Lithuania changes business trip per diem rules

The biggest shift is that employers will no longer be able to unilaterally reduce per diems for shorter trips. If a company does not have a collective agreement, full government-set per diems must be paid on trips shorter than seven days. For trips lasting seven days or longer, per diems may be reduced, but only to at least 65% of the maximum rate.

Where a collective agreement exists, companies can still agree to lower rates, but only down to 50% of the government maximum. In all cases, the worker must be informed in writing before departure if a lower allowance will apply. Once a trip starts, the amount cannot be changed unless the route changes to another city or country.

The rules also tidy up how the first and last day of a trip are paid. If travel time on either day is under four hours, only 20% of the allowance will be due. One-day business trips within Lithuania will no longer trigger per diems at all, while foreign trips remain covered.

For employers, the immediate issue is operational, not theoretical. Lithuania’s labour inspectorate is urging companies to review travel policies, pay systems and other documents before Oct. 1. That creates a short compliance window and could lead to higher wage-related costs for firms that previously relied on flexible or reduced per diem practices.

For investors, the story is less about a market-moving shock than about a broader tightening of labor standards and cost visibility. Businesses with heavy travel exposure may see a modest increase in administrative burden and expense, but the bigger investment takeaway is that clearer rules usually reduce future disputes. Predictability is good for workers, and over time it is often good for companies that want cleaner payroll processes and fewer legal gray areas.