Pay system without a works council: how to consult employees in Lithuania

Unless a collective agreement sets the pay system, the information and consultation procedures must be carried out before a pay system is approved (DK Article 140(3)). If your average headcount is 20 or more, you consult the works council, and if there is none you must first set one up. If your average headcount is under 20 and there is neither a representative nor a trade union, the law sets no direct procedure. Our recommendation: give the draft in writing to every employee, allow at least 10 working days for comments, and record in a protocol what happened to each comment. Consultation is not a vote: the employer decides. A works council must be able to get reasoned answers from the employer (DK Article 204(6)), and when consulting employees directly we recommend doing the same.

The system must be approved, or an existing one reviewed and amended where needed, by 31 December 2026 (Article 23(4) of Law No. XV-969). The full list of duties is in “Pay transparency in Lithuania: what employers must do, and by when”. This article covers consultation only.

Who to consult

The law: information and consultation procedures must be completed before the pay system is approved or changed (DK Article 140(3)). Who you talk to depends on headcount and representatives.

| Your situation | Who you consult | Basis | |—|—|—| | Average headcount 20 or more, works council exists | The works council | DK Article 206(1) | | Average headcount 20 or more, no works council | First start the works council election; until it exists, see below | DK Article 169(1) | | A trade union has more than 1/3 of staff as members | The union, which acts as the works council | DK Article 169(4) | | Average headcount under 20, trustee elected | The employee trustee | DK Article 177(1) and (2) | | No works council or trustee, but an employer-level trade union exists | Information goes to the union | DK Article 206(4) | | Average headcount under 20, no representatives and no union | All employees directly (our recommendation) | The law sets no procedure |

20 or more employees. A works council must be set up on the employer’s initiative when the average headcount is twenty or more (DK Article 169(1)). Where no collective agreement sets the pay system, Article 206 expressly requires such an employer to consult the works council on the pay system (DK Article 206(1)).

Fewer than 20, with a trustee. The employee trustee has the rights and duties of a works council (DK Article 177(2)). Our recommendation: apply the same Article 206 deadlines to the trustee.

Fewer than 20, no representatives and no union. Here the law is silent. In other cases, such as collective redundancies, the Code requires information to go to employees directly or at a general meeting of the employer’s employees (DK Article 207(3)). Our recommendation: do the same for the pay system. We are not aware of case law on whether a system approved without such consultation would stand. Treat it as a risk that is easy to avoid.

Consultation is not a vote

The law: consultation is an exchange of views and the opening and development of dialogue between works councils and the employer (DK Article 204(1)). Consultations must aim at a decision acceptable to both sides (DK Article 204(4)). The works council must be given the opportunity to get reasoned answers from the employer (DK Article 204(6)).

What this means:

• employees neither approve nor reject the system; the employer takes the final decision;
• every comment must be heard and answered with a reason (when consulting employees directly, this is our recommendation);
• if a dispute arises years later, the protocol with answers shows the system was not imposed from above.

This matters more than it looks. In our view, the main risk is not a fine but a dispute with a departing employee. An approved, discussed and documented system narrows such a dispute considerably.

What to give employees

Give them the draft system: job groups, the pay range of each group, the bonus and allowance rules, and the criteria for placing a person within a range. VDI recommends discussing the general grouping principles as well (VDI FAQ, question 2.3).

Do not attach a list of individual salaries. Data on an individual employee’s pay are given only where the law provides or with the employee’s consent (DK Article 148(2)).

The law: information to a works council is given on time and in writing (DK Article 204(2)). Our recommendation: do the same when you consult employees directly. An email to all staff and a copy in an accessible place are enough.

Deadlines when there is a works council or trustee

• the works council is informed ten working days before the planned approval (DK Article 206(2));
• within three working days it may demand consultations, which start within the next three working days (DK Article 206(3));
• consultations last at least five working days, unless the representatives agree otherwise (DK Article 206(5));
• the works council may submit written proposals within fifteen working days (unless another period is agreed) of the first consultation day; if it files a written, reasoned request, the employer may not approve the system during that period (DK Article 204(4));
• the results are recorded in a protocol or an agreement, or the local rules are adopted (DK Article 204(4)).

Example: a 12-person company without representatives

The company has 12 employees and no works council or trustee. The deadlines follow our recommendation, not the law.

| Date | Step | |—|—| | 2026-11-09 | The manager and the accountant finish the draft system and the job group table | | 2026-11-16 | Draft and notice sent to all 12 employees; a paper copy left in the kitchen | | 2026-11-19 | 30-minute meeting: the manager explains the groups and ranges and answers questions | | 2026-11-30 | Deadline for comments (10 working days) | | 2026-12-04 | Protocol with an answer to each comment sent to everyone | | 2026-12-07–11 | If the draft changed materially: changed parts re-sent for 5 working days | | 2026-12-14 | System approved by the manager’s order | | by 2026-12-18 | Employees acquainted with the system; it is placed where everyone can read it |

This leaves two weeks of margin before year end. Many people take leave in late December, so we do not recommend starting later.

Example: a 45-person company with no works council yet

The law: this company must set up a works council (DK Article 169(1)). It must approve its pay system, or review and where needed amend an existing one, by 31 December 2026 (Article 23(4) of Law No. XV-969).

Our recommendation:

1. This week, start the works council election and keep proof that you did.
2. In parallel, consult all employees directly on the 12-person timetable.
3. If the works council is elected before you approve the system, consult it on the deadlines of Articles 204 and 206. Inform it no later than 2026-11-16. If it demands consultations and files a written, reasoned request, the system may not be approved for up to 15 working days from the first consultation day, unless another period is agreed (DK Article 204(4)). If you inform it in early December, that period may end only in January 2027.
4. If it is elected after approval, give it the system and the protocol. Treat its proposals as a change to the system, with the full consultation procedure.

Sample notice to employees

> Draft pay system > > By 31 December 2026 the company must approve a pay system. The draft is attached: job groups, pay ranges, bonus and allowance rules. > > Please read it and send comments or questions in writing to [email] or to the box at [place] by 30 November 2026. We will discuss the draft at a meeting on 19 November 2026 [time, place]. > > We will answer every comment in writing and say whether we took it into account and, if not, why. Answers will be sent by 4 December 2026. > > Manager [name]

Sample protocol

> Protocol of consultations on the draft pay system > > Date: 2026-12-04. Draft given: 2026-11-16, to all 12 employees by email and on paper. Meeting: 2026-11-19, 9 employees attended. Deadline for comments: 2026-11-30. Comments received: 4.

| No. | Comment (summary) | Decision | Reason | |—|—|—|—| | 1 | The customer service specialist’s effort is scored too low | Accepted | Moved from group I to group II, because handling complaints demands high emotional effort | | 2 | Asks for a long-service allowance | Partly | Service length added as one criterion for placement within the range; no separate allowance | | 3 | Proposes merging the driver and warehouse groups | Rejected | The evaluation table shows different responsibility for goods and equipment | | 4 | Asks whether current pay will change | Explained | No pay is reduced; two employees will be raised to the range minimum from 2027-01-01 |

> Conclusion: the draft is being changed under comments 1 and 2. The changed parts will be given to employees on 2026-12-07, with comments accepted until 11 December 2026 inclusive. If no new comments arrive, the system is approved on 2026-12-14; any comments received will be recorded in an annex to this protocol. > > Recorded by [name, position].

What to do if…

…nobody comments? Record it in the protocol: when, to whom and how you gave the draft, the deadline, and that no comments came. Silence is not a problem if you can prove there was a chance to comment.

…employees object to the whole system? Ask them to be specific: which group, which range, why. Answer each specific point in the protocol. The employer still approves the system.

…you want to change something after consultation? In our view, a small editorial fix that does not change the substance needs no new procedure. If you change groups, ranges or bonus rules, give the changed parts to employees again. The law requires consultation when the system is changed too (DK Article 140(3)).

…your average headcount reaches 20? Start the works council election. Agree the next change of the system with the works council.

Mistakes to avoid

• The system is approved first and the draft is given to employees only afterwards.
• Comments are taken orally and never written down.
• Rejected comments are left without a reason.
• The draft shows named people’s salaries.
• A draft changed materially after consultation is approved without being given to staff again.
• The consultation papers are not kept.

Checklist

1. Find your situation in the table above.
2. If your average headcount is 20 or more and there is no works council, start the election this week.
3. Prepare a draft without individual salaries.
4. Send the draft and the notice, with a deadline for comments.
5. Hold a short meeting for questions.
6. Write a protocol answering each comment.
7. Give materially changed parts to staff again.
8. Approve the system by order and make it available to everyone.
9. Our recommendation: keep the whole file (draft, notice, comments, protocol, order, proof of acquaintance) for as long as the system is in force and for at least three years after it changes.

Related articles

• Small employers: a minimum pay system by 31 December 2026
• Job evaluation and grouping for a pay system: a practical guide
• Pay transparency in Lithuania: what employers must do, and by when

How to start

Send us the draft system and tell us how many employees you have and whether there are employee representatives. We will prepare the notice to staff, the protocol form and reasoned answers to the comments you receive.

Linden’s full solution, from the pay system to informing employees, is at atlygis.linden.lt. Check which requirements apply to you: atlygis.linden.lt/en/self-check.

Phone +370 5 212 1506, email info@linden.lt

More about this service: drafting labour law documents.