Introduction

As global mobility and remote work continue to shape modern business, employers are increasingly managing teams across borders. Two popular markets - Lithuania and the United States - offer strong talent pools but come with vastly different employment landscapes.

Whether you’re expanding, hiring remotely, or managing cross-border teams, understanding how labour laws differ is essential to staying compliant and building trust. From employment contracts to termination rules, this article breaks down the key differences between Lithuania and the US, so your business doesn’t stumble into costly pitfalls.

Quick Tips

• Always provide a written employment contract in Lithuania - it’s a legal requirement.

• 'At-will' employment in the US is not applicable in Lithuania - terminations require justification.

• Overtime, paid leave, and social contributions differ significantly - localise payroll accordingly.

• Use professional employer organisations (PEOs) or local legal counsel if unsure about compliance.

• Avoid assuming EU norms apply to US employees - the frameworks are fundamentally different.

Contracts: Formality vs Flexibility

In Lithuania, employment contracts must be in writing and include clear details: job description, remuneration, working hours, and duration. Fixed-term contracts are allowed but must follow specific rules and limitations set by the Labour Code.

By contrast, in the US, employment contracts are often informal or even verbal (outside of executive roles), and 'at-will' employment permits employers to terminate staff without cause, provided it’s not discriminatory. This level of flexibility can be attractive, but it also increases employee uncertainty and can create cultural clashes with European hires.

A McKinsey report notes that international businesses expanding into the EU often face legal exposure from using ‘US-style’ employment approaches. As a precaution, always localise contract templates - don’t copy and paste across regions.

Working Time and Leave: Regulated vs Discretionary

Lithuania follows EU directives closely. Employees work a maximum of 40 hours per week, with clear rules on rest periods and overtime. Paid annual leave is a minimum of 20 working days, and there’s paid parental leave, sick leave, and public holidays.

In the US, there are no federal requirements for paid leave, and working hours are less regulated. The Fair Labor Standards Act (FLSA) governs overtime pay, but vacation and sick leave are generally at the employer’s discretion. According to the OECD, the average American worker receives just 10 paid days off annually - significantly less than their Lithuanian counterparts.

For global employers, this has direct implications for equity and morale. Ensure that benefits packages are aligned with local standards - not doing so can be a red flag for regulators and a deal-breaker for top talent.

Termination and Redundancy: Structured vs Simple

One of the starkest contrasts is how terminations are handled. In Lithuania, dismissals require cause and adherence to strict procedures, including notice periods, documentation, and in some cases, severance pay. Redundancy processes involve employee consultation and legal thresholds.

The US offers more freedom, but also more risk if not managed correctly. While terminations can happen quickly, wrongful dismissal claims (especially for protected characteristics) are a major legal concern. Moreover, states differ - for example, California has stricter employee protections than Texas.

In my work with a US client hiring in Lithuania, we helped them understand the importance of documenting performance issues and following local disciplinary processes - it prevented a contested termination from escalating into litigation.

A Real Example: Building a Cross-Border Employment Framework

A global tech firm we supported had teams in both San Francisco and Vilnius. The US leaders were used to rapid hiring and lean documentation. We worked with them to develop a dual-framework system: structured employment processes for Lithuania, and compliant, streamlined practices for their US operations. By training local managers and aligning handbooks and contracts, we reduced legal exposure and improved employee confidence across both regions.

Final Thoughts

Lithuania and the US each offer great opportunities for businesses - but managing people in both demands thoughtful navigation. Labour laws are not just checklists - they reflect different cultural expectations around work, fairness, and risk.

Get it right, and you not only stay compliant but build a more resilient, trusted global workforce.

What’s next for your global people strategy?

Book a free compliance check-in or HR audit with ThinkGlobal HR. Whether you're onboarding in Vilnius or restructuring in California, our expert team will help you review contracts, stay compliant, and grow with confidence.