Illegal Work

Following the repeal of the Labour Code of the Republic of Lithuania[1] (hereinafter – the 2002 LC) on 30 June 2017, the concept of illegal work is defined in the Republic of Lithuania Law on Employment[2] that entered into force on 1 July 2017. The provisions of this law expand the concept of illegal work and provide for liability for illegal and undeclared work, undeclared independent activities and violations of the procedure for the employment of foreigners, i.e.:

     The Law on Employment gives the institution carrying out control of illegal work the right not only to impose an administrative penalty in the form of a fine, but also to impose an obligation, i.e. to oblige the employer:

-                             to conclude an employment contract with the employee in writing and notify the territorial office of the State Social Insurance Fund Board about the conclusion of the employment contract and the hiring of the employee, and to pay the person who worked illegally the agreed salary for the work if it was established that the employer did not perform this duty in the prescribed manner;

-                             to terminate the employment relationship with the illegal employee within three working days of the decision being adopted and pay the employee the agreed salary if it was established that work is being performed by a third-country national who was not hired in accordance with the procedure established by regulatory acts. Information about the person who worked or is working illegally to the Migration Department.

                      The provisions of Article 121 of the Law on the State Labour Inspectorate of the Republic of Lithuania and Article 981 of the 2002 LC related to Directive 2009/52/EC of the European Parliament and of the Council of 18 June 2009 providing for minimum standards on sanctions and measures against employers of illegally staying third-country nationals (OJ 2009 L 168, p 24) were moved to the Law on Employment.

The Law on Employment provides that if an employer who has illegally hired a third-country national for a particular job is a subcontractor, the employer’s direct contractor bears subsidiary responsibility for fulfilling monetary obligations, with the exception of cases where the contractor requested in writing that the subcontractor present employment documents for the third-country national and took measures to verify them. If the contractor or other subcontractors were aware of the fact that the employer hired a third-country national illegally, then they also bear subsidiary responsibility for fulfilling the above-mentioned monetary obligations. Subsidiary responsibility born by the contractor or other subcontractors means that both the institution carrying out control of illegal work, undeclared work and undeclared individual activities and the illegally employed third-country national have the right to redirect their monetary claim to them within three months of the day that the fulfilment period for their monetary claim against the employer expires if the employer did not fulfil their monetary claim or only fulfilled it in part.

A contractor may be fined EUR 868–2,896 for each illegally employed third-country national, with the exception of cases where the contractor requested in writing that the subcontractor present employment documents for the third-country nationals and took measures to verify them. Repeat violations committed by a contractor who was already penalised for the same deed within the past two years result in the contractor being fined EUR 2,896–5,792 for each illegally employed third-country national.

                      In implementing the provisions of European Union legislation[3], Article 621[4] was added to the Law of the Republic of Lithuania on the Legal Status of Aliens on 14 March 2017; this article provides for a new function for the State Labour Inspectorate of the Republic of Lithuania: to make sure that while their seasonal employment permit is valid, foreign nationals are given appropriate living conditions (a foreign national who intends to take a seasonal job in the Republic of Lithuania can be issued a permit if the foreign national has a place to live that is registered with the Real Property Register of the Republic of Lithuania (with at least seven square metres of floor area for each adult who has declared residence therein) which they either own in the Republic of Lithuania or are using on the basis of lease or loan (with the relevant contract concluded for a period at least as long as the employment permit is valid), or if they present confirmation that a natural or legal person has pledged to provide them a suitable place to live for the duration of the validity of the employment permit). When the employer provides accommodation for a foreign national or acts as a go-between in finding it the rent fee for the premises cannot be more than 30 per cent of the foreign national’s salary after deducting taxes and state social insurance contributions, and cannot be automatically deducted from the foreign national’s salary.

                      When the 2016 LC entered into force 1 July 2017, the Republic of Lithuania Law on Guarantees for Posted Workers No X-199 became void, with all of its amendments and supplements. As of 1 July 2017, the provisions of the Republic of Lithuania Law on Guarantees for Posted Workers are regulated by the provisions of the 2016 LC (Articles 107–109) and the Law on the State Labour Inspectorate of the Republic Of Lithuania (Articles 121–125).