A row has broken out in Lithuania over who should set the price of a ride or a food delivery – a human being or a piece of software. The dispute cuts to the heart of a broader European debate about the rights of gig workers, and Lithuania must resolve it by December.
Because gig workers are classed as self-employed rather than employees, platforms are under no obligation to meet the statutory minimum wage – and lawyers who advise drivers and couriers say some currently do not.
Lithuania is now being forced to confront that reality as it works to transpose the EU's Platform Work Directive, legislation designed to improve conditions for those who work through app-based companies such as Bolt and Wolt, into national law by December 2 this year.
The Ministry of Social Security and Labour has drafted amendments to Lithuania's Labour Code that would establish when a platform worker should be treated as an employee rather than an independent contractor.
Workers' representatives broadly welcome the proposals – but one of the criteria that would trigger that classification strikes at a practice the platforms currently rely on, and they, alongside the Ministry of Economy and Innovation, are pushing back.
The three-test question
At present, people working through platforms are treated as self-employed partners or independent contractors rather than employees. Under the proposed changes, that would shift – a person would be classified as a platform employee if they lacked at least one of three specified rights.
The first two are relatively uncontroversial: the right to choose freely when to work and how many jobs to take, and the right to offer similar services independently to other clients.
The third is where the battle lines have been drawn. If the gig worker has no right to negotiate their own pay, that is, it is set unilaterally by the platform's algorithm, and if they cannot see the full details of a job, including its address, distance, and price, before deciding whether to accept it, then the worker would be classified as an employee, not an independent contractor.
The Ministry of Social Security and Labour says the criteria emerged after eight rounds of negotiations within the country's Tripartite Council, which brings together government, employers, and trade unions.
"When determining whether a person working on a platform should be classified as an employee or a self-employed individual, the actual circumstances are assessed first and foremost – not what the parties have written in their contract. The Labour Code criteria and additional indicators are applied to establish the correct employment status. A further important principle applies: if a person lacks at least one of the three rights set out and signs of subordination are present, then an employment relationship exists, and it is for the platform to prove otherwise if it disagrees," the ministry stated in its response to LRT.lt.
'We don't even know what we'll be charged'
For those who deliver food or drive for a living through these apps, the third criterion is non-negotiable.
"This is a red line we cannot retreat from," said Donatas Čyžius of the Lithuanian Platform Workers' Trade Union. "Only though this criterion we can draw a clear boundary between employment and self-employment, and secure our rights and some ability to influence platform decisions."
Čyžius pointed to Bolt's commission structure as an example of the problem. The platform already charges drivers a commission of 25% and has recently introduced a dynamic commission rate that fluctuates upwards. Drivers are not told in advance what commission will apply to a given journey, yet must still pay VAT on top of it.
"How can a driver work without even knowing what commission will be charged?" he asked.
Emilija Švobaitė, a lawyer who advises platform workers, said the current system allows platforms to pay rates that can fall below Lithuania's statutory minimum wage, since workers operate under self-employed status.
"We want all workers to be able to predict their earnings more reliably and to receive fair pay for their work," she said, adding that international trade unions have gone further still, calling for employment status to be presumed by default and for platforms to be required to prove otherwise.
The platforms push back
The Ministry of Social Security and Labour's proposal was criticised by representatives of Bolt and Wolt.
"This regulation will determine whether individuals working with digital platforms such as Wolt can continue to operate as self-employed, or will have to be reclassified as employees working under traditional employment contracts," said Mindaugas Liutvinskas, Wolt's head of public policy for the Baltic states.
He warned that reclassifying workers as employees would cost them the very flexibility many of them value. Fixed hours, set shifts, and centralised scheduling would replace the current freedom to log on and off at will.
Meanwhile, Laimonas Jakštys, head of Bolt's ride-hailing operation, argued that the proposed threshold for establishing an employment relationship was lower than anything required by the EU directive or applied elsewhere in Europe. He said the third criterion failed to reflect how platform businesses actually work.
"Whilst we support the first two criteria, which are already recognised in EU case law, the third is a unilateral Lithuanian initiative that could negatively affect the country's competitiveness," he said. "The key question should not be whether the platform sets the price, but whether the individual has real freedom over when and how much they work."
Emilis Ruželė, deputy director of the Lithuanian Business Confederation, argued that the wording currently proposed by the ministry could create legal uncertainty and leave excessive room for interpretation.
He suggested instead that platforms should be required to guarantee compliance with at least two of the rights, and the third criterion should be reworded to give workers influence over their pay – through accepting or rejecting jobs – rather than the right to negotiate it outright.
A government divided
The dispute has exposed a rift within the Lithuanian government itself, as the Ministry of Economy and Innovation appears to disagree with the Ministry of Social Security and Labour's proposal.
The Ministry of Economy and Innovation's chief economist, Titas Budreika, acknowledged that new business models required new thinking on workers' rights, but warned against what he described as disproportionate regulation.
Although platforms account for only around 0.1 per cent of Lithuania's economy directly, he said, their knock-on benefits were considerably larger – stimulating competition in the taxi market, expanding the customer base for small restaurants, and reducing the shadow economy by leaving a digital trail of every transaction.
Reclassifying self-employed workers as employees would, he argued, drive up platform costs, push prices higher for consumers, and ultimately reduce demand – hitting the very workers and small businesses the regulation was meant to protect.
"We advocate a balanced approach to regulation, one that protects platform workers' rights without creating artificial barriers to the development of innovative business models in the future," he said.
What happens next?
The Labour Code amendments are due to be submitted for inter-ministerial coordination this month. If passed, the legislation would come into force in December, with a one-year transitional period during which the State Labour Inspectorate would assist businesses and workers in adapting to the new rules.
With the platforms already signalling their opposition and a government ministry on their side, the draft faces a difficult passage through parliament (Seimas). Trade union representatives say they are prepared for that fight.
"We are certain there will be another debate on this issue when the bill reaches the Seimas," Švobaitė said. "We will represent our position at that stage as well."
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