empowered to approve the minimum wage amount, taking into account 'the average annual inflation rate of the preceding year (as measured by the national consumer price index) and the influence of other factors affecting the level and evolution of the average wages in the public and private sectors' (art. 187 par. 1 of the Labour Code).

The most recent amendments of the Labour Code were made in relation to the transposition of the EU Minimum Wage Directive and concern the specification of the criteria for setting the minimum wage level in the Code itself, in Article 141(3), which entered into force on 25 October 2024.

• Labour Code: Labour Code of the Republic of Lithuania No XII-2603 (14 09 2016)opens in new tab

• Amendments of Labour Code approved by Law No XIV-3034 (17 10 2024)opens in new tab

• Governmental Resolution No 700 on Minimum Wage Applicable in 2026 (16 10 2025)opens in new tab

The main actors involved in minimum wage setting are the following:

• The Government of the Republic of Lithuania.

• The Tripartite Council and the Government of the Republic of Lithuania, (art. 141 Labour Code), consisting of seven workers’ representatives (trade unions), seven employers’ representatives (employers’ organisations), and seven government representatives. Equality of membership is a basic principle. The Government delegates its representatives by resolution (art. 185 par. 1 of the Labour Code). Trade unions and employers' organisations, in order to be able to delegate their representatives, have to meet the nine criteria set out in the Labour Code (art. 185 par. 2). Among them: being members of international federations; having members or representatives in different regions or industries; being active for at least three years; trade unions have to organise at least 0.5% of the workforce; employers' organisations must represent companies employing at least 3% of the total employees. The Ministry of Social Security and Labour assesses the social partners’ compliance with these criteria. Currently, three trade unions and six employers’ organisations meet the criteria and are represented at the Council.

• The Bank of Lithuania, that participates with its expertise and assistance to the Tripartite Council (for instance, it requested its assistance at the meeting on 21 September 2017, when the Council agreed to use the Bank’s recommendations and calculations in the future when considering the conclusion on the minimum wage setting).

• The Ministry of Finance of the Republic of Lithuania that publishes economic development scenarios that are taken into account when the Government approves the minimum wage.

• The State Data Agency that publishes the indicators of the country's economic development that is taken into account when the Government approves the minimum wage.

• Current list of members of the Tripartite Councilopens in new tab

The Tripartite Council takes the decision on the minimum wage increase following recommendations of the Bank of Lithuania, but in practice they may deviate – as in 2023, when the Bank proposed an increase by 13.4% but the Tripartite Council endorsed the government's proposed tax reform-related formula (increase by 10% coupled by an increase of the tax-exempt amount of income, TEAI).

The Tripartite Council shall submit its opinion to the Government by 15 June each year, or by any other date requested by the Government (art. 141, par. 3, Labour Code).

Finally, the Government determines the adjustment of the minimum wage by resolution. The Government sets the minimum wage based on the recommendation of the Tripartite Council and taking into account the country's economic development indicators and trends. In theory, the final decision on the amount of minimum wage might deviate from the recommendation provided by the Tripartite Council. However, in practice this never happens, as government representatives are also members of the Tripartite Council itself, thus directly contributing to the content of recommendation presented to the Government. There were examples when the Government determined the rate of the minimum wage when the Tripartite Council did not reach an agreement.

As mentioned above, amendments of the Labour Code (Article 141(3)) were made in relation to the transposition of the EU Minimum Wage Directive and entered into force on 25 October 2024. Those amendments are mainly related to the criteria referring to in minimum wage setting, not to the process itself. However, it is important to note that with those amendments the Labour Code indirectly obliges the Tripartite Council of the Republic of Lithuania, when preparing a recommendation, starting from 2026, to discuss all criteria indicated directly in Article 141(3) of this Code while assessing and determining the minimum monthly wage adequacy.

The new Labour Code stipulates that the minimum wage shall be approved by the Government on the recommendation of the Tripartite Council and taking into account the development indicators and trends of the national economy (art. 141 par. 3 of the Labour Code). Thus, the criterion of annual inflation (in the calculation of the national consumer price index) as such no longer exists in Lithuanian law. At its meeting on 21 September 2017, the Tripartite Council agreed on the formula for setting the minimum wage. According to the formula, the monthly minimum wage shall be no less than 45% and no more than 50% of the average wage and must be in line with the average of minimum wage/average wage ratio of one fourth of the EU Member States having the highest minimum wage/average wage ratio (based on the last three years of data published by Eurostat). At the same time, the Tripartite Council requested the assistance of the Bank of Lithuania in the determination of the minimum wage calculation methodology and agreed to use the Bank’s recommendations and calculations in the future when considering the conclusion on the minimum wage setting.

Amendments of the Labour Code (Article 141(3)) that entered into force on 25 October 2024 provide that the Government, when approving the minimum wage, shall not only take into account the recommendation of the Tripartite Council and the development indicators and trends of the country's economy, but also - the economic development scenario published by the Ministry of Finance of the Republic of Lithuania and the indicators of the country's economic development as published by the State Agency of Statistics, while taking into consideration criteria such as the purchasing power in terms of the cost of living, the overall level of wages and their distribution, the speed of growth in the rate of wage growth, and the long-term levels and developments in labour productivity. It should be noted that these amendments to Article 141 of the Labour Code will apply to the negotiation and approval of the minimum hourly wage and minimum monthly wage for 2026 and beyond.

• Minutes of the sitting of the Tripartite Council of the Republic of Lithuania (21 September 2017), Question 3PDFopens in new tab

The minimum wage is established based on the updated Ministry of Finance projections for the average wage (AW): the planned and projected gross monthly average wage in the national economy, excluding allowances and bonuses. For example, when calculating minimum wage for the year 2026 in 2025, the planned and projected gross monthly average wage for 2026 was equal to €2,428.35. This figure derived from the 2024 AW (€2,223.00) minus the 6.6% portion representing allowances and bonuses (€2,076.28), and adjusted using the Ministry of Finance AW growth projections (AW growth of 8.5% in 2025 and 7.3% in 2026), resulting in a 2026 projection of €2,417.22 (€2,076.28 × 1.085 × 1.073). This is then multiplied by 50%, as the average ratio of the highest AW to minimum wage among the top quarter of EU Member States has exceeded the agreed maximum of 50% for three consecutive years, reaching 51% (€2,417.22 × 0.50 = €1,209). To achieve a minimum wage of €1,209 in 2027 or subsequent years, it was proposed by the Government to increase the minimum wage by 11.1% from 2026, bringing it to €1,153. Therefore, the ratio of minimum wage to average wage in 2026 would reach the midpoint of the target range (47.7%), and in 2027 or subsequent years the ratio in Lithuania would approach the desired level of 50. In addition, the at-risk-of-poverty threshold was also taken into account in 2025 while approving minimum wage for 2026. According to preliminary estimates, applying the maximum non-taxable income allowance in force in 2025, the net income of minimum-wage earners (after taxes) would increase by €59 next year and reach €836. This amount exceeds the preliminarily projected at-risk-of-poverty threshold for 2026, which is estimated to range between €786 and €799 per person.1

All employees working under employment contracts, whether private or public, are covered by the minimum wage. Minimum wage is the lowest allowable remuneration for unskilled work ('nekvalifikuotas darbas'). Unskilled work shall be defined as work for which no special qualification or professional ability is required (art. 141, par. 2 of the Labour Code).

The national (public sector) collective agreement fixes the basic rate of official salary applicable to public sector employees and civil servants and is agreed annually.

No other minimum wage variations are provided for in laws, regulations or other collective agreements. Also, those variations are only possible, as mentioned above, in collective agreements establishing higher minimum wage rates (art. 141, par. 4 of the Labour Code), but this provision of the Labour Code has not yet been used in practice.

Pursuant to art. 141 ('Minimum wage') of the Labour Code, the Government approves the minimum hourly wage and the minimum monthly wage. Collective agreements may set rates higher than the minimum hourly wage and the minimum monthly wage (art. 141 par. 4 of the Labour Code).

The Labour Code does not provide any specific number of hours for a monthly rate.

However, proportionally lower wages (including minimum wage) can be paid only if the employee works part-time (less than normal hours, art. 40 ('Agreement on part-time work'), par. 6 of the Labour Code), i.e.:

• less than 40 hours per week on average; or

• less than 38 hours per week, if shorter working time is applicable to an employee (art. 112, par. 4 of the Labour Code).2

Art. 146, par. 1 of the Labour Code ('Terms, place and procedure for the payment of remuneration') stipulates the following: 'Remuneration must be paid to an employee at least twice per month or – at the employee’s request – once per month'. Therefore, employees receive 24 or 12 minimum wages per year.

Art. 34, par. 3 of the Labour Code ('Indispensable employment contract terms') provides that 'In the employment contract, the parties shall establish the remuneration per month (monthly wage) or working hour (hourly rate), which cannot be lower than the minimum monthly wage or the minimum hourly rate approved by the government. The parties to the employment contract may also agree upon extra pay, allowances, bonuses or other additional payments according to various remuneration systems'. Therefore, the Labour Code creates indirect preconditions in different remuneration systems established in collective agreements or other local documents, applicable in certain enterprises, to establish the 13th or the 14th wage (including minimum wage) payments. However, it is not a common practice in Lithuania and the law (the Labour Code) itself does not require additional monthly payments.

Art. 34, par. 3 of the Labour Code ('Indispensable employment contract terms') provides that 'In the employment contract, the parties shall establish the remuneration per month (monthly wage) or working hour (hourly rate), which cannot be lower than the minimum monthly wage or the minimum hourly rate approved by the government. The parties to the employment contract may also agree upon extra pay, allowances, bonuses, or other additional payments according to various remuneration systems'. Therefore, the minimum wage is considered only as a 'basic' rate and, by law, does not include bonuses or overtime allowances.

During annual leave the worker is entitled to their average salary (art. 130 par. 1 of the Labour Code) only; not additional holiday allowances are provided.

Ar. 139, par. 2 of the Labour Code ('Concept of remuneration') provides that an employee’s salary includes: (1) basic (tariff) pay (hourly rate or monthly salary, or fixed component of salary); (2) an additional part of the salary, as agreed between the parties or paid in accordance with labour law or the remuneration system applicable in the workplace; 3) the bonus for qualifications acquired; (4) bonuses for additional work or the performance of additional duties or tasks; (5) bonuses for work performed, fixed by agreement between the parties or paid in accordance with the provisions of labour law or the system of remuneration applicable in the workplace; (6) bonuses granted at the initiative of the employer to encourage an employee to perform well, or to reward the performance of the employee or of the undertaking, department or group of employees.

Therefore, components 2-6 cannot be included in the minimum wage, and must be paid additionally to it.

Art. 143, par. 3 of the Labour Code ('The job standard') provides that when an employee (to whom piece-rates apply) fails to meet the norms of work with no fault of his/her own, he/she is paid for the work actually done. In this case, the monthly wage shall not be less than 2/3 of his/her average wage and shall not be less than the minimum wage. If there is an employee’s fault for not meeting the working standards, he or she is paid for the work actually done (art. 143, par. 4).

Art. 143, par. 1 of the Labour Code provides that 'If the scope of a job function (job standard) is established for an employee […], the employer must provide the working conditions necessary for the employee […] to fulfil the job standard'. A reasoned request by an employee for an incorrectly established work rate/norm is dealt with by the labour disputes bodies. The employer must prove that the rate of pay was set in accordance with occupational risks, the time involved and the circumstances of the job function.

Art. 736, par. 1 of the Code of Civil Procedure of the Republic of Lithuania ('Size of deductions from the debtor’s earnings or other income') provides that deduction of a part of debtor’s earnings and other equivalent payments and allowances within the limits of a minimum wage fixed by the Government shall be made in accordance with the enforceable instrument the amounts subject to enforcement are fully recovered, deductions shall be made from the portion of the debtor’s wages and equivalent payments or benefits as follows:

1. From the portion not exceeding the minimum monthly wage (MMW), 10% shall be deducted under one or more enforcement documents; however, where enforcement concerns maintenance payable in periodic payments, compensation for damage caused by injury, other impairment of health, or deprivation of life of a breadwinner, 30% shall be deducted, unless otherwise specified in the enforcement document itself or provided by law or by a court;

2. From the portion exceeding the MMW but not exceeding twice the MMW, 30% shall be deducted under one or more enforcement documents; however, where enforcement concerns maintenance payable in periodic payments, compensation for damage caused by injury, other impairment of health, or deprivation of life of a breadwinner, 50% shall be deducted, unless otherwise provided by law or by a court;

3. From the portion exceeding twice the MMW, 50% shall be deducted under one or more enforcement documents, unless otherwise provided by law or by a court.

There are no regular reports on minimum wage setting.

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