Can you pay a new hire more than a long-serving employee?

Yes, but not in any way you like. The new hire’s pay must fit the group range or a written exception in the system (VDI FAQ, question 3.11). A higher figure must rest on objective criteria set in the pay system in advance (VDI FAQ, questions 3.4, 3.10 and 3.12). Our recommendation: record the specific reason on the day you decide. If the reason is the labour market, you need evidence: which data, from where and when. And existing staff doing the same work or work of equal value may need a raise within a reasonable time. For an overview of all the duties, see “Pay transparency in Lithuania: what employers must do, and by when”.

Why this is a risk already

The law: the employer must pay equal pay for the same work and for work of equal value (DK Article 26(2)(4)). When assessing whether women and men are in a similar position, the comparison is not limited to those hired at the same time (DK Article 26(4)(4)). So a woman hired ten years ago can compare herself with a colleague of the other sex hired yesterday. VDI stresses that differences between employees of the same sex must also be assessed (VDI FAQ, question 3.5).

Once the employee points to facts from which discrimination may be presumed, the employer must prove there was none (DK Article 26(5)). If a breach is found, compensation is awarded: all unpaid pay plus material and non-material damage (DK Article 219(2)).

In our view, the biggest risk is not an inspection. It is any departing or unhappy employee who learns that the newcomer earns more. If the reason was never written down, proving it years later will be very hard.

What justifies a difference and what does not

The State Labour Inspectorate (VDI) gives clear guidance in its questions-and-answers page (FAQ). It is guidance, not law, but it may carry weight in a dispute.

May justify a difference inside the group range, if the criterion is written into the system in advance:

• more experience or a higher qualification needed for this work (VDI FAQ, question 3.3);
• a shortage of specialists on the market or regional differences, if you can prove them with data (VDI FAQ, question 3.1);
• length of service in the specific job: it sets the place in the range but must not create a disproportionate gap (VDI FAQ, question 7.7).

Does not justify a difference:

• the probation period as such (VDI FAQ, question 3.10);
• the newcomer negotiated better. In our view, negotiating skill is not a requirement of the job, so it is not an objective criterion;
• “that is how it turned out”, “the budget was different then”;
• a subjective wish to keep an employee (VDI FAQ, question 3.4).

Market and grouping are different things. VDI says market conditions may be a criterion for differentiating pay, but not for grouping jobs (VDI FAQ, question 3.1). A job’s value is set by skills, qualification, effort, responsibility and working conditions (DK Article 140(3)). The market may affect only the individual pay inside the group, or an exception described in the system in advance.

In its judgment of 27 October 1993 in case C-127/92 (Enderby), a case on equal pay for men and women, the EU Court of Justice held that the state of the labour market may be an objectively justified economic ground. Whether and to what extent the market caused the difference is decided by the national court, applying the principle of proportionality where needed (paragraphs 26 and 29 of the judgment).

A programmer and a lawyer with the same points

After job evaluation, a programmer and a lawyer may score the same points and land in the same group. Yet the market pays the programmer more. What then?

Our recommendation:

1. Do not change the scores to lift the programmer into a higher group. That would be grouping by market, which VDI says is not allowed (VDI FAQ, question 3.1).
2. Describe an exception in the system: when, on what data and by how much the range may be exceeded where there is a need and the supply of specialists with exceptional competences is very limited. VDI accepts this if the rules are written into the system (VDI FAQ, question 3.11).
3. Each time you use the exception, fill in a pay decision note (example below) and attach the market data.
4. Once a year, check whether the market reason still holds. If it no longer does, do not widen the gap further.

What to document: the pay decision note

For every new hire whose pay is above the group midpoint or above existing staff, fill in a short note and keep it in the personnel file.

> Decision on setting pay > Date: 2026-11-03. Job: programmer. Job group: 5 (range 85–115% of the group midpoint). > Base pay set at: 112% of the group midpoint. > Criteria under point 4 of the pay system: experience in similar jobs – 6 years (3 required); extra competence – payment systems integration. > Market data: search 2026-09-15 to 2026-10-20, 2 rounds of ads, 11 candidates, 3 declined over pay; extract of 8 similar ads with stated ranges (attached); State Data Agency (VDA) figures on average pay by occupation (attached). > Comparison with the group: other group members – 96% and 104%. The difference rests on experience and market data. > Review: by 2027-05-03 assess whether other employees in the same group need a pay change. > Decision taken by: managing director [name, signature].

The law does not require market data. The Labour Code says nothing about it. But if you justify a difference by the market, you must be able to prove the reason (VDI FAQ, question 3.1), so keep a record of it. Market data that works:

• job ads with pay ranges. The base pay amount or range is mandatory in ads (DK Article 25(6)), so this is the easiest data to collect. Save dated screenshots;
• the State Data Agency (VDA) table of average pay by occupation – freely available and a practical starting point for a small company. Record the table, the year and the occupation code;
• evidence of a failed search: ad dates, number of candidates, reasons for refusals.

What not to do: do not ask other employers what they pay, and do not agree pay with them. In our view, swapping such information between competitors can breach competition law. Use public data and job ads.

What to do about existing staff

VDI says: if you raise the group range for a new specialist, within a reasonable time, for example six months, you may have to review and raise the pay of existing employees doing equal-value work (VDI FAQ, question 3.3). VDI also says that where the work is identical and the results are the same, and the gap is disproportionate and not objectively justified, it must be closed within a reasonable time by raising the pay of the lower earner (VDI FAQ, question 7.7).

Paying a newcomer more is allowed. But it must be explained by the same logic that applies to everyone in the group.

Examples

A 12-person company. Two warehouse workers, both in the same group, range 85–115%. The one with 7 years of service gets 95%. A newcomer without experience asked for 105% because another employer offered that. Decision: the newcomer may be offered only what the system’s criteria support, say 88%. Our recommendation: if you cannot find anyone without paying 105%, raise the long-serving worker to at least the same level within a reasonable time (VDI’s example is six months, VDI FAQ question 3.3). His experience is greater, so it is safer to put him above the newcomer.

A 45-person company. The company is hiring a programmer. By points the job sits in the same group as the lawyer and the senior accountant, range 85–115%. The market pays a programmer about 130% of this group’s midpoint. The system has an exception where exceptional competences are needed (for example specific programming languages and payment-systems experience) and the supply of such specialists is very limited: up to 135%. The company fills in the note, attaches the ad extract and VDA data, and sets 128%. The lawyer’s and the accountant’s pay stays as it is. There is no shortage on their market, and the exception is written down and applied only on data.

Mistakes to avoid

• Pay is set by the candidate’s expectations rather than the system’s criteria.
• The market reason is “known to everyone” but written down nowhere.
• The range is raised for the newcomer and existing staff are forgotten.
• Points are added to the programmer job so that it lands in a higher group.
• An exception is used although the system does not contain one.

What to do if…

…the new hire’s pay is above the group maximum? Either change the system (raise the range) or use an exception already described in it (VDI FAQ, questions 3.3 and 3.11). Changing the system requires information and consultation (DK Article 140(3)). Without an exception and without changing the system, do not exceed the maximum.

…a long-serving employee found out and complains? Do not penalise the long-serving employee for the complaint (DK Article 26(2)(5)). If the newcomer disclosed their own pay to enforce their right to equal pay, that data is not confidential information (DK Article 39(1)), so, in our view, they may not be penalised for it either. Our recommendation: acknowledge the complaint in writing within 48 hours, and within two to three weeks explain in writing which criteria caused the difference. Do not hand over the decision note or the colleague’s pay: data on an individual employee’s pay is given only where laws provide or with that employee’s consent (DK Article 148(2)). If there is no objective reason, offer a pay raise plan with a date (see “Job evaluation found unjustified pay gaps: how to fix them”).

…an employee got another offer and wants more? You may offer more, but only on criteria described in the system in advance (VDI FAQ, question 3.4). The Labour Code does not require employers with fewer than 50 employees to set pay-increase criteria and procedure in the system (DK Article 140(3)), but VDI stresses that any pay difference must always rest on objective criteria (VDI FAQ, question 1.4). Our recommendation: put increase criteria into the system anyway. Fill in the same note.

Checklist for this week

1. List the current employees hired later who earn more than long-serving staff in the same group.
2. For each case, write down the reason and collect the evidence.
3. Where there is no reason, plan a raise for the long-serving employee within a reasonable time, for example 6 months.
4. Put criteria for placement in the range into the pay system and, if needed, a market exception.
5. Approve the pay decision note form and use it for every hire.

Related articles

• Job evaluation found unjustified pay gaps: how to fix them
• Job evaluation and grouping for a pay system: a practical guide
• Hiring and job ads in Lithuania: pay ranges, interviews, confidentiality
• An employee demands equal pay: what the employer should do
• Pay transparency in Lithuania: what employers must do, and by when

How to start

Send us your pay system (if you have one) and an anonymised table of groups and pay. We will assess which differences are justified and prepare the exception clause and the pay decision note form.

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.