Lithuania Pay Transparency Draft Law

Overview

The Draft Law Amending the Labor Code and the Law on Equal Opportunities for Women and Men of the Republic of Lithuania (Document ID: RET-LT-NA-DRAFT20-2025) represents a pivotal legislative initiative aimed at transposing Directive (EU) 2023/970 on pay transparency into national law. This comprehensive legislative package seeks to significantly strengthen the application of the principle of equal pay for equal work or work of equal value between men and women, addressing persistent gender pay gaps within the Lithuanian labor market. The draft legislation was officially presented to the Tripartite Council of Lithuania's Ministry of Social Security in late May 2025 and is anticipated to be approved during the fall parliamentary session of 2025, with a projected implementation date of June 7, 2026.

The impetus for this draft law stems directly from the European Union's commitment to combating pay discrimination and fostering greater pay equity across its Member States. Directive (EU) 2023/970, adopted on May 10, 2023, mandates that all EU countries transpose its provisions into national law by June 7, 2026. Lithuania, while already possessing some foundational legislation concerning equal pay and transparency, is now moving to align its legal framework more closely with the enhanced requirements of the EU Directive. This includes introducing new obligations for employers regarding pay transparency during recruitment, employee rights to information, and more robust reporting and enforcement mechanisms. The overarching goal is to empower workers with the necessary information to challenge potential pay discrimination and to hold employers accountable for ensuring fair and equitable remuneration practices.

This legislative overhaul is not merely a formal transposition but signifies a renewed national commitment to addressing systemic pay inequalities. The draft law builds upon existing provisions in the Lithuanian Labor Code and the Law on Equal Opportunities for Women and Men, which already require employers to implement gender equality principles and establish formal pay systems. However, the new amendments are expected to introduce more stringent requirements, such as mandatory gender-neutral job evaluation criteria for all employers, expanded pay gap reporting obligations, and a clearer framework for joint pay assessments when significant disparities are identified. The Ministry of Social Security and Labour, in collaboration with other state institutions and social partners, is spearheading this reform, aiming to create a more transparent and equitable working environment for all individuals in Lithuania. The proactive nature of this legislation seeks to prevent pay discrimination from occurring in the first place, rather than solely relying on reactive measures, thereby fostering a culture of fairness and accountability in the workplace. This will likely lead to significant shifts in corporate HR and compensation practices across the country.

Definitions

The Draft Law, in transposing Directive (EU) 2023/970, is expected to clarify and expand upon several key definitions crucial for its effective implementation. Central to the legislation is the concept of “equal pay for equal work or work of equal value.” This principle, enshrined in Article 157 of the Treaty on the Functioning of the European Union, dictates that remuneration for work that is the same or of comparable value must be equal, irrespective of gender. The Directive emphasizes that 'work of equal value' should be assessed based on objective, gender-neutral criteria, including skills, effort, responsibility, and working conditions. The Lithuanian draft is expected to adopt these criteria, ensuring that job evaluation systems are free from direct or indirect gender bias. This assessment must consider the nature of the duties performed, the complexity of tasks, the level of autonomy, and the physical or mental demands of the role, ensuring a holistic and unbiased comparison.

Another fundamental term is “remuneration,” which encompasses not only the basic salary but also any other consideration, whether in cash or in kind, that a worker receives directly or indirectly from their employer in respect of their employment. This broad definition includes bonuses, allowances, benefits, and any other components of pay, ensuring that all elements contributing to a worker's total compensation are subject to the equal pay principle. The Lithuanian Labor Code already provides a universal concept of wage, detailing basic remuneration, additional remuneration, bonuses for qualifications, allowances for additional work, and bonus payments for performance. The draft law will likely align these existing definitions with the comprehensive scope of remuneration as outlined in the EU Directive, ensuring that all forms of direct and indirect pay are covered, including performance-related pay, overtime, shift allowances, and non-monetary benefits like company cars or health insurance.

The concept of “pay transparency” is at the heart of the new legislation. It refers to the measures designed to ensure that workers and job applicants have access to information about pay levels and pay-setting criteria, enabling them to identify and challenge potential pay discrimination. This includes transparency before employment (e.g., salary ranges in job advertisements), during employment (e.g., right to request pay information), and through regular reporting on gender pay gaps. The draft law aims to significantly enhance this transparency, moving beyond Lithuania's existing requirements to provide more detailed and accessible pay data. Furthermore, the concept of