How much does your colleague earn? The era of secret salaries in Lithuania is coming to an end

How much does your coworker at the next desk earn? In Lithuania, this question is still often considered impolite, and salary figures are a closely guarded secret. However, the situation is about to change dramatically.

The European Union has adopted the Transparent Pay Directive (Directive 2023/970), which will lay all the cards on the table and require employers to pay equal pay for equal work. This will apply not only to comparisons between men’s and women’s pay, but also to the pay of colleagues of the same gender performing the same duties. Although the new regulations will not take full effect until 2027, legal experts warn that businesses need to start preparing now.

Salaries Will No Longer Be a Secret

By December 31, 2026, all employers, regardless of company size, will be required to establish a clear and objective salary payment system. Starting January 1, 2027, companies will be required to report to Sodra (the State Social Insurance Fund) not only their employees’ salaries but also their working hours on a monthly basis.

Employees will be given a powerful tool—the right to request, in writing, and to find out the average salary of their peers at the same level, broken down by gender. Employers will be required to inform their employees of this right every year.

The requirements for larger companies will be even stricter:

• More than 20 employees: Such companies will be required to share anonymized salary statistics with employee representatives (such as a works council) at least once a year.
• Companies with more than 100 employees: These companies will be required to correct unjustified pay disparities within six months. If the disparity is 5 percent or more, they will have to conduct a comprehensive pay review.

How will your work be evaluated?

From now on, job responsibilities will be grouped according to clear criteria: an employee’s skills (such as communication or conflict resolution), qualifications, responsibilities, working conditions, and even the physical or emotional stress experienced. The rule is very simple: if two people can easily swap jobs without significant cost to the company, they are considered to be performing the same work.

What should be done if employees’ salaries already differ? Will they have to be equalized?

It’s only natural that employee salaries vary in many companies today. Does this mean that once the new regulations take effect, salaries will have to be standardized without exception? Not exactly. Salary differences are not considered unlawful in and of themselves, but companies are required to assess the current situation.

If it turns out that people performing the same work are paid differently, the employer must justify this difference based on objective, gender-neutral criteria—for example, greater competence, professional experience, or better work performance. Transparency will also be required when awarding bonuses or allowances.
(This exception applies only to small businesses: companies with up to 50 employees will not be required to formally document their procedures for raising salaries.)

If there are no valid reasons for the wage disparities, the employer will have to develop a corrective action plan and rectify the inequality. As mentioned earlier, companies with more than 100 employees will be required to eliminate unjustified pay disparities within 6 months.

Fines and Compensation for Violations

Companies that attempt to ignore the new rules face serious financial consequences. Fines for failure to provide information will range from 460 to 1,400 euros, and fines for intentionally incorrect salary calculations could reach as high as 6,000 euros.

If an employee finds out that they were paid less than a colleague for the same work, they will be able to claim compensation. This will include unpaid wages, bonuses, non-pecuniary damages, lost opportunities, and even other benefits (such as supplemental health insurance). The company may also have to pay late payment interest and penalties.

Lawyers at the “Leagus” law firm warn that preparing for these changes will take time, so businesses should begin immediately to assess existing pay gaps, review compensation systems, and update job descriptions.