Whether attendance at a company event qualifies as paid working time depends strictly on whether the employer mandates participation, according to Jurgita Karvelė, an attorney at the law firm Sorainen. While labor codes do not explicitly categorize social gatherings, the legal standard rests on whether the employee remains under the employer’s direction during the event.
When is a company event considered working time?
Legally, working time encompasses any period during which an employee is at the disposal of the employer or performing duties under an employment contract. According to Jurgita Karvelė, the primary test is whether the employee has the freedom to choose whether to attend. If an employer issues a direct order making the event mandatory, the employee is effectively under the employer’s authority and is entitled to compensation.
Why the element of subordination matters
The concept of subordination—where an employee must follow an employer’s instructions—is a fundamental element of labor relations. When an employee is required to attend a company function, they are acting for the benefit of the employer. Courts, including the Supreme Court of Lithuania and the Court of Justice of the European Union, have established that working time is the direct opposite of rest time. The key factor is not the intensity of the work, but whether the employee is required to be available to perform duties if necessary.
Are executives treated differently?
High-earning employees may be subject to different rules. Under the Labor Code, employees earning more than two times the national average wage can negotiate employment terms that deviate from standard regulations. This means that an executive’s employment contract could explicitly state that their salary includes compensation for participation in company team-building or social events.
How to communicate event requirements clearly
To prevent potential legal disputes, employers should be deliberate in their communication. Using phrases like “we invite you to join” or “we hope you can find the time” signals a non-mandatory expectation. Conversely, explicitly stating that attendance is required or that absence could be viewed as a breach of duty converts the event into a work-related activity. Once an event is deemed mandatory, the employer is legally obligated to treat the time as working hours and pay accordingly, regardless of whether the activity involves professional tasks or leisure.
Frequently Asked Questions
- Does a company party always count as work? No. It only counts as work if the employer mandates attendance.
- Can I be penalized for not attending a company event? Only if the event is officially classified as a mandatory work activity. If it is voluntary, you cannot be penalized for skipping it.
- Where should companies document these policies? Policies regarding social events should be clearly outlined in internal work rules or individual employment contracts.
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