Table of Contents

Latvia

Table of Contents

Currency

Euro (EUR)

Payroll Frequency

Monthly

Employer Taxes

20.77% to 23.59%

About Latvia

Located in the Baltic region of Northern Europe, Latvia is a member of the European Union and home to Latvians, Livonians, as well as a number of ethnic Russians. Its capital city is Riga and the country’s population is just shy of 2 million people, as of the 2018 estimate.

Its political history has included Swedish, Polish and Russian rule, most recently as part of the Soviet Union for 45 years after WWII and until its independence in 1990. Latvians have continued to maintain their cultural identity throughout foreign occupation through their language and musical traditions. Latvia has a temperate climate composed of forests, as well as arable land. Common species of wildlife include wild boar, moose, and wolves. The white wagtail is the national bird of Latvia.

The Latvian economy, which experienced a high growth rate in the 2000s, suffered much the same as others in 2008 and is still trying to recover and stabilize. The unemployment rate has improved and its GDP has recovered some of its earlier momentum. The transportation sector is around 14% of its GDP, given its prime location between larger economies such as the Nordic states and Russia.

Employment Relationship

• Permanent Employment

The Labor Law of Latvia dictates that all employment contracts are made for an unspecified duration or permanent employment, except the ones explicitly concluded for a fixed term or seasonal, casual work. If the employment contract does not mention a specific duration, it is deemed as entered into for an unspecified period or permanent work.  Permanent agreements can be terminated by either party with a notice period. 

• Fixed-Term or Specific-Purpose Contracts

An employment contract entered into for a specified period must include the expiry date or conditions that determine the completion of work. If a fixed-term agreement does not have these conditions, it is deemed a contract for an unspecified duration. The same provisions apply to fixed-term employees as those to permanent employees in the same organization.  Fixed-term contracts cannot exceed 5 years, including renewals. If upon the expiry of the term, the contract continues, it is regarded as entered into for an unspecified period. Employment contracts made for fixed duration terminate on the day when the term expires. If an employment contract for a specified period does not include a final date, the employer has an obligation to notify the employee in writing of the expected termination at least 2 weeks in advance.

• Temporary Employment Contratcs

Temporary employment contracts are allowed for casual and short-term work related to an expansion of the scope of work, an increase in production, or emergency work under exceptional circumstances. Employers are allowed to hire temporary employees through temporary work agencies (work placement services). Temporary employees are hired under a 3-way agreement between the agency, employee, and hiring employer. The agency must ensure the same working conditions and employment provisions are provided to a temporary employee as those provided to permanent employees hired directly. They must also ensure safe and harmless working conditions during the posting period. 

Probationary Period

Employment contracts can include a probationary period not exceeding 3 months in duration. Employees under 18 years of age cannot be employed with probation. An employment contract must explicitly state the duration of the probationary period. Without reducing the overall protection level of employees, a probationary period exceeding 3 months but not exceeding 6 months may be agreed upon in a collective agreement concluded with an employee trade union. In case of termination of a contract during the probationary period, it is not mandatory to give a reason for termination; however, a notice of at least 3 days must be provided. If the employer, when giving a notice of termination of an employment contract during the probationary period, has violated the prohibition of differential treatment, the employee has the right to bring an action to a court within 1 month from the date of the termination notice receipt.

Working Hours

The standard working hours are 8 hours per day or 40 per week. If the daily working time on any weekday is shorter than the regular daily working time, the length of some other weekday may be extended, but not more than by 1 hour.  For employees working in high-risk jobs, as well as young employees over the age of 15 but under 18, working hours cannot exceed 7 per day or 35 per week. Employees between 13 and 15 years of age may not work for more than 10 hours a week. A workday is reduced by an hour before public holidays unless a shorter working time has been specified by a collective agreement, working procedure regulations, or an employment contract.

Holidays / PTO

• Statutory Holidays

• Paid Annual Leave

Employees in Latvia are entitled to annual paid leave of at least 4 weeks, excluding public holidays. The right to full leave starts after 6 months of continuous work in the first year. Employees who have taken maternity leave can use their annual leave in the same year irrespective of service duration with the employer.  Supplementary annual leave is granted to employees taking care of a child with a disability under 18 years of age or children under 16 (the duration of leave depends on the number of children). Persons who work in jobs associated with special risks are also eligible for supplementary annual leave. Annual leave can be transferred to the next year under certain circumstances.

• Sick Leave

Employees who have paid at least 3 monthly contributions within the last 6 months or 6 contributions in the last 24 months are entitled to sickness benefits. Sick leave is paid as follows: The first 10 days are paid by the employer at the rate of 75% of the employee's average earnings for the second and third day, and 80% from the fourth to the tenth day. The first day of sickness is not paid. From the 11th day, benefits are paid by the State Social Insurance Agency at the rate of 80% of the average earnings of the employee for a maximum of 26 weeks continuously or 52 weeks in a 3-year period. In case of occupational sickness, the benefit is paid from the first day. The employee must present a medical certificate to the employer. 

• Maternity Leave

Pregnant employees are entitled to 112 days of maternity leave: 56 days before birth and 56 days after birth, each of which can be increased to 70 days in case of any complications. Employers must also provide appropriate leave for medical checkups if it is not possible to undergo such an examination outside of working time. It is prohibited to employ pregnant women in harmful jobs that pose a risk to their or their child's health or to force them to work overtime. A pregnant woman can request to work part-time during the period following childbirth for up to 1 year.  Employees have the right to return to their previous position after maternity leave. Employers are prohibited from giving a notice of termination of an employment contract to women during pregnancy and the period following childbirth for up to 1 year. Maternity benefits are paid by the State Social Insurance Agency as 80% of the average salary of the employee for 112 days or a maximum of 140 days in case of complications. The benefit must be requested within 6 months from the first day of the maternity leave.

• Paternity Leave

Latvia's labor law grants employees paternity leave of 10 calendar days. This leave must be taken within 2 months from the birth of the child. If a mother has died in childbirth or during the first 42 days following delivery, the father is entitled to a leave of 70 days from the date the child was born. Same-sex couples are also entitled to paternity leave. The benefits for paternity leave are paid by the State Social Insurance Agency as 80% of the average salary of the applicant. The benefit must be requested within 6 months from the first day of the leave.

Termination of Employment

• Notice Period

When terminating an employment contract, an employer must give a notice period to employees based on the reason for termination as follows: In case of gross misconduct (illegal activities, showing up to work in a state of intoxication) or inability to work due to health issues – no notice period  In case of violation of employment contract, acting contrary to moral principles, violation of health and safety provisions, or temporary disability for more than 6 months – 10 days of notice.  In case of lack of adequate occupational competence, reinstatement of an employee who previously performed the respective work, reduction in the number of employees, or liquidation of business – 1 month. The notice must be given in writing and include the reason for termination.  Persons hired for temporary work have the right to 1 day's notice. Fixed-term contracts without a final date can be terminated by giving 2 weeks' notice.

• Severance Benefits

Employees who have been dismissed for lack of occupational competence, temporary disability, liquidation of the business, or reduction in the workforce are entitled to severance pay. Severance benefits are paid as follows, depending on the years of service: Less than 5 years of service – 1 month's average earnings 5 to 10 years of service – 2 months of average earnings 10 to 20 years of service – 3 months of average earnings More than 20 years of service – 4 months of average earnings.