Employers, overhaul your remuneration and classification structures now
From 2027 employers in Lithuania will need a formal, transparent, and gender‑neutral remuneration system and to submit specified information on employees to “Sodra” on a monthly basis, in order to ensure employees’ right to fair remuneration.
Why were the changes made?
The amendments are based on the EU Transparency Directive with the goal to tackle persistent differences in pay between women and men, ensuring that equal work and work of equal value are remunerated fairly. By requiring employers to design an objective, gender neutral pay structure and to share data with authorities, the law enables systematic monitoring of pay gaps and corrective action where unjustified differences remain.
The Remuneration System: What You Must Have
Every employer, regardless of size, must approve a Remuneration System (RS).
RS must:
- be objective and gender‑neutral, with job descriptions and titles that do not reflect gender biases
- define job groups in the undertaking and the applicable forms of pay for each group or position
- set clear pay ranges (minimum, mid‑point and maximum) for each group or position, including rules for additional pay such as bonuses, allowances and premiums
- lay down transparent criteria and procedures for pay indexation and pay increases, where the undertaking has more than 50 employees.
| RS will be the core reference point for your internal pay decisions and for the data you report to “Sodra”. |
How to Prepare Now: Practical Steps
- To develop or update your RS, you should start with a structured preparation phase:
- Review and, where necessary, prepare job descriptions for all positions, clearly defining tasks and responsibilities.
- Assign every employee to a specific position, compile a full list of positions, and group them consistently.
- Define and document objective job evaluation criteria covering competencies, qualifications and other relevant aspects.
- Make sure all forms of remuneration are covered, not only base salary but also bonuses, allowances and premiums.
- These steps form the factual basis for a fair and defensible pay system.
Objective Criteria: Evaluating Jobs, Not People
The Labour Code sets out five mandatory criteria for assessing work of equal value: skills, qualifications, effort, responsibility and working conditions. In practice this means, for example:
- Skills – abilities, communication and work with people.
- Qualifications – education, training, certificates and licences.
- Effort – physical, mental and emotional resources required.
- Responsibility – for people, finances, information and assets.
- Working conditions – environment, intensity, risk and mental load.
You may add further criteria where relevant, such as replaceability of the position, problem solving demands, physical abilities, additional skills or psychosocial competencies. Importantly, all criteria must be applied without gender bias, and the focus must be on the job itself, not on the individual employee.
Job Evaluation and Pay Bands
Once your criteria are defined, you will need to carry out a job evaluation across the undertaking:
- allocate points to each position for each criterion and, where needed, weigh the criteria by importance (for example, on a scale from 1 to 5).
- calculate the total score for each position from all selected criteria.
- group positions into levels according to their total points and set appropriate pay bands (intervals) for each level.
- determine the width of each pay band as the percentage difference between the minimum and maximum pay in that group.
You should then review whether there are significant pay gaps within each group (for example, differences above 5 %) and whether they can be objectively explained; if not, you must plan how these gaps will be corrected. Clear rules are also needed for cases where an employee’s pay falls outside the band for their position.
After Evaluation: Formalizing the System
After completing the evaluation, employers must:
- approve an updated list of positions and levels together with the applicable pay bands and rules for bonuses, allowances and premiums.
| This formalized RS becomes a binding internal instrument that supports equal pay and provides transparency to employees. |
Monthly Duties from 2027: Data submission to “Sodra”
From 1 January 2027, employers will have new monthly reporting obligations to “Sodra”:
- Obligation to submit data on the employee’s monthly and additional monthly gross pay, as well as the monthly paid working time (in hours).
- duty to inform employees annually about their right to receive information on their own pay and the average pay (hourly and annual) by gender within the same job group, and how to exercise this right
Information on the employee’s working time norm, working time regime and assigned position group need to be submitted once and updated only when changes occur.
Using these data, “Sodra” will calculate average wages and detailed indicators on the gender pay gap, including base and additional pay such as bonuses. The results will be shared every month with employers, the State Labour Inspectorate and the Office of the Equal Opportunities Ombudsperson, and some of the information will be published. Employers must also inform employees annually about their right to receive information on their own pay and the average pay (hourly and annual) by gender within the same job group, and how to exercise this right
Many employers wonder:
- update existing job descriptions, how such updates should be designed in a legally robust way?
- which additional categories – for example functions, seniority levels or responsibility areas – should be introduced to reflect the reality of their workforce?
- how to group employees into meaningful categories without creating discrimination risks or inconsistencies?
- whether they are legally obliged to respond to all information requests from employees concerning their job description, classification and related employment conditions?
| Do you want to discuss which concrete steps are necessary in your company and how to implement them in practice? Contact us at any time – we will be happy to support you in analyzing your current situation, defining appropriate employee categories and updating job descriptions in a legally compliant way: migle.wantens@lynx.legal |