Ellex experts contribute to the Global Employer Handbook

Employment law experts from Ellex in Estonia, Latvia and Lithuania have contributed to the 2026 country chapters of the Employment Law Alliance’s (ELA) Global Employer Handbook, providing practical insights into employment law in the Baltics.

Covering more than 100 countries and over 170 jurisdictions, the handbook helps international employers understand local employment requirements. Although the Baltic States share many employment law principles, important differences remain in recruitment, termination of employment and non-compete agreements.

Below are some key considerations for employers operating in Estonia, Latvia and Lithuania.

Estonia: termination of employment and non-compete restrictions

In Estonia, employers must have a legally justified reason for terminating an employment contract. In the case of redundancy, employees are entitled to severance compensation equivalent to one month’s average salary, regardless of their length of service. Statutory notice periods for employer-initiated termination generally range from 15 to 90 calendar days, depending on the employee’s length of service.

Post-termination non-compete agreements must protect the employer’s legitimate economic interests and may remain in force for no longer than one year. Such agreements must be concluded in writing and require reasonable monthly compensation. Employers also cannot prevent employees from disclosing their own salaries.

Latvia: recruitment requirements and non-compete agreements

In Latvia, job advertisements must indicate the envisaged range of gross monthly or yearly salary, or the hourly salary rate. Employment contracts must be concluded in writing before work begins, while equal treatment and anti-discrimination requirements apply throughout recruitment.

Post-termination non-compete agreements may last for up to two years, provided they protect the employer’s business interests and concern the field of activity in which the employee worked. The agreement must specify the restriction’s scope, duration and geographical coverage, alongside proportionate monthly compensation.

Lithuania: pay transparency and employee rights

In Lithuania, job advertisements must specify the proposed base salary or salary range. Employers are also prohibited from asking applicants about their current or previous remuneration. Employees may disclose their own remuneration to protect their right to equal pay for the same work or work of equal value.

Non-compete agreements may only be concluded with employees possessing special knowledge or skills that could be used in competing activities. Compensation must amount to at least 40% of the employee’s average salary, including when the restriction applies during employment. Post-termination restrictions may last for up to two years.

Emerging challenges in employment law

The evolving employment landscape was also discussed at the ELA European Regional Meeting in Madrid, where artificial intelligence and pay transparency were among the key topics.

Discussions on artificial intelligence focused on its growing role in recruitment and employment-related decisions. Participants highlighted that AI is reshaping job roles and the skills employers require, rather than simply replacing employees. Human oversight remains essential, particularly when AI is used in redundancy selection. Concerns were also raised about the lack of AI policies and employee training in many organisations.

Pay transparency was another central theme. Beyond disclosing salary information, employers must be able to explain and justify differences in remuneration. Discussions also raised questions about whether future salary increases adequately address historical pay inequalities.

Other topics included the legal challenges facing Employer of Record (EOR) arrangements, the independence of internal investigations conducted by HR or legal departments, and employer responsibilities associated with remote work. A case involving a fatal accident during remote work highlighted the importance of clearly defined obligations and insurance coverage.

For further guidance on employment law in Estonia, Latvia, Lithuania and other jurisdictions, explore the Global Employer Handbook on the ELA website.

The 2026 Baltic chapters were prepared with contributions from Hanna Pahk from Ellex in Estonia, Irina Rozenšteina from Ellex in Latvia and Ramūnas Petravičius from Ellex in Lithuania.