Temporary Agency Work: Tips And Pitfalls

• Published date: 29 September 2022
• Subject Matter: Employment and HR, Health & Safety, Employee Benefits & Compensation
• Law Firm: lus Laboris
• Author: Ms Eglė Gliaudelytė (Associate / Lithuania) and Jolanta Raudonytė (Associate / Lithuania)

In Lithuania, as in other countries, using employee leasing or temporary agency workers provides welcome flexibility for employers, especially when workload is unpredictable. However, it's important to understand the legal requirements and restrictions on this type of work

'Employee leasing', also described as 'temporary agency employment', can provide flexibility for organisations, especially where workloads and staffing needs vary. It can also help save costs on recruitment and employment, human resources management, and payroll accounting costs.

With remote work opportunities growing, the demand for temporary agency workers is also on the rise. A foreign company looking to recruit from Lithuania does not need to relocate its operations or register in Lithuania for tax purposes, as employees can be employed through a temporary work agency.

However, there are numerous instances when the selected model of operations has temporary agency work characteristics but is not considered temporary agency work.

For instance, organisations often enter into a service agreement under which they agree on the assignment of a specific employee to work for a client, the place and hours of work, the nature of work, and remuneration.

Some groups also have intra-group employee sharing arrangements in place. An employee is employed by one company but carries out work for several companies within the group, so the employee is ensured sufficient work. Sometimes an employee of one organisation works for another which has the equipment and supplies needed to perform the work.

In other cases, a foreign national is employed by a company to which simplified conditions for employment of foreign workers are applied, although the employee performs his/her job functions for another employer.

However, not everyone is aware that practical solutions such as these must comply with specific legislative requirements. For example, if you are not on the official list of temporary work agencies, you are not eligible to engage in temporary agency employment activities. If you do, the head of your organisation may incur administrative liability for engaging in illegal commercial activities.

Added to this, you will not only be liable to pay a fine but could also have any products manufactured while engaging in this activity and income generated from this activity confiscated.

Where an employee works for a company other than by which he/she was employed, or where the rules for employment of foreign...