The Lithuanian Government has officially approved a legislative proposal aimed at strengthening social guarantees for thousands of workers who hold multiple part-time positions. The move, spearheaded by the Ministry of Social Security and Labour (SADM), targets a specific loophole in the current social insurance system that often leaves the country’s most vulnerable employees with insufficient social protection.
Under the proposed changes, employers of individuals working for two or more companies will be required to pay social insurance contributions based on a proportional share of the Minimum Monthly Wage (MMA), even if the employee’s actual monthly earnings at that specific workplace fall below that threshold. This ensures that the combined contributions across all employers meet the national “social insurance floor,” providing the worker with full access to state benefits such as pensions, sickness allowance, and maternity/paternity leave.
Proportional Contributions for Multiple Employers
The core of the reform lies in how the “social insurance floor” is calculated. Currently, if a worker earns less than the minimum wage at a single workplace, the employer is usually required to pay contributions as if they were paying the minimum wage. However, an exemption exists: if a person has multiple employers, each employer currently only pays contributions on the actual amount earned.
Social Security and Labour Minister Jūratė Zailskienė noted that this has led to instances of exploitation. “This would eliminate a loophole where employers avoid paying minimum social insurance contributions by taking advantage of a worker’s multi-employment status,” Zailskienė stated. By requiring each employer to pay a proportional share of the MMA, the government aims to ensure that every worker, regardless of how many contracts they hold, reaches the minimum threshold for social security coverage.
For example, if the Minimum Monthly Wage is €1,153 and a person has two employers, each employer would be obligated to pay contributions on at least €576.50 (half of the MMA). If a person has three employers, the obligation for each would be at least €384.33. The system is designed to be dynamic; if one employer pays significantly more than their proportional share, the excess is credited toward the obligations of the other employers to avoid over-taxation while maintaining the worker’s safety net.
Impact on the Labor Market
Data from the state social insurance fund, Sodra, indicates that this change will directly affect more than 8,000 employees. Interestingly, the demographic of those earning less than the minimum wage across multiple jobs is diverse.
While the largest group consists of service workers—including office and hotel cleaners and assistants (representing 24.4% of the affected group)—the data also reveals a significant number of professionals in this category. Approximately 23.6% of those affected are listed as managers or administrative heads, and nearly 10% are specialists in advertising, marketing, and sales.
Government officials suggest that in some professional sectors, the use of multiple small contracts for a single worker may be a deliberate strategy to reduce tax liabilities rather than a reflection of actual part-time labor needs. By closing this gap, the state hopes to discourage artificial contract splitting that deprives workers of long-term financial security.
Implementation and Exceptions
The legislation does include specific safeguards and exceptions. The proportional calculation will take into account the actual number of days worked. If an employee is on sick leave or starts a job mid-month, the employer’s proportional obligation is adjusted accordingly. Furthermore, a temporary exception is proposed for employers who hire participants of specific employment programs on fixed-term contracts, allowing them to continue paying contributions based only on actual wages for a limited period.
The bill now moves to the Seimas (the Lithuanian Parliament) for final deliberation and a vote. If passed, the new rules will represent a significant shift in how Lithuania manages the social security of the “gig” and fragmented labor economy, ensuring that the burden of social protection is shared fairly among all entities utilizing a worker’s labor.
Source: BNS
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