Employment law compliance for Lithuania companies

A Vilnius-based logistics company opens a Polish branch, hires five drivers locally, and seconds two Lithuanian managers to Warsaw. Six months later, it receives a labour inspection notice from the Państwowa Inspekcja Pracy (National Labour Inspectorate, PIP) citing three separate violations – none of which the company's HR team had anticipated. The fine is manageable. The reputational exposure and the corrective timeline are not.

Lithuanian companies operating in Poland must comply with Polish employment law from the first day a worker performs services on Polish territory. This means registering posted workers with PIP within 30 days of deployment, applying Polish minimum wage rules, and maintaining Polish-language documentation for any employee based in Poland. Failure to meet these obligations triggers personal liability of directors, administrative fines of up to PLN 30,000 per violation, and – in repeat cases – disqualification from public procurement.

This guide walks through the compliance framework step by step. It covers registration and documentation requirements, the rules that differ most from Lithuanian law, common structural mistakes, and a three-scenario decision matrix tailored to the Lithuanian market entry context. Each section identifies at least one concrete deadline or threshold so your team can self-assess before the next PIP visit.

How does Polish employment law apply to Lithuanian companies?

Polish employment law applies on a territorial basis. Any worker – Lithuanian national or otherwise – who regularly performs work in Poland falls under the Kodeks pracy (Labour Code, KP). This is true regardless of which law governs the underlying employment contract. A Lithuanian contract does not shield an employer from PIP enforcement once the worker is present in Poland on a regular basis.

Three legal frameworks interact here. First, the Ustawa o delegowaniu pracowników (Posted Workers Act, UoDP), which implements EU Directive 2018/957, applies when a Lithuanian company temporarily seconds its own employees to Poland. Second, the Labour Code applies in full to any worker hired directly in Poland under a Polish employment contract. Third, EU free-movement rules allow Lithuanian nationals to work in Poland without a work permit Poland, but non-EU nationals employed by a Lithuanian company and posted to Poland need separate authorisation.

The National Labour Inspectorate (PIP), the Zakład Ubezpieczeń Społecznych (Social Insurance Institution, ZUS), and the Urząd Skarbowy (Tax Office) each have independent inspection powers. All three may audit simultaneously. Lithuanian companies registered with the Krajowy Rejestr Sądowy (National Court Register, KRS) as a branch or subsidiary face the same obligations as domestic employers – but companies operating without a registered presence are not exempt. PIP jurisdiction follows the work, not the employer's address.

One practical point deserves emphasis. The territorial scope of Polish employment law is not limited to formal employment contracts. Civil-law contracts – umowa zlecenia (mandate contract) or umowa o dzieło (specific-task contract) – are subject to reclassification if the actual working arrangement resembles employment. PIP inspectors have had expanded reclassification powers since 2024. For more on that risk, see our analysis of B2B reclassification risk and PIP enforcement powers 2026.

What are the key registration and documentation obligations?

Registration comes first. A Lithuanian company posting workers to Poland must notify PIP before or on the first day of posting – in practice, the deadline is the start of the assignment. The notification is submitted electronically via PIP's online portal and must include the employer's details, the worker's data, the expected duration, and the address of the Polish work site. Assignments exceeding 12 months (extendable to 18 months in justified cases) trigger enhanced host-country obligations under the Posted Workers Act.

For workers hired directly in Poland, the employer must register them with ZUS within 7 days of the employment contract start date. This registration covers health insurance, pension contributions, and accident insurance. The combined employer social security burden in Poland runs at approximately 20.5% of gross salary. Lithuanian employers unfamiliar with ZUS contribution schedules regularly underestimate payroll costs by 15–20% in their initial budgets.

Documentation requirements include:

Written employment contract in Polish (or bilingual) before the first day of work
Payslips in Polish, showing gross pay, deductions, and net pay
Working time records covering daily and weekly hours
Health and safety training certificates specific to the Polish workplace
A personal file (akta osobowe) maintained in Poland for each employee

Polish minimum wage applies in full to posted and locally hired workers alike. From 1 January 2026, the statutory minimum is PLN 4,666 gross per month (or PLN 30.50 per hour). Lithuanian companies that continue paying Lithuanian minimum wage rates to workers based in Poland are in breach from day one. The shortfall is treated as unpaid wages and may be recovered by the worker for up to three years retrospectively.

We secured full compliance clearance for a Lithuanian IT services company expanding into Mazowieckie (autumn 2025), restructuring its posted-worker documentation and ZUS registration for 12 contractors within a 14-day window ahead of a scheduled PIP audit.

How do posted worker rules differ from standard employment in Poland?

The distinction between posting and local employment is not always obvious on the ground. Polish law defines a posted worker as someone who normally works in another country but is temporarily sent to Poland by their employer. "Temporarily" is the operative word. PIP and courts apply a substance-over-form test: if the worker has been in Poland for more than 12 months, or if the posting is part of a pattern of rolling assignments designed to avoid local employment rules, the worker may be reclassified as a Polish employee.

During the posting period, the employer must guarantee the worker at least the Polish mandatory terms. These include minimum wage, maximum working time (48 hours per week including overtime), minimum rest periods (11 hours daily, 35 hours weekly), paid annual leave (20 or 26 days depending on seniority), and health and safety standards under Polish law. The Lithuanian employment contract remains valid, but it must be supplemented – not replaced – by these Polish floors.

Social security treatment depends on whether the worker holds a valid A1 certificate issued by the Lithuanian social security authority (Sodra). With an A1 certificate, the worker remains in the Lithuanian social security system and no ZUS contributions are due in Poland. Without it, the employer faces double contributions in both jurisdictions – a cost that can exceed PLN 2,000 per worker per month. For a detailed treatment of A1 certificate procedures, see our guide on posted workers from Spain to Poland and A1 certificates – the procedural framework is identical for Lithuanian postings.

Non-EU nationals employed by Lithuanian companies present a separate compliance layer. A Ukrainian or Belarusian employee on a Lithuanian work permit cannot simply be redeployed to Poland. A Polish work permit Poland or an EU Blue Card (for high-salary positions above EUR 10,777 annually) must be obtained before the assignment begins. Processing time at the Urząd Wojewódzki (Regional Governor's Office) currently runs 30–90 days depending on the region.

For Lithuanian groups deciding whether to enter Poland through a branch or a subsidiary – a choice that directly affects the employment compliance structure – see our comparison at branch vs. subsidiary in Poland for Lithuanian groups.

To receive an expert assessment of your posted-worker compliance posture, contact info@kordeckipartners.com.

What are the most common compliance mistakes Lithuanian companies make?

The first mistake is treating the posting as purely a Lithuanian HR matter. Once a worker is in Poland, Polish law governs working conditions regardless of what the Lithuanian contract says. Lithuanian HR teams that apply Lithuanian holiday entitlement (28 days) rather than the Polish statutory minimum (20 or 26 days) create a liability that compounds monthly. The worker can claim the difference for up to three years.

The second mistake is failing to register with PIP on time. Late or missing posting notifications attract fines of up to PLN 30,000 per inspection. More damaging: a missing notification is itself evidence of bad faith, which PIP inspectors use to justify deeper audits covering wage records, working time, and health and safety. One procedural omission can open the door to a full compliance review.

The third mistake – and the most expensive – involves non-EU employees. Lithuanian companies in logistics, construction, and manufacturing frequently employ Ukrainian nationals. When those workers are redeployed to Poland without a Polish work permit, the employer faces fines of PLN 10,000–30,000 per worker, plus the worker's immediate removal from the worksite. Project delays caused by a sudden loss of key personnel can far exceed the fine itself.

Three business scenarios illustrate the decision matrix:

Manufacturing client: Posting 10 workers for 6 months – obtain A1 certificates, notify PIP on day one, apply Polish minimum wage. Budget PLN 4,666/month per worker as the floor.
IT services client: Hiring 3 developers locally in Warsaw – full Labour Code applies, ZUS registration within 7 days, Polish contracts required, consider EU Blue Card for non-EU specialists.
Foreign investor (Lithuanian holding): Establishing a Polish subsidiary – employment contracts governed by Polish law from day one, no posting rules apply, whistleblower Poland internal reporting channel required once headcount exceeds 50.

The whistleblower obligation deserves a separate note. Poland's Ustawa o ochronie sygnalistów (Whistleblowers Protection Act) requires employers with 50 or more workers to establish an internal reporting channel by 25 September 2024. Lithuanian companies that have grown their Polish headcount past this threshold without implementing a channel face fines of up to PLN 1.5 million. This is a compliance gap we identify in almost every Lithuanian client audit.

We obtained a full administrative clearance for a Lithuanian construction company in Lower Silesia (spring 2025), resolving outstanding PIP findings on working-time records and non-EU worker permits for 8 employees within a 30-day corrective period.

What should Lithuanian employers prepare before the first PIP inspection?

PIP inspections may be announced or unannounced. In either case, the employer has no right to delay access. Inspectors can request documents on the spot and interview workers individually. Being unprepared does not reduce liability – it increases it, because gaps in documentation are presumed to indicate violations.

The following checklist covers the minimum documentation set:

PIP posting notifications for all seconded workers, with confirmation receipts
A1 certificates for all posted workers (or ZUS registration evidence if no A1)
Polish-language employment contracts or bilingual equivalents for locally hired staff
Payroll records showing compliance with Polish minimum wage from each worker's start date
Working time logs covering the previous 3 years (the statutory retention period)

Beyond documents, Lithuanian employers should designate a Polish-speaking contact person for PIP correspondence. Inspectors communicate exclusively in Polish. Delays caused by translation are not treated as excusable. Designating an employment lawyer Warsaw-based as the point of contact is standard practice for companies without a Polish HR function.

Prepare for ZUS cross-checks as well. ZUS has real-time access to PIP inspection outcomes. A PIP finding of undeclared employment automatically triggers a ZUS audit for unpaid contributions, which can extend back three to five years. The combined financial exposure from a single PIP visit – fines, back contributions, and interest – can reach six figures in PLN for a mid-sized deployment.

Finally, review your civil-law contracts. Any contractor who works exclusively for your company, follows a fixed schedule, and uses your equipment is at risk of reclassification as an employee. PIP has reclassified B2B arrangements in the logistics and IT sectors with increasing frequency since 2024. Reclassification is retroactive and irreversible once confirmed by a court – it forfeits the employer's ability to recover overpaid contractor fees and triggers back social contributions for the full period.

For a tailored compliance strategy covering your specific Polish operations, reach out to info@kordeckipartners.com.

Frequently asked questions

Q: Does a Lithuanian company need a Polish entity to hire workers in Poland?

A: No. A Lithuanian company can employ workers directly in Poland without establishing a Polish branch or subsidiary. However, it must register as an employer with ZUS and obtain a Polish tax identification number (NIP) before the first payroll. Operating without these registrations exposes the company to fines and back-payment obligations. Establishing a Polish entity simplifies compliance but is not a legal prerequisite for employment.

Q: How long does it take to obtain a work permit for a non-EU national posted from Lithuania to Poland?

A: Processing times at the Regional Governor's Office currently range from 30 to 90 days depending on the voivodeship and the permit type. The Warsaw region (Mazowieckie) typically runs 60–75 days for standard work permits. An EU Blue Card for highly qualified workers follows the same administrative path but requires the employer to demonstrate that the gross annual salary exceeds EUR 10,777. Applications must be submitted before the worker enters Poland for work purposes – retroactive permits are not available.

Q: Is it true that Lithuanian employees in Poland keep their Lithuanian employment contracts?

A: Yes, but only partially. A Lithuanian employment contract remains valid and governs matters not covered by Polish mandatory rules. However, Polish law applies automatically to working conditions including minimum wage, working time limits, rest periods, annual leave, and health and safety. The Lithuanian contract cannot waive these protections. In practice, employers should prepare a Polish-law addendum to the Lithuanian contract for each posting, specifying the Polish mandatory terms that apply during the assignment. Failure to document this creates ambiguity that PIP resolves against the employer.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to employment compliance, cross-border workforce deployment, and labour inspectorate proceedings. We work with Polish entrepreneurs, foreign investors, and in-house legal teams – including a dedicated practice for Lithuanian and Baltic companies entering the Polish market. To discuss your situation, contact info@kordeckipartners.com.