Background information

Law No. XIII-2821 amending Articles 47 and 49 of the Labour Code (LC), effective as of 17 March 2020, introduced new conditions for companies to declare idle time. Pursuant to Article 47 of the LC, the employer may declare idle time for an employee or a group of employees, inter alia, if the Government declares quarantine and for this reason the employer is not able provide the employee with the work agreed upon in the employment contract. On 17 March 2020, the Seimas adopted Law No XIII-2822 adding Article 5-1 and amending Articles 24, 25, 35, 37, 41, 42 and 44 of the Law on Employment of the Republic of Lithuania (No XII-2470), which provides for the payment of wage subsidies to employers who retain jobs during idle time established as a result of quarantine. The idea is to help employers retain jobs. On 7 April 2020, the Law No XIII-2845 amending Articles 5-1, 13, 24, 35, 37, 38, 39, 41, 42, 44, 49 and 50 of Law No. XIII-2470 was adopted and new subsidy amounts were approved.

Content of measure

When the government declares a state of emergency and quarantine and for this reason the employer is not able to provide employees with the work agreed upon in the employment contract, the employer has the right to establish idle time or partial idle time. According to the amendments to the Law, the amount of the subsidy may reach 90% or 70% of the wage amount subject to the employer's choice. If the employer contributes 10% and chooses a 90% subsidy, the state will contribute max. one minimum monthly wage (MMW) (€607 gross); if the employer chooses a 70% subsidy, the state will be able to contribute more - 1.5 MMW or €910.5 gross. Wages accrued during idle time may not exceed those fixed earlier in the employment contract.

Payment of the subsidy shall be terminated when the government revokes the emergency or quarantine. Employers shall have to inform the State Labour Inspectorate on the establishment of idle time for employees. Having used the subsidy, the employer is required to retain at least 50% of jobs for at least three months from the end of the payment of the subsidy.

Use of measure

According to the Ministry of Social Security and Labour (MSSL), by 7 July 2020, around 23,600 employers received wage subsidies in Lithuania. The support provided to employers constituted €123.9 million. By 24 September 2020, around 24,159 employers have received wage subsidies in Lithuania; the subsidies were granted for 201,449 employees that were put to downtime. An overall budget for the measure amounts to €250 million. On 31 July 2020, around 56% (or €140.7 million) of the budget has been used. According to the data provided by the MSSL, a total of 24,362 employers have applied for subsidy to the PES by 9 December 2020, i.e. around 28% of the total number of employers. Until 9 December 2020, the subsidies were requested for 206,432 employees that were put to downtime (or around 23% of total employees in the private sector). The total amount paid down in wage subsidies for employees put to downtime amounted to €171.5 million on 9 December 2020.According to the data provided by the MSSL, on 28 March 2021: a total of 30,612 employers have applied for subsidy to the PES (30,444 employers were granted the subsidies); the subsidies were requested for 349,091 employees that were put to downtime (346,551 employees were granted the subsidies); the total amount paid down in wage subsidies for employees put to downtime amounted to €321.6 million.

Target groups

Workers	Businesses	Citizens
Applies to all workers	Does not apply to businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Social partners jointly Company / Companies Public employment service	Companies European Funds National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Informed	Informed
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Unknown

Involvement

Social partners were informed, the tripartite meeting was not held. Both trade union and employer representatives emphasised their efforts to participate, from the outset, in all possible formats addressing the consequences of COVID-19 for both business and the economy as a whole. However, according to social partners, there was little dialogue in the initial process of developing the measure. Such a situation was determined by the fact that measures had to be adopted very quickly.

Views and reactions

As for the subsidy process itself, it was first largely criticised by employers’ representatives (that it was slow, etc.). However, when the scheme was already fully operational, employers’ representatives noted that they were satisfied with the implementation of the scheme. According to employer organisations, the procedure and process for applying for downtime subsidies is not complicated. Money is transferred to the account within a period from two working days to one month after submission of documents regarding downtime. Social partners believe that the measure has proved effective in protecting jobs. According to the President of the Lithuanian Business Confederation (LBC), downtime subsidies can be considered the second most successful and most frequently used measure by employers to reduce the economic and social consequences of the COVID-19 pandemic in Lithuania.

Sources

• 17 March 2020: Lietuvos Respublikos darbo kodekso 47 ir 49 straipsnių pakeitimo įstatymas Nr. XIII-2821 (2020-03-17 (e-seimas.lrs.lt)
• 17 March 2020: Law No XIII-2822 adding Article 5-1 and amending Articles 24, 25, 35, 37, 41, 42 and 44 of the Law on Employment of the Republic of Lithuania (Lietuvos Respublikos užimtumo įstatymo Nr. XII-2470 papildymo 5-1 straipsniu ir 24, 25, 35, 37, 41, 42, 44 straipsnių pakeitimo įstatymas (www.e-tar.lt)
• 31 March 2020: Law No XIII-2832 amending Article 47 of the LC (Lietuvos Respublikos darbo kodekso 47 straipsnio pakeitimo įstatymas) (www.e-tar.lt)
• 07 April 2020: Law amending Articles 5-1, 13, 24, 35, 37, 38, 39, 41, 42, 44, 49 and 50 of Law on Employment of the Republic of Lithuania (LR užimtumo įstatymo Nr. XII-2470 5-1, 13, 24, 35, 37, 38, 39, 41, 42, 44, 49 ir 50 straipsnių pakeitimo įstatymas) (e-seimas.lrs.lt)
• 04 June 2020: Law No XIII-3005 amending Articles 25, 41, 42, 44 and 48-1 of the Law on Employment of the Republic of Lithuania (Lietuvos Respublikos užimtumo įstatymo Nr. XII-2470 25, 41, 42, 44 ir 48-1 straipsnių pakeitimo įstatymas (www.e-tar.lt)
• 04 June 2020: Law No XIII-3008 amending Articles 47 and 49 of the LC (Lietuvos Respublikos darbo kodekso 47 ir 49 straipsnių pakeitimo įstatymas (www.e-tar.lt)
• 23 December 2020: Law No XIV-131 amending Articles 38, 41, 42 and 48-1 of the Law on Employment of the Republic of Lithuania (Užimtumo įstatymo Nr. XII-2470 38, 41, 42 ir 48-1 straipsnių pakeitimo įstatymas) (www.e-tar.lt)
• 27 May 2021: Law No XIV-351 amending Articles 5-1, 25, 35, 41, 42, 43, and 48-1 of Law No XII-2470 on Employment of the Republic of Lithuania (www.e-tar.lt)