Is it possible to “Rent an Employee” in Lithuania?
Various agencies offering “rent of employees” have been present in Lithuania for a number of years. The status of those agencies was never clear in legal sense and in most of the cases its legal regulation was vague.
Since the EU Directive on Temporary Agency Work has been introduced, Lithuanian Parliament had the ongoing debate regarding its implementation in Lithuania. Therefore the Law on Temporary Agency Employment was introduced which is currently at familiarize stage and will come into force on 1st of December, 2011. So far laws did not precise the applicability of agency-employment scheme.
The EU Directive aims to ensure the protection and to improve the quality of temporary agency work, to determine their rights and duties of the principle of equal treatment and temporary work agencies as employers. These provisions also seek to create more working places in Lithuania and to development of flexible forms of work.
Temporary agency employment law defines the employment relationship between temporary workers and temporary employment enterprises, salaries for temporary staff during periods of unemployment between referral work, employment conditions of temporary agency relationships involved, obligation to ensure that temporary employees work in a safe and healthy working conditions as well as liability for damages etc.
It is important to note that the Agency willing to engage in such activity does not need a license or additional permission for it, only the number of temporary workers and start-up date ought to be presented to State Labor Inspectorate.
Employee may be rented even for a short period of 5 days, however he is entitled to the same salary as other employees at the same position, therefore the salary payment scheme is necessary. The calls and recalls must be presented in advance. Additionally to this, agency is held materially responsible for the employees. It is important to note that internal regulations also apply to the “rented” employees and the safety regulations in the company ought to be respected.
Administrative Code also provides penalties for a temporary employment agency law violation from 500 to 3 thousand litas (145- 869 EUR) and for the repeated infringement - from 3 thousand to 5 thousand litas (869-1449 EUR).
Valters Gencs
Tax Attorney & Founding Partner
Gencs Valters Law Firm, Riga
T: +371 67 24 00 90
Email: valters.gencs@gencs.eu