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As of November employers‘ liability for administrative offences to be tightened in Lithuania

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published on 8 November 2021 | reading time approx. 2 minutes

 

As of 1 November, the amendments to the Code of Administrative Offences of the Republic of Lithuania enter into force. The majority of the changes strengthens employers‘ liability for administrative offences.

  

Recent changes that strengthen employers' liability:

  

At the initiative of the State Labor Inspectorate, penalties have been tightened, noting a fact that in recent years the rate of violations reported above has been high enough. Moreover, the downward trend is not being expected. Within the year of 2019, in total 516 administrative offence protocols were drawn up for the breaches of occupational safety and health regulations. Similarly, a significant number of administrative offence reports were drawn up for the rest of the offences stated above.

 

Although an administrative notice is being treated as the predominant sanction, a solid number of reports drawn up in Lithuania refers to a situation that employers still do not comply with legal requirements. In this context, our legal experts would like to draw your attention towards relevant aspects related to the specific articles of the Code of Administrative Offences. Additionally, by seeking to stay compliant with legislation requirements, it is crucial to be familiar with respective actions to be taken. 

 

Violations of occupational safety and health regulations 

Overall, the violations of occupational safety and health regulations cover an extremely wide range of legal requirements. Commonly, such breaches deal with unassessed or incorrectly assessed occupational risk and they are closely related to an omission of taking certain preventive measures. The existing amount of administrative offence protocols refers to a fact that a number of employers still perceive the legal requirements of the occupational safety and health as an additional formality rather than a risk-reducing factor, creating additional value to business. In order to avoid inconveniences with the local State Labor Inspectorate, we advise to draw your attention towards the internal rules of procedure, focusing on occupational risks. Also, it is highly recommended to review and update internal documents and apply the requirements of such documents in day-to-day operations accordingly.

 

Violations of remuneration calculation procedure and salary payment

When it comes up to the violations of remuneration calculation procedure and salary payment, in general, this sort of breaches is less common (87 protocols were drawn up within 2019). However, a number of such violations is expected to increase in the future, mainly, due to a fact that legal persons will increasingly cooperate with natural persons on the basis of service contracts rather than on the ground of employment agreements. If the State Labor Inspectorate determines that a natural person is in cooperation with a legal entity on the basis of service contract, but the actual collaboration meets the requirements of labour relations, in such a case the legal entity has an obligation to pay employment-related taxes, calculated on amounts paid to natural person. In addition, an administrative liability also applies for such a legal entity. In order to avoid an application of sanctions, it is recommended for legal persons to revise all contracts, signed with natural persons and assess whether the contracts do not set up a relationship which can be equated to employment relationship.

 

Violations of working hours accounting

Remuneration calculation and payment requirements are closely related to the requirements on proper working time accounting. In general, a prevention of such violations is not challenging, and a number of issued administrative offence protocols and imposed sanctions indicate that violations are mostly unintentional. In spite of this, the State Labor Inspectorate in Lithuania believes that higher sanctions will help employers to be more attentive by minimizing undeclared work.

 

Omission of providing information to the local stat labor inspectorate (VDI)

Although the original draft law did not envisage an increase of penalties for the omission of information to the local State Labor Inspectorate on foreigners' arrival to Lithuania for temporary work, it is obvious that this sort of problem is quite common, especially in transport sector. In such cases, transport companies that own just a few vehicles, usually employ a high number of drivers and act as temporary employment agencies. Such an activity is prohibited by law. Therefore, it is important to carefully observe the requirements of laws every time a foreigner is employed. Moreover, before a signing of the employment contract, it is highly advisable to review and check all facts if a respective foreigner can be employed.

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