Laws and Policies in Latvia

Employment Laws and Policies in Latvia

Employment Contracts in Latvia

Employment law in Latvia is governed by Labour Law (Darba likums) adopted 2001, as amended, implementing EU labor directives.

Contract Requirements

Employment contracts must be in written form for all employees.

Contracts must be concluded before or on employee’s first day of work and include:

• Full names and addresses (or registered addresses) of employer and employee
• Job title and description of duties
• Place of work (address or if remote/mobile)
• Start date of employment
• Expected duration (if fixed-term contract)
• Probationary period (if applicable)
• Working hours and schedule
• Salary/wage (gross amount in EUR) and payment frequency
• Payment method and date
• Annual leave entitlement
• Notice periods for termination
• Reference to applicable collective agreement (if any)
• Any other agreed terms and conditions

Language:

• Contracts must be in Latvian (official state language, legally binding)
• Bilingual contracts (Latvian-English or Latvian-Russian) common in practice for international companies
• If dispute, Latvian version legally binding

Registration:

• Employment contracts do not require registration with state authorities
• Employer must notify State Revenue Service when employee starts work (within 1 working day – electronic notification)

Copies:

• Two copies: employer and employee (both parties sign)

Types of Contracts

1. Employment Contract for Indefinite Period (Beztermiņa darba līgums – Permanent Contract)

• Open-ended employment relationship
• No predetermined end date
• Standard, most common type
• Full protections and benefits

2. Employment Contract for Definite Period (Terminēts darba līgums – Fixed-Term Contract)

• Defined end date or completion of specific work/project/task
• Can only be used for:
  • Work of temporary nature
  • Replacement of temporarily absent employee (sick leave, maternity, etc.)
  • Seasonal work
  • Specific project with defined completion
  • Work with temporary increase in workload
  • Other objective reasons justifying temporary employment
• Maximum cumulative duration: 5 years (including renewals with same employer)
• Renewal limits: If fixed-term contract renewed twice or employee continues working after expiry without objection, contract automatically deemed indefinite
• EU compliance: Latvia follows EU Fixed-Term Work Directive (preventing abuse)

3. Part-Time Contract

• Less than standard full-time hours (typically <40 hours/week)
• Pro-rata entitlements
• Cannot be treated less favorably than comparable full-time employees (EU principle)

4. Remote Work Contract (Attālināts darbs)

• Work performed outside employer’s premises (home, remote)
• Must specify remote work arrangements in contract or agreement
• Employer obligations: Equipment provision or compensation, OH&S responsibilities
• Same rights and protections as on-site employees

Probation Period (Pārbaudes laiks – Trial Period)

• Maximum duration:
  • 3 months for general employees
  • 6 months for managers, executives, persons with access to commercial secrets
• Must be clearly stated in written employment contract before start
• Cannot be extended beyond statutory maximum
• During probation:
  • Full salary and benefits apply (social contributions, etc.)
  • Notice period: 3 days for either party (employer can terminate with 3 days’ notice if unsuitable)
  • Full statutory rights (annual leave accrues, social security coverage, etc.)
• After probation:
  • Automatic transition to confirmed employment
  • Standard notice periods and dismissal protections apply

Prohibited: Probation cannot be applied to:

• Pregnant women
• Employees with children under 14 years (single parents, guardians)
• Employees under 18 years
• Certain protected categories

An EOR ensures all employment contracts comply with Latvian Labour Law and EU directives.

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Working Hours in Latvia

Working time in Latvia is regulated by Labour Law, implementing EU Working Time Directive.

Standard Working Hours

Statutory maximum:

• 40 hours per week (standard full-time)
• 8 hours per day (for 5-day work week)

Common practice:

• Monday-Friday work week (5 days)
• 9:00 AM – 6:00 PM typical office hours (with 1-hour lunch break)
• Saturday-Sunday: Weekend (days off)

Reduced hours for certain categories:

• Employees aged 15-18: 7 hours/day, 35 hours/week maximum
• Employees in hazardous/harmful conditions: 35 hours/week maximum
• Night workers: Average 8 hours per 24-hour period
• Disabled workers: May have reduced hours (individual assessment)

Rest Periods and Breaks

Daily rest:

• Minimum 11 consecutive hours rest between end of work and start of next shift (EU directive)

Weekly rest:

• Minimum 24 consecutive hours per week (typically Saturday-Sunday = 48 hours total weekly rest with daily rest)

Meal/rest breaks:

• At least 30 minutes break if working more than 6 hours
• Can be unpaid (if employee free to leave workplace)
• Typically 1-hour lunch break (unpaid, not counted as working time)

Additional short breaks:

• For certain work (computer work, etc.): Short rest breaks (5-10 minutes per hour) may be required (OH&S regulations)

Overtime (Virsstundas – Overtime Work)

Overtime = hours beyond 40 hours/week or 8 hours/day.

Limits:

• Maximum 8 hours overtime per week (averaged over 4 months)
• Maximum 144 hours overtime per year
• Exceptional circumstances: Up to 200 hours/year with employee consent and trade union consultation (if applicable)

Overtime compensation:

• At least 1.5× hourly rate (150% of normal wage) for all overtime hours
• OR compensatory time off (1.5 hours off for 1 hour overtime) – by mutual agreement

Calculation:

• Hourly rate = Monthly salary ÷ (monthly average working hours – 165-168 hours typically)

Employee consent:

• Generally required for overtime (except emergency situations)

Prohibition:

• Overtime not permitted for:
  • Pregnant women
  • Employees under 18
  • Night workers (in most cases)
  • Certain disabled workers

Night Work (Nakts darbs)

Night time: 10 PM – 6 AM

Night work provisions:

• Employees working at least 3 hours during night time are night workers
• Night workers entitled to:
  • Premium pay: At least 50% additional (1.5× rate) for night hours, or
  • Reduced working hours (fewer than 8 hours/day on average)
• Health checks: Night workers entitled to free regular health assessments

Restrictions:

• Pregnant women, mothers with children under 3, employees under 18: Night work prohibited (unless they consent and medical clearance obtained for mothers)

Sunday and Public Holiday Work

Sunday work:

• Generally employees entitled to rest on Sundays
• If work on Sunday required:
  • 2× rate (double time) or
  • Compensatory day off + normal pay

Public holiday work:

• If employee must work on public holiday:
  • 2× rate (double time) for hours worked, or
  • Compensatory day off + normal pay

Flexible Work Arrangements

Latvia strongly supports flexible work (EU member, modern economy):

• Remote work (attālināts darbs): Increasingly common (post-COVID acceleration, especially IT, finance, professional services)
• Flexible hours (elastīgs darba laiks): Flextime arrangements common
• Part-time work: Well-regulated, protected by law
• Job sharing, compressed work weeks: Permitted by agreement

Remote work rights:

• Employees have right to request remote work (employer must consider, though can refuse with justification)
• Employer obligations: Equipment, expenses, OH&S, work-life balance protections

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Employee Leave in Latvia

Latvian Labour Law provides statutory leave entitlements (implementing EU directives).

Annual Leave (Ikgadējais apmaksātais atvaļinājums – Paid Vacation)

Statutory minimum:

• 4 weeks (20 working days) per year (EU Working Time Directive minimum)
• Latvia provides 28 calendar days (4 weeks) which typically equals 20 working days for 5-day work week

Accrual:

• Entitlement arises after 6 months continuous service (first year)
• After first year, accrues monthly (proportionally)

Enhanced leave for certain categories:

• Employees under 18: 30 calendar days (longer than standard)
• Disabled workers: 30 calendar days
• Parents with children under 14 (or disabled children under 18): Additional 2-4 days (depending on number of children)
• Employees in hazardous/harmful conditions: Additional days (varies)

Scheduling:

• Employer determines timing (considering employee preferences, business needs)
• At least 2 weeks continuous once per year (cannot split all annual leave into short periods)
• Annual leave schedule should be established in advance

Carry-over:

• Unused leave can be carried to next year (by agreement)
• Should be taken within reasonable period (EU requires annual leave taken in year to which it relates, or shortly after)

Cash payment:

• Cannot be paid in lieu during employment (must take leave – EU directive)
• Exception: Upon termination, all accrued unused leave paid out

Payment:

• Paid at average wage for preceding 6 months
• Must be paid before leave starts (at least 3 days before)

Many employers offer more generous leave:

• 24-28 working days common in professional sectors, IT, multinationals

Public Holidays (Valsts svētku dienas – Official Holidays)

Latvia observes 14-15 public holidays annually:

Fixed holidays:

• New Year (1 January)
• Good Friday (variable – March/April)
• Easter Monday (variable – March/April)
• Labour Day (1 May)
• Restoration of Independence Day (4 May – restoration of independence 1990)
• Midsummer Eve (23 June – Līgo)
• Midsummer Day (24 June – Jāņi – major traditional holiday)
• Proclamation of the Republic of Latvia (18 November – independence 1918)
• Christmas Eve (24 December)
• Christmas Day (25 December)
• Second Day of Christmas (26 December)
• New Year’s Eve (31 December)

Note: When public holiday falls on Saturday/Sunday, typically not transferred to Monday (unlike some countries – employees simply have day off).

Entitlements:

• Public holidays are paid days off (in addition to annual leave)
• If required to work: 2× rate or compensatory day off

Sick Leave (Slimības lapa – Medical Leave / Sickness Benefit)

Statutory sick leave:

Duration:

• Unlimited days (as long as medically certified)

Payment:

• First day: Unpaid (waiting day)
• Days 2-10: Paid by employer at 75% of average wage
• Day 11 onward: Paid by State Social Insurance Agency (VSAA) at 80% of average wage (up to maximum – capped at social insurance contribution ceiling)

Medical certificates:

• Required from day 1 of sick leave
• From licensed physician (family doctor or specialist)
• Electronic sick leave certificates (e-sick leave – digitalized system in Latvia)
• Submitted to employer (employer forwards to VSAA electronically if >10 days)

Employer obligations:

• Pay sick leave for days 2-10 (75%)
• Cannot dismiss employee for legitimate illness (within reasonable period)
• After prolonged incapacity (typically 6-12 months), termination may be possible for health reasons (with medical evidence, proper procedure)

Note: Latvia’s sick leave system typical of EU/Nordic model (employer pays initial days, state social insurance takes over after – distributing burden).

Maternity Leave (Maternitātes atvaļinājums – Pregnancy and Maternity Leave)

Statutory maternity leave:

Duration:

• 112 days (16 weeks) total maternity leave
  • Can be divided: prenatal and postnatal, but typically:
  • 56 days (8 weeks) before expected delivery date (can start earlier if medical reasons)
  • 56 days (8 weeks) after delivery
• If complications or multiple births: Additional leave (up to 14 extra days)

Eligibility:

• All female employees entitled (no minimum service requirement for leave itself)

Maternity benefit:

• Paid by State Social Insurance Agency (VSAA) (not employer)
• 80% of average insurable income for preceding 12 months
• Capped at maximum insurable income (currently ~78,100 EUR/year – maximum benefit ~5,200 EUR/month – verify current)
• Paid for entire 112-day (or longer) maternity leave period

To qualify for maternity benefit:

• Must have at least 12 months social insurance contributions in preceding 24 months (contribution requirement, not necessarily continuous employment with one employer)

Job protection:

• Employer cannot dismiss pregnant employee or mother on maternity leave (except company liquidation)
• Position must be held open (or equivalent suitable position)
• Right to return to same job and conditions

Parental Leave (Bērna kopšanas atvaļinājums – Childcare Leave)

Duration:

• Until child reaches 1.5 years old (18 months)
• Can be taken by either parent (mother or father), or divided between parents
• Follows maternity leave (so total can be maternity 4 months + parental 18 months = 22 months from birth)

Parental benefit:

• Paid by State Social Insurance Agency (VSAA)
• 60% of average insurable income for first 12 months (until child is 1 year)
• 43.75% of average insurable income for next 6 months (until child is 1.5 years)
• Capped at maximum insurable income

Job protection:

• Position reserved
• Cannot dismiss employee on parental leave
• Right to same or equivalent job upon return

Additional unpaid parental leave:

• After parental benefit ends (after child reaches 1.5 years), employee can request additional unpaid leave until child is 8 years old
• Job protection (position reserved or equivalent), but unpaid

Paternity Leave (Paternitātes atvaļinājums)

Statutory paternity leave:

• 10 days paid paternity leave
• Must be taken within 2 months of child’s birth
• Paid by employer at full salary (100%)

Adoption Leave

Parents adopting child:

• Entitled to parental leave equivalent (18 months from adoption)
• Parental benefit from VSAA (same as biological parents)

Other Leave

Study Leave:

• Employees pursuing education entitled to paid study leave for exams, thesis defense (specific days per educational program level)
• Employer pays full or partial salary (depends on collective agreement, employer policy)

Compassionate/Bereavement Leave:

• Not strictly statutory, but common practice: 3-5 days paid leave for death of close family member (spouse, child, parent, sibling)
• Often in collective agreements or employer policies

Wedding Leave:

• Not statutory
• Some employers provide 2-3 days paid leave for employee’s marriage (company policy)

Unpaid Leave:

• By mutual agreement for personal reasons

Military Reserve/Civil Defense:

• Employees called for reserve duty, civil defense training entitled to leave (paid by state, employer releases)

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Employee Benefits in Latvia

Mandatory Statutory Benefits

1. Social Insurance Contributions (Sociālās apdrošināšanas iemaksas)

Latvia has comprehensive social insurance system managed by State Social Insurance Agency (VSAA – Valsts sociālās apdrošināšanas aģentūra).

Social Insurance Contribution Rates (2024):

Total contributions: 34.09% of gross salary

Breakdown:

• Employer contribution: 23.59% of employee’s gross salary
  • Old-age pension: 14%
  • Disability, survivors, maternity, sickness, unemployment, work injury: 9.59%
• Employee contribution: 10.5% of gross salary
  • Old-age pension: 10.5%

Calculation:

• Based on gross monthly salary
• Maximum contribution base: 78,100 EUR/year (6,508 EUR/month for 2024 – verify current; adjusted annually)
• Contributions capped at this amount

Example (Monthly salary €2,000):

• Employer social insurance: €2,000 × 23.59% = €471.80
• Employee social insurance: €2,000 × 10.5% = €210
• Total monthly social insurance: €681.80 (34.09%)

What social insurance covers:

• Old-age pension (state pension system)
• Disability pension
• Survivors’ pension (death benefits)
• Sickness benefit (from day 11, paid by VSAA at 80%)
• Maternity benefit (80% of average income for 112+ days)
• Parental benefit (60%/43.75% for childcare until 1.5 years)
• Unemployment benefit
• Work injury and occupational disease benefits

2. Personal Income Tax (Iedzīvotāju ienākuma nodoklis – IIN)

Latvia uses progressive income tax system (reformed 2018, 2021, 2024).

Personal Income Tax Rates (2024 – verify current as subject to periodic changes):

Progressive rates:

• 20% on annual income up to 20,004 EUR (first ~1,667 EUR/month)
• 23% on annual income from 20,004 to 78,100 EUR
• 31% on annual income above 78,100 EUR

Tax-free threshold (Neapliekamais minimums):

• 500 EUR/month (6,000 EUR/year) for all taxpayers
• Progressive additional allowance for low-income earners (decreasing as income rises)

Calculation example (Monthly salary €2,000):

1. Gross salary: €2,000
2. Less tax-free allowance: -€500 (basic)
3. Taxable income: €1,500
4. Tax: €1,500 × 20% (assuming annual income in first bracket) = €300 IIN

Note: Exact calculation depends on annual income, allowances. Employers use progressive monthly withholding.

Employer responsibilities:

• Calculate and withhold IIN monthly
• Remit to State Revenue Service (VID) by 23rd of following month
• File monthly and annual returns

3. Solidarity Tax (Solidaritātes nodoklis)

Introduced 2016 (additional tax on high earners for social cohesion).

Solidarity Tax Rate:

• 25% on annual income portion exceeding 78,100 EUR (same threshold as social insurance cap)

Who pays:

• High earners (income >78,100 EUR/year or >6,508 EUR/month)

Example (Annual salary 100,000 EUR):

• Portion above 78,100 EUR: 100,000 – 78,100 = 21,900 EUR
• Solidarity tax: 21,900 × 25% = 5,475 EUR/year (~456 EUR/month)

Note: Solidarity tax in addition to income tax (so high earners pay income tax + solidarity tax).

4. Minimum Wage (Minimālā alga)

National Minimum Monthly Wage (2024):

• 700 EUR/month gross (for full-time, 40 hours/week)
• Adjusted periodically (government reviews annually)

Enforcement:

• State Labour Inspectorate
• Underpayment violations subject to fines

Note: Minimum wage relatively low. Market salaries significantly higher, especially Riga, IT sector (typical professional salaries €1,200-3,000+/month).

5. Severance Pay (Kompensācija – Compensation)

Statutory severance payable in specific termination circumstances:

Amount:

• Average monthly wage (based on preceding 6 months)

When severance payable:

• Employer termination for reasons unrelated to employee (redundancy, position elimination, organizational changes, economic reasons)
• Employer termination due to employee’s health (medical incapacity confirmed by medical assessment)
• Termination by mutual agreement (if agreed)

When severance NOT payable:

• Voluntary resignation
• Dismissal for employee fault (serious breach of duties, misconduct)
• Fixed-term contract expiry (unless contract specifies otherwise)
• Probation termination

Example:

• Employee: 3 years service, average salary €2,500/month (last 6 months)
• Severance on redundancy: €2,500 (1 average monthly wage)

Payment timing:

• Must be paid with final salary (on last working day)

Note: Latvia’s severance relatively modest (1 month) compared to some EU countries with more generous formulas.

Employer Costs Summary

Total employer statutory costs on top of gross salary:

• Employer social insurance: 23.59% of gross
• Total employer statutory cost: 23.59% on top of gross

Example (Employee gross €2,000/month):

• Employer social insurance: €471.80
• Total: €471.80 (23.59%)
• Total employer cost: €2,471.80

Employee deductions from gross:

• Employee social insurance: 10.5%
• Personal Income Tax (IIN): 20-31% (progressive, after allowances)
• Solidarity tax (if applicable): 25% (on income >€6,508/month)
• Total employee deductions: ~30-35% of gross (typical for middle incomes)

Net salary: ~65-70% of gross (middle income range)

Common Additional Benefits Provided by Employers

To attract talent in competitive sectors (IT, finance, professional services), Latvian employers often offer:

Health & Wellness:

• Private health insurance (very common – complements state healthcare)
  • Coverage: Employee (often family as well)
  • Providers: AAS Balta, ERGO, BTA, If, others
• Dental insurance
• Life insurance
• Gym memberships, wellness programs
• Health screenings

Financial:

• Performance bonuses (quarterly, annual – very common)
• 13th/14th month salary (Christmas/summer bonuses – some employers)
• Stock options, equity (especially startups, tech companies)
• Profit-sharing schemes

Transportation:

• Public transport allowance (Riga public transport card)
• Company car (senior management, sales)
• Fuel/mileage allowance
• Bicycle benefits (purchase, maintenance – sustainable transport)

Meals:

• Lunch vouchers (Sodexo, Wolt for Business, others)
• Subsidized cafeteria

Professional Development:

• Training and certifications (especially IT – AWS, Microsoft, Cisco, ITIL; finance – ACCA, CPA)
• Conference attendance
• Language courses (English, German, other EU languages)
• Tuition reimbursement (MBA, advanced degrees)

Work-Life Balance:

• Additional annual leave (22-25 working days vs. 20 statutory)
• Flexible work (remote, hybrid, flextime – very common in IT, professional services)
• Work from anywhere programs (some tech companies)

Family:

• Extended paternity leave (beyond 10-day statutory – some employers offer 2-4 weeks)
• Childcare allowances
• School supplies allowance

Other:

• Mobile phone or phone allowance
• Internet allowance (for remote workers)
• Home office equipment (laptop, monitor, chair, desk – especially post-COVID)
• Employee assistance programs (EAP)
• Team building events, social activities
• Relocation assistance (for foreign employees moving to Latvia)

An EOR ensures all mandatory statutory contributions (social insurance 34.09%, income tax 20-31%, solidarity tax if applicable) are calculated accurately, and competitive market-standard benefits can be included.

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Payroll & Tax in Latvia

Payroll Currency

• All salaries paid in Euro (EUR / €)

Payroll Cycle

• Monthly payroll standard (universal)
• Payment typically last business day of month or beginning of following month (1st-5th)
• Payment by bank transfer (direct deposit) universal

Payslips:

• Must be provided (showing gross, deductions – social insurance, income tax, solidarity tax if applicable, net)
• Electronic payslips common (e-mail, employee portal)

Personal Income Tax

See detailed tax rates in Benefits section above.

Summary:

• Progressive rates 20-31% on annual income (after tax-free allowance €500/month basic)
• Solidarity tax 25% on income above €78,100/year (€6,508/month)

Payroll Deductions Summary

From employee gross salary:

• Employee social insurance: 10.5%
• Personal Income Tax (IIN): 20-31% (progressive, after allowances)
• Solidarity tax: 25% (if income >€6,508/month on portion above)
• Total employee deductions: ~30-35% of gross (middle income), up to ~40-45% (high income)

Net salary: ~55-70% of gross (depending on income level)

Employer Costs Summary

See detailed breakdown in Benefits section above.

Total employer statutory cost: 23.59% on top of gross

• Employer social insurance: 23.59%

Employer Payroll Responsibilities

Latvian employers must:

Monthly obligations:

• Calculate and withhold Employee Social Insurance (10.5%)
• Pay Employer Social Insurance (23.59%)
• Calculate and withhold Personal Income Tax (IIN) (20-31% progressive)
• Calculate and withhold Solidarity Tax (25% on high incomes >€78,100/year)
• Remit Social Insurance to State Social Insurance Agency (VSAA) by 15th of following month
• Remit Income Tax and Solidarity Tax to State Revenue Service (VID) by 23rd of following month
• File monthly payroll declaration (elektroniskā deklarācija – EDS) to VID
• Issue payslips to employees
• Notify VID electronically of employee start/end (within 1 working day)

Annual obligations:

• File annual income statement (Gada ienākumu deklarācija) to VID for each employee
• Provide employees with annual income certificates (for personal tax filing if applicable)
• Reconcile annual social insurance, income tax

Ongoing:

• Maintain payroll records (electronic bookkeeping mandatory)
• Keep records for 5 years (tax) / 75 years (social insurance – pension records)
• Register employees with VSAA (automatic via VID notification in practice)
• Accurate tracking of leave, sick leave, deductions

State Revenue Service (VID – Valsts ieņēmumu dienests):

• Tax authority
• Fully electronic systems (Electronic Declaration System – EDS mandatory for employers)
• e-VID portal for all tax administration
• Latvia has advanced digital tax administration (e-government leader)

An EOR manages all payroll calculations, tax withholdings, social insurance remittances, VID EDS filings, and compliance reporting for Latvia.

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Employment Laws & Compliance in Latvia

Key Compliance Areas

1. Written Employment Contracts

• Mandatory for all employees (in Latvian)
• Before/on first day of work
• Copy to employee

2. Employment Equality and Non-Discrimination

Latvian Labour Law and EU directives prohibit discrimination.

Protected characteristics:

• Gender/sex
• Race, ethnicity, nationality, skin color
• Age
• Disability
• Religion or belief
• Sexual orientation
• Political or other opinion
• Membership in trade union or political organization
• Pregnancy and maternity
• Social origin, property status

Equal pay:

• Equal pay for equal work mandated (EU equal pay directive)
• Gender pay gap reporting: Large employers (50+ employees) must report gender pay gap data

Discrimination prohibited in:

• Recruitment
• Pay and benefits
• Training, promotion
• Working conditions
• Termination

Sexual harassment:

• Prohibited
• Employers must prevent, address complaints

Special protections:

• Pregnant women, mothers: Cannot dismiss, work restrictions (no night work, heavy work, hazardous conditions)
• Young workers (under 18): Restrictions on working hours, hazardous work, night work
• Disabled workers: Reasonable accommodations required (EU directive)

3. State Labour Inspectorate (Valsts darba inspekcija – VDI) Compliance

• Conducts workplace inspections
• Checks employment contracts, wages, working hours, safety, social contributions
• Can issue fines, improvement orders, suspend operations for serious violations

Latvia has strong labor inspectorate (EU standards, active enforcement).

4. Tax and Social Insurance Compliance

• Timely registration with VID (employee start notifications within 1 working day)
• Accurate calculation and remittance (social insurance by 15th, income tax by 23rd monthly)
• Electronic filing mandatory (EDS system)
• Penalties for late payment, underreporting (fines, interest)

5. Minimum Wage Compliance

• Must pay at least minimum wage (€700/month gross)
• Enforcement by State Labour Inspectorate

6. Working Time, Overtime, Rest (EU Working Time Directive)

• 40-hour work week standard
• Overtime limits (8 hours/week averaged over 4 months, 144-200 hours/year)
• Overtime premium (1.5×)
• Daily (11 hours) and weekly (24 hours) rest
• Annual leave (20 working days minimum)

7. Leave Entitlements

• Annual leave (20 working days minimum per EU directive)
• Sick leave (employer pays 75% days 2-10, VSAA pays 80% from day 11)
• Maternity leave (112 days with VSAA benefit 80%)
• Parental leave (18 months with VSAA benefit 60%/43.75%)
• Paternity leave (10 days paid by employer)
• Public holidays (14-15 days)

8. Occupational Safety and Health (Darba drošība)

Latvia implements EU OSH directives:

• Employers must ensure safe working environment
• Risk assessments mandatory (identify hazards, implement controls)
• Safety training for all employees
• Personal protective equipment (PPE) (provide free)
• Health surveillance (for employees in hazardous work)
• Accident reporting to State Labour Inspectorate
• Safety representative (in workplaces with 50+ employees or hazardous conditions)

Enforcement:

• State Labour Inspectorate conducts inspections
• Violations: Fines, improvement orders, work stoppage for serious risks

9. Data Protection (GDPR)

Latvia implements EU General Data Protection Regulation (GDPR):

• Personal data must be processed lawfully, fairly, transparently
• Employee consent (employment contract is legal basis for processing employee data)
• Data security measures mandatory
• Employee rights (access, rectification, erasure, portability)
• Data breach notification (within 72 hours to Data State Inspectorate – DVI)

Data State Inspectorate (Datu valsts inspekcija – DVI):

• Supervises GDPR compliance
• Investigates complaints, conducts audits
• Can issue fines (up to €20 million or 4% of global turnover – GDPR penalties)

10. Trade Unions and Collective Bargaining

Latvia recognizes:

• Freedom of association (right to join or not join trade unions)
• Collective bargaining rights
• Strikes (under certain conditions, with notice procedures)

Practice:

• Trade union density relatively low (~13% – lower than Nordic countries, higher than some Eastern Europe)
• More prevalent in public sector, large manufacturing, transport
• Less in IT, startups, services
• Collective agreements can set terms above statutory minimums (wages, benefits, working conditions)
• Sectoral agreements exist (e.g., education, healthcare)

Termination & Notice Periods

Notice Period Requirements

Statutory minimum notice periods (Labour Law):

Employer-initiated termination:

• 1 month notice (standard for indefinite contracts)

Employee-initiated resignation:

• 1 month notice (standard)

Contractual notice:

• Employment contracts can specify longer notice than statutory minimums (common for senior positions – 2-3 months)
• Cannot be less than statutory

Exceptions:

• Probation period: 3 days notice (either party)
• Collective redundancy: Extended notice (see below)
• Gross misconduct: Immediate dismissal without notice (summary dismissal)

During notice:

• Employee continues working, receives full salary
• OR employer can release employee immediately (paying notice period salary – payment in lieu – atbrīvošana ar kompensāciju)

Example:

• Employee (indefinite contract) resigns: Must give 1 month notice
• Employer dismisses for redundancy: Must give 1 month notice + severance (1 average monthly wage)

Grounds for Termination

Employer can terminate for:

1. Mutual Agreement (Vienošanās):

• Both parties agree to end employment (any terms negotiated)
• Written agreement recommended

2. Expiry of Fixed-Term Contract:

• Contract ends on specified date (no notice required unless contract states otherwise)
• No severance (unless contract specifies)

3. Redundancy/Organizational Changes (Darbvietas likvidēšana, samazināšana):

• Position eliminated, business closure, restructuring, economic reasons
• Must follow procedures:
  • Genuine business justification
  • Consultation: With employee, trade union (if applicable), State Employment Agency
  • Selection criteria (if choosing among employees – objective, non-discriminatory: qualifications, performance, seniority, social circumstances)
  • 1 month notice (or longer if specified in contract)
  • Severance: 1 average monthly wage
  • Collective redundancy (if 10+ employees in 30 days or 20+ in 90 days): Additional requirements (notification to State Employment Agency 30 days in advance, trade union consultation)

4. Employee Misconduct/Breach of Duties (Darba pienākumu pārkāpums):

• Gross misconduct allowing summary dismissal (immediate, no notice, no severance):
  • Serious breach of duties
  • Theft, fraud, violence
  • Gross insubordination
  • Intoxication (alcohol, drugs) at work
  • Disclosure of employer’s secrets
  • Conviction of crime incompatible with employment
• Less serious misconduct: Progressive discipline (warnings), then termination with notice
• Requires investigation, employee given opportunity to respond, written decision

5. Poor Performance/Incompetence (Neatbilstība darbam):

• Employee unable to perform job satisfactorily (after warnings, training, opportunity to improve)
• Documented performance issues, improvement plans
• 1 month notice
• Severance payable (1 average monthly wage)

6. Medical Incapacity (Darba nespēja veselības stāvokļa dēļ):

• Prolonged illness preventing work (typically after 6-12 months cumulative sick leave in 12-month period)
• Requires medical assessment (occupational health doctor, medical commission)
• 1 month notice
• Severance: 1 average monthly wage

7. Retirement Age:

• Reaching retirement age alone not automatic ground for termination
• Must be justified (objective reasons)

Unlawful/Prohibited dismissals:

• Cannot dismiss:
  • Pregnant women, mothers on maternity/parental leave (except company liquidation)
  • During sick leave (first 6 months cumulative in 12-month period)
  • During annual leave
  • For trade union activity, asserting labor rights
  • For discriminatory reasons (age, gender, race, etc.)

Constructive dismissal:

• If employer fundamentally breaches contract (non-payment, unsafe conditions, harassment), employee can resign and claim wrongful dismissal (entitled to severance, compensation)

Fair Procedures for Dismissal

Best practice (Labour Law, case law):

For misconduct:

1. Investigation: Document violation, gather evidence
2. Written notification: Inform employee of allegations
3. Hearing: Allow employee to respond, present defense, bring representative
4. Decision: Based on evidence and employee’s response
5. Dismissal letter: Written notice with reasons, effective date, right to appeal
6. Right to appeal: Internal appeal (if company has procedure), or directly to court

For poor performance:

• Performance appraisals, documented feedback
• Warnings (verbal, written)
• Performance improvement plan (PIP) with clear goals, support, timeline
• Review and decision

For redundancy:

• Business justification documented
• Consultation (employee, trade union if applicable, State Employment Agency)
• Selection criteria applied fairly
• Notice and severance
• Explore alternatives (redeployment, voluntary redundancy, reduced hours)

Severance Pay

See detailed information in Benefits section above.

Summary:

• 1 average monthly wage (based on last 6 months)
• Payable on redundancy, organizational changes, medical incapacity, mutual agreement (if agreed)
• Not payable on resignation, misconduct dismissal, fixed-term expiry

Dispute Resolution

If employment dispute arises:

1. Internal Resolution:

• Attempt to resolve with employer (grievance procedures)
• Labour dispute commission (if exists in company)

2. State Labour Inspectorate (VDI):

• File complaint with VDI
• Inspectorate investigates, mediates

3. Court:

• District court (first instance for labor disputes)
• Employee files claim
• Time limit: Generally 1 month from dismissal (3 months for wage claims, discrimination)

Remedies for unlawful dismissal:

• Reinstatement to position (court can order, though uncommon in practice – employers often prefer compensation)
• Compensation:
  • Notice pay (if not given)
  • Severance (if applicable)
  • Lost wages for forced absence period
  • Compensation for unlawful dismissal: Up to 6 months’ average wage (court’s discretion based on circumstances)
  • Moral damages (if significant harm)

Burden of proof:

• Employer must prove dismissal was lawful (valid reason, fair procedure)
• Latvia follows EU principles (employer burden to justify)

Legal costs:

• Employee generally not liable for employer’s legal costs even if loses (encourages employees to assert rights)

Immigration and Work Permits

Latvian citizens and EU/EEA/Swiss nationals:

• Unlimited right to work in Latvia (EU free movement)

Non-EU/EEA foreign nationals:

• Require work permit to work legally in Latvia

Work permit types:

1. EU Blue Card:

• For highly qualified specialists
• Requires:
  • Higher education (bachelor’s or equivalent)
  • Employment contract with salary at least 1.5× average Latvian salary (currently ~€2,100+/month gross)
• Duration: Up to 4 years
• Advantages: Path to permanent residence faster, easier intra-EU mobility
• Application: Employer applies to Office of Citizenship and Migration Affairs (OCMA – PMLP)

2. Regular Work Permit (Atļauja uzturēties nodarbinātajam):

• For employment not qualifying for Blue Card
• Requires employer sponsorship
• Labour market test: Generally required (employer must demonstrate no suitable EU/EEA candidate – advertise locally 1 month)
• Duration: Initially up to 5 years (depending on contract), renewable

Application process:

1. Employer obtains approval from State Employment Agency (NEA) confirming no suitable local candidate (labour market test)
2. Employer applies to OCMA for work permit/residence permit for employee
3. Provides: Employment contract (Latvian), employee qualifications/documents, NEA approval, company documents
4. Employee obtains visa D from Latvian embassy/consulate abroad (long-stay visa)
5. Upon arrival, employee collects residence permit card from OCMA
6. Register address in Latvia (municipality)

Processing: 1-3 months (varies)

Exemptions from labour market test:

• EU Blue Card holders
• Intra-company transfers (ICT Directive – managers, specialists, trainees transferred within multinational)
• Startup employees (if company registered under Startup Law)
• Certain high-demand professions

Family members:

• Dependents (spouse, children) can apply for residence permits
• Can work (with work authorization)

Employer obligations:

• Sponsor work permit application
• Ensure employee has valid permit before commencing work
• Cannot employ foreign nationals without valid authorization (penalties: fines up to €4,000, criminal liability for serious violations)
• Notify OCMA of employee start/end, contract changes

An EOR with Latvian entity sponsors work permits for non-EU employees, navigating OCMA and State Employment Agency procedures.