Lithuania: Wage payment in cash no longer possible

Amendments to the Labour Code stipulate that wage-related payments must be made only to the employee’s account.

On 1 January 2022, amendments to the Lithuanian Labour Code entered into force. These stipulate that wages and other employment-related payments, as well as daily allowances and reimbursements of travel expenses, must be paid by bank transfer to the employee’s payment account. The Labour Code provides only one exception: for seafarers, who are subject to the wage payment procedure laid down in Lithuania’s Law on Merchant Shipping.
These amendments remove any possibility of paying employment-related benefits in cash or to the account of another person (e.g. family member, friend). If the employee does not provide the employer with a personal bank account into which wages should be paid, the employer will be entitled to deposit wages and other employment-related payments due to the employee in the organization’s account until the employee provides payment account details.
These amendments to the Labour Code are a continuation of legislative measures to increase wage transparency, prevent discrimination, reduce the shadow economy and protect workers’ rights. It should be noted that already in 2019 amendments to the Labour Code entered into force, requiring job advertisements to indicate the salary and to indicate the proposed amount of the basic salary or the amount of the fixed part of the salary and/or the range of the amount. Employers may also indicate in job advertisements the amount of any bonuses to be paid, but these bonuses must be clearly distinguished from the basic salary.
The Labour Inspectorate, as part of its supervisory role, has observed a decreasing trend of violations of the mandatory requirement to indicate salaries in job advertisements, which also shows that indicating salaries in job advertisements is not a problem for businesses, but on the contrary, acts as a positive competitive advantage in attracting the best talent.

Source:
Law Amending Article 139 of the Labor Code of the Republic of Lithuania, TAR, 08/07/2021, No. 15520.

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