FAQ of our labour law consultations page<\/a> (in Lithuanian). This article covers what remains.<\/p>\r\nWhy leave cannot be \"bought out\"<\/h2>\r\n
The question comes up often. Some employees do not take leave for years, dozens of days build up, and with them the company's liability. The idea arises: every year, pay out whatever exceeds the annual entitlement and cross the days off.<\/p>\r\n
The law leaves no room for this. Until 31 October 2026, DK Article 127(6) allows compensation to be paid only when the employment ends.<\/p>\r\n
From 1 November 2026, a collective agreement concluded above employer level may provide for monetary compensation for the part of annual leave that exceeds the leave entitlement for two working years, together with rules for calculating and paying it. The same agreement may shorten the three-year period for using leave to two years (DK Article 127(5), DK as in force from 1 November 2026). From that date, DK Article 127(6) names this case as a second exception to the prohibition (DK Article 127(6), DK as in force from 1 November 2026). A company's internal rules or an employer-level collective agreement do not create such an exception. Also, the higher-level agreement must apply to your company and to that particular employee. An employer that is a member of the employers' organisation that signed it must apply it to employees represented by the trade unions (DK Article 197(3)). From 1 November 2026, the parties to the agreement may agree to apply certain of its provisions to all employees of the member employers (DK Article 197(5), DK as in force from 1 November 2026). So before paying compensation, check that the agreement applies to that particular employee. Work rules cannot change that: Article 3(8) of the Labour Code (DK) provides that an employer's internal regulations cannot make employees' position worse than the Code does, and where they conflict with it, the Code applies.<\/p>\r\n
The employee's request or consent does not change this. The prohibition does not depend on the employee's wishes.<\/p>\r\n
The phrase \"except where the employee was in fact unable to use it\" is in DK Article 127(5). It is not about paying out leave while the employee keeps working. It is about when the right to leave is not lost. In practice, it is usually the employee who relies on this exception in a dispute: \"I asked, but they would not let me go\". So the employer needs evidence that taking leave was possible.<\/p>\r\n
What to do instead: the annual leave schedule<\/h2>\r\n
The tool the law gives the employer is not money but planning.<\/p>\r\n
Annual leave must be granted at least once per working year, and at least one part of it must be no shorter than ten working days (twelve working days for a six-day working week, and two weeks where the number of working days per week is smaller or varies) (Article 128(1) of the Labour Code, DK).<\/p>\r\n
For the second and later working years, leave is granted according to the workplace's annual leave schedule (kasmetini\u0173 atostog\u0173 suteikimo eil\u0117<\/em>). The schedule is drawn up as provided in the collective agreement, an agreement between the employer and the works council, or other labour law rules, for the period from 1 June to 31 May of the following year, unless set otherwise (DK Article 128(3)). Employees' wishes are taken into account when drawing it up, and some employees have priority: first pregnant employees and those raising at least one child under three (DK Article 128(4)), then those raising at least one child under fourteen or a child with a disability under eighteen, those raising two or more children (DK Article 128(4)(3)), those who took less than ten working days of leave in the last calendar year (DK Article 128(4)(4)), and those with unused annual leave from the previous working year.<\/p>\r\nIn some cases the employer must grant an employee's request, for example to a pregnant employee before or after maternity leave (DK Article 128(5)), or to an employee who is studying and fits leave around exams (DK Article 128(5)(3)).<\/p>\r\n
How leave is formalised is set by the employer itself (DK Article 128(6)). This is exactly where the procedure is worth writing into the work rules:<\/p>\r\n
- how an employee requests leave (an email is enough);<\/li>
- who approves it, and within what time;<\/li>
- by when employees submit their wishes for the schedule;<\/li>
- what happens if an employee submits no wishes: the employer proposes the dates itself and records this in writing.<\/li><\/ul>\r\n
Let us be frank about the limits. In our view, the schedule helps with planning, but if an employee refuses to take leave, there is in practice no effective legal means of making them. The most realistic route is a conversation and proposals recorded in writing. If the employee still does not take leave, those documents will be the evidence that the opportunity was there.<\/p>\r\n
Keep the leave requests<\/h2>\r\n
This is a practical point we have to repeat often. Where leave requests are made by email, those emails are the evidence of the leave records. Without the requests, the balance of accrued days can no longer be checked. The compensation calculated by the accountant may then be much higher or lower than the true figure, and any dispute will turn on what can be proved. So keep the requests and approvals in one place.<\/p>\r\n
Carrying over and extending leave<\/h2>\r\n
If an employee falls ill or goes on purpose-specific leave, such as paternity or childcare leave, annual leave already granted is moved for that period (Article 129(1) of the Labour Code, DK).<\/p>\r\n
If this happens before the leave starts, the start is postponed, but not beyond the end of the leave already granted. If it happens during the leave, the unused part is granted at another time agreed by the parties, but in the same working year. At the employee's request, the extended part of the leave may be added to the next working year's leave (DK Article 129(2)).<\/p>\r\n
Holiday pay is paid no later than on the last working day before the leave starts. However, for the part of the leave exceeding twenty working days (twenty-four for a six-day week, or four weeks in other cases), holiday pay is paid during the leave, on the normal pay dates (Article 130(2) of the Labour Code, DK). At the employee's separate request, it may be paid on the usual payroll schedule (DK Article 130(3)).<\/p>\r\n
How compensation is calculated on termination<\/h2>\r\n
First, how many days. Leave is counted in working days, and public holidays are not included in its length (Article 126(4) of the Labour Code, DK). The right to part of the leave (and to compensation for it) arises once the employee has earned at least one working day of leave (Article 127(2) of the Labour Code, DK).<\/p>\r\n
Then, the value of a day. Average pay is calculated under the Procedure for Calculating Average Pay (Vidutinio darbo u\u017emokes\u010dio skai\u010diavimo tvarkos apra\u0161as<\/em>, the \"Procedure\") approved by Government Resolution No 496 of 21 June 2017:<\/p>\r\n- the reference period is the last 3 calendar months before the month for which average pay is paid (point 5.1 of the Procedure);<\/li>
- if the dismissal day coincides with the last working day of that month under the work schedule, that month is included in the reference period (point 5.2 of the Procedure);<\/li>
- average daily pay is the pay for the reference period divided by the number of days actually worked, including rest days and public holidays worked (point 5.4 of the Procedure);<\/li>
- holiday pay follows the same rules in point 5 of the Procedure (point 6 of the Procedure).<\/li><\/ul>\r\n
The Procedure gives no separate formula for compensation for unused leave. In practice, compensation is calculated by multiplying the number of unused working days of leave by the average daily pay.<\/p>\r\n
If the contract is terminated by agreement, there is another route. The offer must state how unused leave will be dealt with (Article 54(2) of the Labour Code, DK). So it can be agreed that the employee uses part of the leave before the employment ends, and is paid compensation for the rest.<\/p>\r\n
How to start<\/h2>\r\n
Send us your work rules (if you have them) and tell us how many employees have a large amount of accrued leave. We will prepare a leave procedure and rules for drawing up the schedule, or check the compensation calculation before a dismissal.<\/p>\r\n
Phone +370 5 212 1506, email info@linden.lt<\/p>\r\n
More about this service: other labour law consultations<\/a>.<\/p>"}]},"_links":{"self":[{"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/irasas\/2085","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/irasas"}],"about":[{"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/types\/irasas"}],"version-history":[{"count":0,"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/irasas\/2085\/revisions"}],"wp:attachment":[{"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/media?parent=2085"}],"wp:term":[{"taxonomy":"kategorija","embeddable":true,"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/kategorija?post=2085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}