Important is not the contract, but what actually happens
So far, a business model where work is obtained, performed, and paid for not in the usual way but through a smart platform was considered self-employment, claiming that couriers or ride-hailing drivers are just “free entrepreneurs” or “independent partners.” But if that freedom remains only on paper, and in reality the app imposes fines, sets the price itself, and instructs how to perform the task, such a person can be considered an employee under the legal amendments, regardless of the contract signed.
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The draft amendment to the Labor Code lists three freedoms that a truly self-employed person must have:
- decides for themselves whether and when to work;
- can provide the same services to other companies;
- can negotiate the price and knows in advance what and for how much they are offered to perform.
If even one of these is missing or using it causes problems, for example, if a person stops receiving new orders for a while after rejecting a few, it will be considered regular work until the platform proves otherwise. At the same time, signs of subordination already established in the Labor Code will be evaluated – subordination to the employer means performing work functions when the employer has the right to control or manage the entire work process or part of it, and the employee obeys the employer’s instructions or workplace rules.
Recognizing the employment relationship, the platform will have to conclude an official employment contract with the person and ensure all legal guarantees: paid annual leave, sick pay, overtime pay, severance pay, and other guarantees due to the employee. The key shift is the transfer of the burden of proof. Until now, the employee had to prove that they were not self-employed, but once the draft comes into effect, the platform itself will have to prove that the person really works independently.
However, it is indicated that if a decision is made to reclassify legal relations as employment relations, fines provided for in the Republic of Lithuania Employment Act would not be applied for a year after the law comes into force, i.e., until December 2, 2027, which reduces the incentive for companies to comply immediately.
The algorithm will have to “introduce itself” and explain its decisions
Another important change relates to situations where employees are monitored, evaluated, and assigned tasks not by a person but by a program. Platforms will have to explain in writing and in simple language what systems are used, what data they collect, and what determines their decisions. A person must receive brief information no later than the first working day and detailed information at any time upon request.
The law also draws strict red lines to protect employee privacy. It will be strictly prohibited to collect the following data:
- data about the employee’s emotional or psychological state;
- private conversations;
- any information or location when the person is not working;
- data about health, political views, religion, or sexual orientation;
- biometric data for identity verification, which means that the current practice where the app requires a selfie for facial recognition will have to be fundamentally reviewed.
A long-awaited right to receive an explanation is also planned. If an account is blocked or payment for work is refused, the platform must provide the reasons in writing, and upon request to review the decision – respond within two weeks. Most importantly, such decisions must be made or reviewed by a live person, not a robot. In urgent security cases, the responsible person must review the automatic blocking within 24 hours.
A change that will quietly affect thousands of other Lithuanian employees
The biggest and least known intrigue of this draft to the public is that it is aimed far beyond just “Bolt” or “Wolt” couriers. Lithuania has chosen to take one step further than required by the EU directive. It is proposed to supplement the Labor Code article on employee privacy so that algorithmic management rules apply to every employer in the country using automated systems. For employees, this will guarantee the right to know how automated systems evaluate them, and for employers, it will become a serious reason to review the technologies used now.
What next?Currently, the draft law has passed the initial coordination stages. Although the final version may still change slightly, the political direction remains clear: decisions that directly affect a person’s income and workplace can no longer be made solely by an invisible program.
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