Basic Facts

Latvia is a northeastern European country in the middle of three Baltic states. It is divided into 26 self-governed rajons (districts). Outside of this structure are seven major cities – designated republican cities with their own governments. Latvia’s main trading partners are Germany, Lithuania, Estonia, Russia, Poland, and the United Kingdom. Exports include wood, wood products, metals, foodstuffs, and textiles. Latvia imports machinery, oil, foodstuffs, and chemical products.

 

*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Latvia.

Capital :
Riga
Currency :
Euro (€, EUR)
Languages spoken :
Latvian
Population :
1.88 million (2021 est.)
Minimum wage 2023 :
€620 (Monthly)
Cost of Living index :
$$$ (61 of 139 nations)
Payroll Frequency :
Biweekly/Monthly
VAT - standard rate :
21%
GDP - real growth rate :
4.5% (2021 est.)

Statutory Holidays

The national holidays mentioned below are valid for the year 2023.

Date
Holiday Name
Extra Information
January 1
New Year’s Day
April 7
Good Friday
Movable - The Friday before Easter
April 10
Easter Monday
Movable - The first Sunday of a full moon after March 21
May 1
Labor Day
May 4
Independence Restoration Day
May 5 - Independence Resoration Day Holiday
May 14
Mother’s Day
Movable - The second Sunday of May
May 28
Pentecost
Movable - As per the Western Church calendar - A Sunday in May or June
June 24
Midsummer’s Eve
Summer solstice
June 25
Midsummer Day
Movable - Summer solstice
November 18
Independence Day
December 24
Christmas Eve
December 25-26
Christmas Day
December 31
New Year’s Eve

Contract Sharing Time


The approximate time for sharing the contract with an employee in Latvia is 4 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.

NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.

What You Need To Know


  • A Solidarity Tax of 25% is applicable for the portion of incomes exceeding €78,100 per year.
  • The employer, at the written request of the employee, has the obligation to grant sufficient time to the employee, within the scope of contracted working time, for seeking another job, if a notice of termination of an employment contract has been given for certain causes.
  • If an employee and an employer agree to perform work remotely, the expenses of the employee related to the performance of remote work must be covered by the employer.

Labor Conditions


Working Hours

Regular working time must not exceed eight hours per day and 40 hours per week. Every employee has the right to a work break if their daily working time exceeds six hours. A break of at least 30 minutes must be granted not later than four hours after the start of work.

 

Overtime

Overtime work may not exceed eight hours on average within a seven-day period, which is calculated in the accounting period that does not exceed four months.

Probation Period

The probation period may not exceed three months. However, it is possible to agree to a probationary period longer than three months but does not exceed six months in a collective labor agreement concluded with the employee’s union, without reducing the overall level of protection of employees.

 

Termination Notice Period

During probation, both employers and employees can terminate the contract within 3 days’ notice. Termination notice periods are two weeks for limited contracts and vary between 10 days and two months for unlimited contracts.

Leave / Time Off

Annual Leave

Employees are entitled to annual paid leave of not less than four calendar weeks, excluding holidays. Annual paid leave in the current year may be granted in parts, nevertheless, one part of the leave in the current year must not be less than two uninterrupted calendar weeks.

Sick Leave

Employees are eligible for nine days of employer-paid sick leave. Afterward, the social security (SSIA) pays the sick leave.

Parental Leave

Every employee has the right to parental leave in connection with the birth or adoption of a child, for a period not exceeding one and a half years up to the day the child reaches the age of eight.

 

Maternity Leave

Employees are entitled to a minimum of 112 days and a maximum of 140 days of maternity leave. Maternity benefits are granted when the social contributions for maternity insurance have been made for a period of at least three months in the last six months preceding the month in which the insurance case occurred (the first day of maternity leave) or; no less than six months in the last 24 months.

 

Paternity Leave

The father of a child has the right to leave for 10 calendar days, immediately after the birth of the child, but not later than six months after the birth of the child.

Other Types of Paid Leave

Study Leave

An employee who studies at any type of educational institution without interrupting work must, in accordance with a collective agreement or employment contract, be granted study leave with or without the maintenance of a salary.

Unpaid Leave

National Guard Service Leave

Leave without retention of pay must be granted for the time specified in the statement of the commander of the National Guard Unit.

Carer’s Leave

The employer should grant leave without pay for a period not exceeding five working days in one year, if it is requested by an employee who needs to personally care for a spouse, parent, child, another close family member, or a person who lives with the employee in the same household and who, for serious medical reasons, needs substantial care or support.

Unpaid Leave Upon Request

At the request of an employee, an employer may grant them leave without the maintenance of remuneration also in other cases.

Study Leave

Study leave can be unpaid at the employer’s discretion.

Statutory Benefits

In general, the rate of compulsory contributions if an employee is insured for all types of social insurance is 34.09%, of which 23.59% is paid by the employer, and 10.50% is paid by the employee.

The contribution rates to the national social insurance also depend on the status of the employee and employer, as summarized below:

National Social Insurance Contribution Rates

Employee/Employer Status

Employer Contributions

Employee Contributions

Total

Domestic Latvian employee who is employed with a company registered in Latvia/EU/EEA23.59%10.50%34.09%
Domestic Latvian employee who is employed with a company registered in Latvia/EU/EEA and has reached the age of entitlement for an old-age pension (whether the pension is granted on preferential terms or prematurely)20.77%9.25%30.02%
Foreign non-Latvian employee with a foreign employer31.83%31.83%

Health Insurance

1% of the total mandatory contribution rate of 34.09% is used to finance health care services.

When receiving state-funded healthcare services, the beneficiary must co-pay a patient’s fee. Patient fees are charged for visits to General Practitioners and specialists, treatment in inpatient day clinics, and hospitals, as well as, for certain diagnostic examinations.

Other Insurances

Accident Insurance

 

Social security covers insurance against accidents at work and occupational diseases, including:

  • Sickness benefit;
  • Compensation for loss of work capacity;
  • Compensation for loss of a breadwinner (survivor’s benefits);
  • Reimbursement of treatment and rehabilitation expenses due to an accident at work or an occupational disease.
Unemployment Insurance

 

Unemployment benefits (Bezdarbnieka pabalsti) are covered by social security (SSIA), and no additional employer contributions are needed. Unemployment benefit is paid for a maximum of 8 months.

Public Pension

The total mandatory contributions for social security covers state pension insurance.

Latvia has a three-tier pension system (trīs līmeņu pensiju sistēma):

  • The first is the state mandatory unfunded pension scheme;
  • The second is the state mandatory funded pension scheme;
  • The third is the private voluntary pension scheme.

The retirement age is 64 years and three months in 2022, but it will be raised to 65 by January 1 of 2025.

Other Statutory Benefits

Funeral Benefits (Apbedīšanas Pabalsts)

The funeral benefit is paid to the person who has undertaken the funeral.

 

Childcare Allowance

Childcare allowance is paid to one of the child’s parents, guardian, or another person who, in accordance with the decision of the Orphan’s Court, actually cares for and raises the child up to the age of two.

Disclaimer

The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.

Information provided in this Country Guide is provided “as is” without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, or non-infringement. WorkMotion Software GmbH periodically adds, changes, improves, updates, or removes information without notice, and assumes no liability or responsibility for any errors or omissions in the contents of this Country Guide. This Country Guide may contain links to other websites. WorkMotion Software GmbH disclaims all liability for the privacy practices or the content of such websites.

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