Employment Law

Employment Contracts in Latvia

Employers in Latvia are legally required to provide all employees with a formal employment contract. All contracts need to include any relevant details of the agreement, such as remuneration, rights and benefits, etc., and should be written in Latvian with all references to the Euro currency.

Most employment agreements are indefinite and a fixed-term contract may only be possible in certain circumstances.

Fixed Term

Indefinite

Working Hours in Latvia

The standard working week in Latvia is 40 hours, with a 5-hour day and an 8-hour working day.

Holiday Policy

Latvian Holidays

Workers in Latvia are entitled to at least four weeks (20 days) of paid leave.

Latvian Sick Leave

Employers in Latvia usually provide employees with 10 days of paid sick leave, with compensation of 75% of normal wages for the second and third days and 80% of normal wages for the remaining days. Absences exceeding ten days are borne by the government.

Parental Leave in Latvia

Latvian female workers are entitled to paid maternity leave of 56 days before and 56 days after childbirth (122 days in total). The government pays for this leave so the employer has no liability. Male employees are entitled to ten days of paternity leave until the child is two months old.

Additional parental leave is available for up to 18 months until the child reaches eight years of age.

Taxation in Latvia

Employers in Latvia are generally required to withhold income tax from their employees. Latvian income tax rates range from 20% to 31.4% depending on income level.

Employers and employees are required to contribute 23.59% and 10.5% of wages respectively to the Latvian social security scheme.

Health Insurance in Latvia

Latvia has nationalized health care so employers are not required to provide workers with private health insurance. However, some companies do choose to offer it as an employment benefit.

Termination and Severance in Latvia

Unless on probation, employees in Latvia are generally entitled to at least ten days' notice of termination and may receive up to one month's notice.

Employees are also typically entitled to severance pay upon termination, with the amount varying based on years of service. usually:

• Worked for the employer for a maximum of five years = one month’s salary
• Working for the employer for five to ten years = two months’ salary
• Worked for employer for 10 to 20 years = three months salary
• Worked for employer for more than 20 years = four months’ salary

Salary and Benefits

Compensation Law in Latvia

The minimum wage for a full-time worker in Latvia in 2020 is 430 euros per month.

Welfare Administration in Latvia

Setting up a benefits system for the Latvian workforce can be difficult and complex if you are not familiar with Latvian national, customary and employment laws. Standalone setup can take weeks and may cause unexpected delays.

Remoly can simplify your Latvian benefits administration. Our Latvian experts can handle everything for you, helping you focus on a successful expansion.