An employee demands equal pay: what the employer should do

An employee writes that a colleague doing the same work earns more and asks for the difference. First, do not panic and do not answer orally. Once the employee points to facts from which discrimination may be presumed, the law shifts the burden of proof to the employer, so the side with written criteria and reasons wins. Within two weeks you can assemble a justification file, reply in writing and decide whether to justify the gap, correct it or settle. For an overview of all employer duties, see “Pay transparency in Lithuania: what employers must do, and by when”.

Why this is more serious than a fine

The law: once an employee states facts from which discrimination may be presumed, the employer must prove there was none (DK Article 26(5)). The employer must pay equal pay for the same work and for work of equal value (DK Article 26(2)(4)).

Such a fact may be that a colleague of the other sex doing the same or equal-value work earns more. From then on, you explain. When assessing whether women and men are in a similar position, the comparison is not limited to employees hired at the same time (DK Article 26(4)(4)). If there is no comparable colleague of the other sex, the employee may rely on any other evidence, including statistics (DK Article 26(4)(3)). VDI confirms that employees may then rely on statistical data or other information they have (VDI FAQ, question 7.2).

If a breach is found, the employee is awarded compensation: full recovery of unpaid pay, compensation for pecuniary and non-pecuniary damage, and compensation for lost job-related opportunities (DK Article 219(2)).

Our view: the biggest risk is not the inspectorate but any departing employee. He can claim the difference during a dispute, when the relationship is already broken. If you have not approved a pay system by 31 December 2026 (Article 23(4) of Law No. XV-969), he will easily show that no objective criteria exist.

Deadlines

The law: the employee must apply to the labour disputes commission within three months from when he learned or should have learned of the breach (DK Article 220(1)). The commission may renew a missed deadline if it accepts the reasons as important (DK Article 220(2)). Even if the commission refuses to renew the deadline, the employee may go to court within one month of that decision (DK Article 231(1)). The general limitation period for employment matters is three years, unless the Labour Code or other laws set shorter periods for particular claims (DK Article 15(2)).

Case law: The Supreme Court has held that the three-month deadline is procedural: missing it does not extinguish the claim itself (ruling of 20 February 2020, civil case No. e3K-3-28-701/2020, para. 33).

Our view: the statute does not say clearly how these two periods work together in pay-gap cases, but a Supreme Court ruling shows that a missed three-month deadline does not extinguish the claim. Plan as if a dispute could cover up to three years. From 1 March 2027 employees may ask for the averages by sex in their job group (Order No. A1-433, point 2.3). In our view, the day the data arrive may become the day the employee “learned” of the gap. So your reply to a data request must be accurate and prepared in advance.

How the dispute itself runs before the commission is explained in “Labour disputes commission claim: how to file and by when”. From 2027, additional explanations of the data the employee received must be given within 2 months of receipt of the request for the data (DK Article 148(5), edition from 2027-01-01); if they are not given, the employee may complain to VDI (VDI FAQ, question 6.8).

The first 48 hours

1. Log the demand. Date, who received it, which channel. Keep the message.
2. Confirm receipt in writing (sample below). Admit nothing and promise no amounts.
3. Appoint one responsible person (the manager or an HR person) and agree that managers do not discuss the demand with other staff. You may not forbid the employee to disclose their own pay when they do so to enforce equal pay (DK Article 39(1)).
4. Secure the data. Both employees’ contracts, job descriptions, every pay change, allowance, bonus and benefit for the last three years.
5. Do not backdate anything. Do not rewrite the job description or the system with a backdated date; new documents are approved only with their real date. Such a document will hurt you more in a dispute than having none.

The law: an employee must be protected from hostile treatment or adverse consequences after filing a discrimination complaint (DK Article 26(2)(5)). No bonus cut, workload change or dismissal “on the occasion”.

Within two weeks: the justification file

Put into one folder:

• The pay system and proof that employees were given access to it.
• The job evaluation sheet: how both jobs score on skills, qualification, effort, responsibility and working conditions (DK Article 140(3)).
• Whether the work is the same or of equal value. Same work means the two employees could swap places without extra cost for the employer (DK Article 140(5)). If the jobs sit in different groups, write down why.
• The reasons for each person’s place in the range: experience, competences, results, per employee, with a date and a document.
• The market reason, if you rely on one: source, date, which data. Without evidence the market is no argument.
• The staff consultation file: notice, comments, why each was accepted or rejected.

VDI says experience and length of service allow pay to differ inside a range, but where the work is identical, results are the same and the gap is disproportionate and not objectively justified, it must be closed within a reasonable period by raising the lower pay (VDI FAQ, question 7.7). Differences also matter between employees of the same sex (VDI FAQ, question 3.5).

Sample reply to the employee

> Dear [name], > > We have received your request of [date] comparing your pay with that of the employee holding the position of [position]. We take your request seriously. > > So that we can reply in full, please tell us by [date] which position and which period you compare your pay with, and which circumstances you consider important. > > We will review how your position and the comparator position are evaluated under the criteria of our pay system and the reasons for your pay. We will reply in writing by [date, no later than 2–3 weeks]. > > This reply neither accepts nor rejects your claim. Your request will have no adverse consequences for your work. > > Kind regards, > [name, position]

In the final reply, state the criteria and reasons, but do not disclose another employee’s actual pay.

Three possible outcomes

1. The gap is justified. Reply in writing: which criteria, which documents, which place in the range. Offer a meeting to explain.
2. The gap is not justified. Correct it by raising the lower pay (see “Job evaluation found unjustified pay gaps: how to fix them”). VDI says unjustified gaps must be corrected within a reasonable period, for example 6 months (VDI FAQ, question 3.6). Decide on the past period separately.
3. It is unclear. Consider a settlement: part of the difference for the past and clear pay for the future. Our recommendation: have a lawyer draft the settlement so that it clearly covers the subject of the dispute.

Examples

A 12-person service company. An administrator asks for the same pay as a warehouse worker. There is no pay system yet. Within two weeks the manager scores both jobs on the five criteria. They score about the same. The company decides to raise the administrator’s pay to the warehouse worker’s level within three months and offers part of the difference for last year. The decision and the calculation are written down, and the system is approved before year-end.

A 45-person manufacturer. A departing engineer says a newly hired colleague got 20% more. The company has a system and an evaluation sheet: both are in the same group. The newcomer has 8 years of experience with equipment the engineer has not used, and experience is a listed placement criterion. The company replies in writing with the criteria and documents. The file is ready if the dispute reaches the commission.

What to do if…

• …there is no pay system yet. Collect what you have and reply. In parallel, finish the system by 31 December 2026. Do not try to make it “justify” this case after the fact.
• …the gap is real. Fix it now by raising the lower pay. A corrected gap also limits the scope of a dispute about the past.
• …the employee has already left. Check when he learned of the gap and keep every document. Answer a lawyer’s letter or the commission within the set deadline.
• …the employee wants a colleague’s pay. Do not give a named colleague’s data. The employee is entitled to the averages by sex in his own job group (DK Article 148(4), edition from 2027-01-01): monthly data may be requested from 1 March 2027, annual data from 1 March 2028 (Order No. A1-433, point 2.3). If the data would reveal an identifiable colleague’s pay, they go, at the employee’s request, only to employee representatives, VDI or the Equal Opportunities Ombudsperson (DK Article 148(7), edition from 2027-01-01).

Mistakes to avoid

• Answering orally and smoothing it over with a one-off bonus without explanation.
• Rewriting documents after the demand, with an earlier date.
• Arguing that the newcomer “negotiated better”. In our view, negotiating skill is not an objective criterion, because it is not a job requirement.
• Moving the employee or cutting his bonus after the complaint.

Related articles

• Employee requests for pay data from 1 March 2027: how to reply
• Fines and disputes: the risk of having no pay system in Lithuania
• Labour Disputes Commission in Lithuania: how to file and by when
• Unlawfully dismissed in Lithuania? What to do and the deadline to act
• Job evaluation found unjustified pay gaps: how to fix them

How to start

Send us the employee’s demand, your pay system (if any), both job descriptions and the pay history. We will assess the risk and prepare the reply to the employee, the justification file and, if needed, a settlement agreement.

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.