26 July 2019 the amendment of Law on Occupation of the Republic of Lithuania (hereinafter – Law on Occupation) came into force. The changes adopted establishes the obligation of the employers until the end of the working day to include into accounting documents of the Company the following:
· overtime worked by the employee;
· the time employee has worked during public holiday or day off if it was not established according to the working schedule;
· the time employee has worked during the night.
It is important to pay attention to the time criteria established in the Law on Occupation – the fixation shall be done until the end of the working day at the Company. Such provision in principle imposes an obligation on the employers to establish an internal system, which would provide the opportunity for the employee to record overtime worked by him/her in cases when the working day of persons responsible for recording working time ends earlier than employee’s, who was working overtime on that particular day.
Such changes of the provisions of Law on Occupation are presumably related to the ruling of the European Court of Justice in case no. C-55/18, which imposes an obligation of the employers to keep track of the daily working hours of all employees by introducing an appropriate control system. (please see our previous message on /ltu//court-of-justice-of-the-european-union-it-is-obligatory-to-track-working-time-of-all-employees)
It is important to note, that according to the provisions of the Labor code of the Republic of Lithuania (hereinafter – Labor code), overtime might be appointed according to the request of the employer with the consent of the employee. Therefore, the situations where an employee works overtime “voluntarily” not only do not eliminate the employer’s duty to comply with the above-mentioned rules regarding the recording of the working time, but are also not possible in the context of the Labor Code. The employer must either properly record and pay for the overtime worked by the employee or take appropriate means to ensure that the employee performs the job functions within the working hours established.
Moreover, the Law on Occupation foresees the possibility of receiving a monetary penalty imposed by the State Labor Inspectorate for non-compliance or improper fulfillment of the above-mentioned obligation. In this context it should be noted that if the Company is fined for violations of the Law on Occupation by the State Labor Inspectorate, it is considered that such Company does not meet the minimum criteria for being a reliable taxpayer and can be included in the list of unreliable taxpayers.
We kindly remind you, that Leinonen team consists of Legal and Tax Advisors and Accounting Specialists. We are specialists having many years of experience in payroll accounting, tax and legal issues; therefore, we can assist you in preparing the necessary documents and provide the comprehensive consultations on your payroll, working time records or labor law issues.
Information above was prepared by Leinonen Lithuania Legal Team.