Lithuania
Changes regarding the QR code for legal work with children
Impact date: The new rules entered into force on 17 June 2025. Employers and organizations may also apply for QR codes on behalf of individuals on 1 August 2025. The deadline for employers to complete the first round of QR code checks for all existing staff, service providers, volunteers, or others engaged in child-related activities is 1 September 2025. Amendments to the Law on the Fundamentals of the Protection of the Rights of the Child, effective 17 June 2025, introduces mandatory QR codes for all persons engaged in work or other activities with children. The amendments also establish an explicit list of criminal offences that permanently or temporarily bar individuals from working with children.
The amendments to the law seek to strengthen child protection by introducing a uniform QR code system to verify eligibility for working with children and defining categories of offences that restrict access to such work. These include sexual offences, child exploitation, trafficking and forced labor, serious violent crimes, crimes against humanity and state security, organized crime and terrorism-related offences, as well as certain drug- and weapon-related crimes.
Employer implications/action needed Employers must:
- Ensure that all employees, volunteers, contractors, interns, and other persons engaged in child-related activities obtain a QR code
- Verify QR code validity for existing staff no later than 1 September 2025
- Re-check QR codes that were verified before 16 June 2025
- Verify QR codes of all new hires, volunteers, or service providers before they begin working with children
- From 1 August 2025, employers may also apply for QR codes on behalf of individuals
- Implement internal procedures for regular re-verification of QR codes
Employer risk Failure to comply with QR code verification obligations may result in administrative fines:
- From €300 to €500 for a first breach of employer duties
- From €500 to €1,000 for repeated breaches
If a prohibited person (convicted of specified crimes) is found working with children:
- Fine of €3,000 to €5,000
- From €5,000 to €6,000 for repeated breaches
Independent contractors providing services to children are also subject to fines of €300 to €500 for non-compliance, and €500 to €1,000 for repeated breaches
- Beyond financial penalties, employers face significant reputational risks and potential liability for negligence in safeguarding children
Reform of the Second Pillar Pension System
Impact date: The reform enters into force on 1 January 2026 and end of the two-year transitional opt-out period for current participants is 31 December 2027
Reform of the Second Pillar Pension System introduces a voluntary participation model, ends automatic enrolment, and provides participants with new options for contributions and withdrawals. The law was enacted on 26 June 2025.
The amendments seek to provide flexibility and strengthen individual choice in retirement planning by:
- Ending automatic enrolment
- Allowing voluntary participation in pension accumulation
- Giving all current participants a two-year window (2026–2027) to opt out entirely
- Introducing more flexible rules for contributions, suspensions, and partial withdrawals
Employer implications/action needed Employers must:
- Adjust payroll processes to reflect employees’ voluntary participation choices and any suspension of contributions
- Inform employees about the opt-out window and available options
- Provide clear communication to prevent misunderstandings, especially during the transitional period
- Ensure HR systems are updated to handle voluntary participation rather than automatic enrolment
Employer risk Failure to update payroll and HR systems may lead to incorrect deductions and employee claims. Lack of proper employee communication may create reputational risk and potential disputes. Although employer contribution rates are unchanged, mismanagement of processes could result in compliance errors.
Personal Income Tax Reform
Impact date: The main changes enter into force on 1 January 2026. Additional non-taxable income (NPD) and tax credits for parents enter into force on 1 January 2027
Personal Income Tax Reform increases tax progressivity, aligns the tax treatment of different types of income with certain exceptions, and introduces new exemptions and credits. The law was enacted on 26 June 2025.
The law aims to create a fairer tax system, reduce income inequality, and ensure more equal application of income tax across different types of income, while maintaining support measures for low- and middle-income earners.Introducing more flexible rules for contributions, suspensions, and partial withdrawals
Employer implications/action needed Employers must:
- Update payroll systems to reflect the new progressive rates:
- 20% for income up to 36 average monthly salaries (VDU) (~€6,900/month in 2026)
- 25% for income between 36–60 VDU (~€6,900–€11,500/month)
- 32% for income above 60 VDU
- Apply narrowed non-taxable income (NPD) correctly: only applicable to monthly salaries not exceeding €2,562.49
- Adjust treatment of health insurance benefits: up to €350 annually remains non-taxable, any excess treated as salary
- From 2027: apply additional NPD (€1,044) for employees with children, or tax credits (€208.8 per child annually) for those under individual activity
- Review HR communication policies to ensure employees understand the impact of the reform, especially high earners and those benefiting from NPD or employer-provided benefits
Employer risk Failure to implement the correct tax rates or exemptions may lead to payroll errors, employee claims, and penalties for non-compliance. Incorrect handling of health insurance benefits could result in additional tax liabilities. Lack of timely employee communication may also create reputational risks and disputes.
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