{"id":2097,"date":"2026-09-24T21:17:56","date_gmt":"2026-09-24T18:17:56","guid":{"rendered":"https:\/\/linden.lt\/tinklarastis\/late-or-reduced-pay-lithuania-employer-rules\/"},"modified":"2026-09-24T21:17:56","modified_gmt":"2026-09-24T18:17:56","slug":"late-or-reduced-pay-lithuania-employer-rules","status":"publish","type":"irasas","link":"https:\/\/linden.lt\/en\/blog\/late-or-reduced-pay-lithuania-employer-rules\/","title":{"rendered":"Can an employer pay late or cut pay in Lithuania, and what follows?"},"template":"","kategorija":[],"class_list":["post-2097","irasas","type-irasas","status-publish","hentry"],"acf":{"visi_puslapiai_cta_statusas":false,"visi_puslapiai_cta_antraste":"","visi_puslapiai_cta_formos_id":"","visi_puslapiai_cta_papildomas_tekstas":"","visi_puslapiai_cta_nuotrauka":null,"tinklarastis_1_autorius":null,"tinklarastis_1_iraso_tipas":false,"dinamiski_blokai":[{"acf_fc_layout":"tekstas","tekstas":"<p>No. Pay for a calendar month must be settled no later than ten working days after the month ends, unless labour law rules or the employment contract provide otherwise. If pay is late through the employer's fault, default interest is paid with it, and from 1 November 2026 new rules apply: it is counted for every calendar day of delay and is likely to be higher. If the full pay is not paid for two months in a row, the employee can leave on five working days' notice and receive severance pay. Pay cannot be cut without the employee's written consent, and an employee's refusal to work for less is not a lawful reason for dismissal.<\/p>\r\n<p>That pay is made at least twice a month, that men and women are paid equally for work of equal value, and by when final settlement is due on dismissal, we have already answered in the <a href=\"https:\/\/linden.lt\/paslaugos\/darbo-teise\/konsultacijos\/\">FAQ of our labour law consultations page<\/a> (in Lithuanian). How to raise pay is covered in our article on <a href=\"https:\/\/linden.lt\/en\/blog\/changing-employment-terms-and-raising-pay\/\">changing employment terms and raising pay<\/a>. This article covers the other side: late payment, pay cuts and set-off.<\/p>\r\n<h2>By when pay must be made<\/h2>\r\n<p>Article 146(1) of the Labour Code of the Republic of Lithuania (DK) sets two rules. First, pay is made at least twice a month, or once a month if the employee asks. Second, pay for work in a calendar month cannot be settled later than ten working days after the month ends, unless labour law rules or the employment contract provide otherwise. The payment dates and procedure must be stated in the information on working conditions that the employee receives before starting work (DK Article 44(1)(9)).<\/p>\r\n<p>Pay is made in money, by transfer to the payment account the employee names (DK Article 139(3)). At least once a month the employer must give the employee, in writing or electronically, information on the amounts calculated, paid and deducted (DK Article 148(1)).<\/p>\r\n<h2>What happens if pay is late while the employee is still working<\/h2>\r\n<p>The first consequence is default interest (<em>delspinigiai<\/em>). Where pay or other employment-related payments are paid late through the employer's fault, default interest is paid with them. Its rate is set every year by the Minister of Social Security and Labour (DK Article 147(1)).<\/p>\r\n<p>From 1 November 2026 this rule becomes stricter. Default interest is paid from the day the amount fell due, for every calendar day of delay. When setting the rate, the Minister must take into account the consumer inflation index (<em>vartotoj\u0173 kain\u0173 indeksas<\/em>) for the previous calendar year published by the State Data Agency (<em>Valstyb\u0117s duomen\u0173 agent\u016bra<\/em>), multiplied by 5 (DK Article 147(1), DK as in force from 1 November 2026). It is the index that is multiplied by 5, not the rate the Minister has already approved, so the approved rate must not be multiplied again.<\/p>\r\n<p>The new rules do not apply to every debt. Where an amount was due on or before 31 October 2026, default interest on its late payment is calculated under the earlier rules (Article 39(10) of the Law No XV-1058 amending the Labour Code, XV-1058 Article 39(10)). So late payment from November is likely to be more expensive for the employer, but the exact default interest depends on the rate the Minister approves.<\/p>\r\n<p>The second consequence is that the employee can leave. Article 56(1)(2) of the Labour Code (DK) allows the employee to terminate the contract by a written notice given at least five working days in advance if, for two months in a row or longer, the employee has not been paid the full pay due. The employer must then pay severance pay (<em>i\u0161eitin\u0117 i\u0161moka<\/em>) equal to two months' average pay, or one month's average pay if the employment lasted less than one year (DK Article 56(2)).<\/p>\r\n<p>The third is a dispute. For unpaid amounts, the employee must apply to the Labour Disputes Commission (<em>darbo gin\u010d\u0173 komisija<\/em>) within three months from when they learned, or should have learned, of the breach of their rights (DK Article 220(1)).<\/p>\r\n<h2>What happens if final settlement on dismissal is late<\/h2>\r\n<p>After the employment ends, the sanction is different. If the employer delays settlement for reasons not caused by the employee, it pays a penalty (<em>netesybos<\/em>): the employee's average monthly pay multiplied by the number of months of delay (DK Article 147(2)). If the unpaid amount is less than one month's average pay, the unpaid amount itself is multiplied instead. If the delay is shorter than one month, the penalty is calculated pro rata (DK Article 147(2)).<\/p>\r\n<p>The deadline for settlement is set by Article 146(2). All payments are made when the employment contract is terminated, and no later than the end of the employment. The parties may agree that settlement will be made within ten working days (DK Article 146(2)).<\/p>\r\n<p>From 1 November 2026 this rule changes. The part up to one month's average pay must in all cases be paid no later than the last day of employment. The parties may agree to pay it within ten working days after dismissal. The parties may agree at the time of dismissal that the part above one month's average pay will be paid later, but no later than three months after the dismissal date (DK Article 146(2), DK as in force from 1 November 2026). Where termination of the contract began on or before 31 October 2026, the earlier wording of Article 146(2) applies (XV-1058 Article 39(9)). Put that agreement in writing, because without it the general rule applies: settle by the end of the employment. The practical advice remains the one we gave <a href=\"https:\/\/linden.lt\/tinklarastis\/skubekite-atsiskaityti-su-atleidziamu-darbuotoju\/\">earlier<\/a> (in Lithuanian): settle on time.<\/p>\r\n<h2>Can pay be set off against the employee's debt<\/h2>\r\n<p>A frequent question: the employee owes the company money, and the company owes the employee pay, compensation for unused leave or severance pay. Can the company simply pay the difference?<\/p>\r\n<p>Deductions from pay can be made only in cases set by law (DK Article 150(1)). The law lists them: employer's money not used for its purpose, overpayments due to calculation errors, damage caused by the employee's fault and, in certain dismissal cases, overpaid holiday pay (DK Article 150(2)). The employer must order the deduction no later than one month after it learned, or could have learned, of the ground for it (DK Article 150(3)).<\/p>\r\n<p>The general civil-law rule allows counter-claims of the same kind to be set off (Article 6.130(1) of the Civil Code of the Republic of Lithuania (CK)), and a statement by one party is enough (CK Article 6.131(1)). But claims that are disputed in court cannot be set off (CK Article 6.134(1)(1)). Set-off is also prohibited where the subject of the obligation is property that cannot be enforced against (CK Article 6.134(1)(6)).<\/p>\r\n<p>Severance pay is such an amount: it cannot be enforced against, except for a few enforcement cases named in the law, such as maintenance (Article 739(8) of the Code of Civil Procedure of the Republic of Lithuania (CPK)). How much may be deducted from pay is set by the Code of Civil Procedure (DK Article 150(4); CPK Article 736(1)). So do not set severance pay off against the employee's debt. When setting off against pay, stay within the limits in CPK Article 736.<\/p>\r\n<p>So our practical advice is simple. If the debt is not disputed, sign a set-off document with the employee, signed by both parties, and keep within these limits. We do not recommend unilateral set-off. If it later turns out that the employee owed nothing, or owed less, the unpaid amount becomes a delayed settlement, and the penalty under Article 147(2) applies to it.<\/p>\r\n<h2>Can pay be reduced<\/h2>\r\n<p>Pay is an essential term of the employment contract (DK Article 33(2)). The employer can change essential terms only with the employee's written consent (DK Article 45(1)), and changes to the employment contract are made in writing (DK Article 43(2)).<\/p>\r\n<p>The employer must give the employee at least five working days to reply. A refusal to work on other changed terms, for example in a different role, may be treated as a reason to dismiss the employee through no fault of theirs under the procedure in Article 57 of the Labour Code. But the key part is the last sentence of the same paragraph: an employee's refusal to work for reduced pay cannot be treated as a lawful reason to terminate the employment contract (DK Article 45(2)). Foreign clients sometimes ask whether the scheme common in their country works here: \"we offer new terms and dismiss whoever refuses\". For pay cuts in Lithuania, it does not.<\/p>\r\n<p>If the employee believes the contract was changed unlawfully, they can apply to the Labour Disputes Commission. If they do not do so within three months of learning, or when they should have learned, of the breach, they are treated as having agreed to work on the changed terms (DK Article 45(3)). This is not a way around consent. A unilateral pay cut simply means the dispute may come later.<\/p>\r\n<p>In one case a client hired an employee on probation. A letter to the candidate promised a pay rise if expectations were met, but the contract did not say so. The expectations were not met, and the client wanted not to raise the pay but to cut it, offering a more junior role. Our answer: if the employee agrees, this is an ordinary amendment to the employment contract, stating which clauses change and from when. If the employee does not agree, pay cannot be cut. During probation there is a different tool: if the employer finds the probation results unsatisfactory, it may terminate the contract before the probation ends, with three working days' written notice, and without severance pay (Article 36(3) of the Labour Code, DK).<\/p>\r\n<p>If you want flexibility in future, build it in from the start. A bonus the employer awards on its own initiative to reward good work or results (DK Article 142(1)(2)) is not agreed pay, so not awarding it is not a pay cut.<\/p>\r\n<h2>Monthly salary or pay per hour<\/h2>\r\n<p>Every employment contract must set pay either per month (monthly salary) or per hour of work (DK Article 140(1)). Neither can be lower than the minimum monthly salary or minimum pay per hour approved by the Government (DK Article 34(3)). Pay also cannot be lower than set by the pay system approved at the workplace (DK Article 140(2)).<\/p>\r\n<p>Which option is better depends on the work. A monthly salary is simpler to account for and clearer for the employee. Pay per hour suits work whose volume varies and where hours actually worked are paid. In one case a foreign parent company wanted its Lithuanian employees to be paid only for hours actually worked, instead of a fixed salary. That is possible, but it is a change to the pay term and needs each employee's written consent (DK Article 45(1)).<\/p>\r\n<p>The same applies the other way round. One employee asked for the rate per hour in their contract to be restated as a monthly amount, because a document for a foreign institution required it. An employee has the right to ask for such a change, and a refusal of a written request must be reasoned and given in writing within five working days (DK Article 46(2)). Sometimes the contract does not need to change at all: at the employee's request, the employer must issue a certificate that states, among other things, the amount of pay (DK Article 148(3)).<\/p>\r\n<h2>Severance pay and amounts already paid<\/h2>\r\n<p>Severance pay is not pay for time worked. On dismissal it is paid as a separate payment, alongside pay and compensation for unused leave, so it does not replace pay earned.<\/p>\r\n<p>The question \"is severance pay deducted?\" usually comes up elsewhere: when a dismissal is found unlawful. The body hearing the labour dispute then awards average pay for the period of forced absence (<em>priverstin\u0117 pravaik\u0161ta<\/em>) from the dismissal date until the day the decision is carried out, but for no more than one year, together with pecuniary and non-pecuniary damage (DK Article 218(2)). If the employee is not reinstated, compensation is awarded on top (DK Article 218(4)).<\/p>\r\n<p>Two practical points follow. First, average pay runs until the day the decision is carried out, not the day it is made, so delaying payment of the award increases it (up to the one-year cap). Second, DK Article 218 does not say that severance pay already paid is deducted. In our practice, when calculating the amount due after such a decision, we deducted the severance pay already paid on dismissal. Agree the calculation with your lawyer and accountant before you pay.<\/p>\r\n<h2>How to start<\/h2>\r\n<p>Send us the employment contract, the pay system (if one has been approved) and a short description of the situation: what is late, what you want to change or what you want to set off. We will tell you what can be done without the employee's consent and what cannot, and prepare the documents needed.<\/p>\r\n<p>Phone +370 5 212 1506, email info@linden.lt<\/p>\r\n<p>More about this service: <a href=\"https:\/\/linden.lt\/en\/services\/labour-law\/other-consultations\/\">other labour law consultations<\/a>.<\/p>"}]},"_links":{"self":[{"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/irasas\/2097","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\/2097\/revisions"}],"wp:attachment":[{"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/media?parent=2097"}],"wp:term":[{"taxonomy":"kategorija","embeddable":true,"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/kategorija?post=2097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}