Latvia
Knowledge Base
Frequently asked question, important data and information on EOR.
General information
620 Euros per month
Labor Law
Laws that regulate Labor Relationship
• Labor Law, the Employment Law
• The Law on State Social Insurance
• The Law on Personal Income Tax
• The Law on Collective Agreements.
These laws set out the rights and obligations of employers and employees, as well as the rules for hiring, working conditions, and termination of employment.
Onboarding guide
Requirements for a labor contract
A labor contract must be in writing and must include:
• The employee’s duties
• Working hours
• Remuneration/ salary
• Start date
•Termination notice
• Provisions set by the collective bargaining agreement (if any)
Pre-hire Medical exam
A pre-hire medical exam is not required in Latvia.
Types of contracts
• Fixed-term
• Indefinite
• Part-time
Probation Period
Are offer letters mandatory in the country?
Offer letters are not mandatory but are recommended.
Are digital signatures in labor contracts valid?
Yes, digital signatures are valid in labor contracts in Latvia.
Mandatory onboarding documents
• ID original
Statutory benefits
Annual Bonus
There is no statutory bonus in Latvia. Any supplementary bonuses should be outlined in the contract of employment.
Additional bonus
There are no additional statutory bonuses for employees in Latvia.
Leaves (medical, maternity, paternity, etc.)
• Sick leave: If an employee is unable to work due to illness or injury, they may be entitled to sick leave. During sick leave, the employee is entitled to receive sick pay, which is usually paid by the employer for the first 10 days of the leave. After that, the employee may be entitled to sickness benefit paid by the state.
• Maternity leave: Female employees are entitled to at least 14 weeks of maternity leave, which may be taken up to six weeks before the expected due date. During this leave, the employee is entitled to receive maternity benefit paid by the state.
• Paternity leave: Male employees are entitled to paternity leave of up to 10 working days, which must be taken within six months of the child’s birth. During this leave, the employee is entitled to receive paternity benefit paid by the state.
• Parental leave: Employees in Latvia are entitled to parental leave to take care of their child until the age of one or three years old, depending on the circumstances. The leave can be taken by either parent, and it can be taken full-time or part-time. During this leave, the employee may be entitled to receive parental benefit paid by the state.
• Unpaid leave: Employees may request unpaid leave for personal or family reasons, such as education or caregiving. The duration of the leave and the terms and conditions are determined by the employer and employee.
Note: It is important to note that the rules and entitlements for each type of leave may vary depending on the collective bargaining agreement or employment contract. Employers are responsible for ensuring that their employees are aware of their entitlements and that they comply with the rules and regulations regarding leaves.
Annual Leave (days per year)
Employees in Latvia are entitled to 28 calendar days of annual leave per year. The entitlement increases to 35 calendar days after ten years of service.
How do vacation days expire?
Vacation days must be used by the end of the leave year, which is December 31st.
Official Holidays
• January 1 New Year’s day
• April 07 Good Friday
• April 10 Easter Monday
• May 1Labor day
• May 4 Declaration of Independence day
• May 5 Declaration of Independence day (bridge day)
• May 29 Day of Bronze Medal Win
• June 23 Mid-summer Eve
• June 24 Jani
• November 19 National Day
• December 24 Christmas Eve
• December 25 Christmas day
• December 26 Second day of Christmas
• December 31 New Year’s Eve
Working on holidays and Sundays
If an employee is required to work on a public holiday or Sunday, they are entitled to receive additional pay for each hour worked at a rate of at least 100% of their average hourly wage. Alternatively, an employer and employee may agree in writing that the additional pay will be compensated with time off work in lieu of payment.
Number of Working hours
The statutory working hours in Latvia are 40 hours per week or 8 hours per day.
Overtime
Overtime is any work performed in excess of the employee’s regular working hours. Overtime work must be compensated at a rate of at least times the regular hourly rate. The maximum amount of overtime allowed is hours per year.
Social Security (what does it cover)
Social Security covers old age, disability, survivor, sickness, and maternity benefits.
Payroll
Salary payment currency
Euro (EUR).
Can salary be paid in a different currency other than the local currency?
Yes, salary can be paid in a different currency other than the local currency. However, the employee must give written consent to receive their salary in a foreign currency, and the employer must ensure that the currency exchange rate used is fair and transparent.
Payment frequency
The typical payment frequency for employees in Latvia is twice a month.
VAT percentage
The VAT percentage in Latvia is 21%.
Income Tax
Ranges from 20% to 31% for residents and non-residents
For more information see: https://taxsummaries.pwc.com/latvia/individual/taxes-on-personal-income
Tax Payer Identification Number
The Taxpayer Identification Number in Latvia is called the Personal Code (Personas kods).
Offboarding
Voluntary resignation
In Latvia, employees have the right to voluntarily resign from their employment at any time, but they must follow certain rules and considerations:
• Notice period: An employee is required to give their employer a written notice of resignation at least two weeks before the intended date of termination unless otherwise agreed upon in the employment contract. The notice period may be longer if agreed upon in the contract.
• Final paycheck: The employer is required to pay the employee’s final paycheck, including any unpaid wages and accrued but unused vacation time, within seven days of the termination date.
• Return of company property: The employee must return all company property, including keys, access cards, and equipment, on or before the last day of employment.
• Obligations of the employer: The employer must provide the employee with all necessary documents, such as a certificate of employment and record of service, upon request.
• Resignation during the probationary period: If the employee resigns during the probationary period, there is no notice period required unless otherwise stated in the employment contract.
It is important to note that if the employee resigns without giving proper notice or fails to return company property, the employer may withhold a portion of their final paycheck to cover any damages or losses incurred as a result.
Contract termination
A labor contract in Latvia can be terminated by mutual agreement, expiration of the contract, termination due to the employee’s fault, redundancy, or termination by the employer for justified reasons.
Justified Dismissal
Under Latvian law, an employer may dismiss an employee for justified reasons, such as:
• The employee’s incompetence or unsuitability for the position
• The employee’s repeated failure to meet job requirements
• The employee’s serious or deliberate violation of work duties
• The employee’s criminal conviction or detention
• The employee’s refusal to follow the employer’s legitimate instructions or changes to working conditions
• The employee’s continued absence from work without a valid reason
• The employee’s serious breach of discipline or the employer’s internal regulations
• The employee’s gross misconduct or unethical behavior at work
• The employee’s inability to perform their work due to illness or disability
• The employee’s liquidation or bankruptcy of the company.
Note: it is important to note that an employer must follow the proper procedures for dismissal, including giving the employee written notice and an opportunity to respond to the allegations against them. If the employer does not follow these procedures, the dismissal may be considered unjustified and the employee may be entitled to compensation.
Unjustified Dismissal
In Latvia, if an employee is dismissed without justification, the employer may be required to pay compensation. The amount of compensation depends on various factors such as the employee’s length of service, the reason for the dismissal, and other relevant circumstances. The compensation may include a severance payment, unpaid salary, and other related benefits. The exact amount of compensation is determined by the court, but it cannot exceed the equivalent of 24 months’ salary.
In case of contract termination, the employer must pay any outstanding salary, as well as compensation for any unused vacation days, and any severance pay owed to the employee. The amount of severance pay depends on the reason for termination and the length of the employee’s service, and is usually calculated as one month’s average salary per year of service. Additionally, the employer must pay any outstanding social security and tax contributions on behalf of the employee.
Minimum Notice Period
The minimum notice period for termination of employment depends on the length of service of the employee.
• If the employee has worked for less than 5 years, the notice period is 1 month
• If the employee has worked for 5-10 years, the notice period is 2 months
• If the employee has worked for more than 10 years, the notice period is 3 months
The notice must be in writing and must be given in advance.
Immigration
Visa process
1. The process involves applying for a visa at the nearest Latvian embassy or consulate.
2. Once the visa is granted, the foreign national can travel to Latvia and begin work.
Visa documents
• Valid passport
• Work contract or a job offer from a Latvian employer
• Proof of accommodation
• Evidence of sufficient financial means to support themselves in Latvia
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