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Undoubtedly, payroll is a critical process for any organization. The pay cycle in Latvia refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.

In Latvia, it is common for employees to be paid on a monthly basis, at the end of the month.

There is no statutory requirement to provide the 13th salary.

Minimum Wage in Latvia changed from EUR 620 to EUR 700 in 2024.

Overtime is defined as work performed outside of regular working hours or on a public holiday that must be compensated with 200% of regular pay or paid time off.

Employers generally must pay overtime for work performed in excess of eight hours in a 24-hour period or 40 hours in a week. Employers must compensate employees with double pay for overtime work or work on a holiday. The maximum amount of overtime work allowed is an average of eight hours in a seven-day period, calculated over a period of up to four months. Employers and employees generally must agree upon overtime work in writing.

Employers generally must keep tax records for three years.

Latvia's national government does not assess taxes on employment income other than those covered in the Income Taxes and Social Taxes sections of this primer.

The Constitution of the Republic of Latvia (the "Constitutional Law"), effective as of February 15, 1922, contains a general prohibition of discrimination and also provides that everyone has the right to freely choose their employment and workplace according to their abilities and qualifications.

The code introduces the principle of equal rights to work, fair, safe, and healthy working conditions, and to fair remuneration for the work. No discrimination is permitted between men and women over the terms and conditions of employment. Furthermore, the code makes it unlawful to discriminate on race, age, religion, disability, political or any other belief, national or social origin, property or family status, or other grounds in employment, promotion, and training. It is also illegal to advertise for staff on a discriminatory basis.

Please note that the employer prior to the signing of an employment contract is entitled to request an applicant to present

1. ID document (ID card or passport) for identification purposes
2. A visa or a residence permit if he/she is from a third-country national (non-EU), certifying that the foreigner has been granted the right to employment.
3. Documents that certify his or her education or occupational preparedness.

Optional Document - Health Test Report

When onboarding or during employment, at no point employer may request applicant/employee personal information, which concerns:

1. pregnancy
2. family or marital status
3. previous conviction, except for the cases where this may be of essential importance with respect to the work to be performed (like in education, work with children, police, etc)
4. religious conviction or belonging to a religious denomination
5. affiliation with a political party, employee trade union, or other public organization
6. national or ethnic origin

Probationary periods are quite common in Latvia. They are used by employers in order to determine employee suitability for the position.

The length of the probationary period must be set out in the employment contract. The maximum term allowed by law is three months. This term does not include sickness periods or other justified absences.

The mandatory paid public holidays of Latvia are:

• Jan 1: New Year
• Apr 7: Good Friday
• Apr 9: Easter Sunday
• Apr 10: Easter Monday
• May 1: Labor Day
• May 1: Constituent Assembly Convocation Day
• May 4: Independence Restoration Day
• May 14: Mother's Day
• May 23 and May 24: Midsummer Day
• May 28: Whit Sunday
• May 29: The Day of the Bronze Medal Win
• Nov 20: Republic of Latvia Proclamation Day
• Dec 24: Christmas Eve
• Dec 25: Christmas Day
• Dec 26: Second Day of Christmas
• Dec 31: New Years Eve

Employers pay 75% for the first three days and 80% for days 4 to 10. After ten days, the employee is paid by the government under the Sick Leave benefit for up to 52 weeks.

56 days before and 56 days after a baby's birth, for a total of 112 days at 80% of salary is paid by the government.

Employers must provide employees with 112 days of maternity leave, 56 days of which should be provided before the due date of the child with the other 56 days provided after the birth of the child. These days they are paid 80% of their wages under the social insurance program.

There are 10 days of paternity leave.

There are special provisions introduced in the Labour Law concerning the leave of other persons caring for a child. In accordance with Section 155 of the Labour Law, the father of a child is entitled to leave of 10 calendar days that are granted within a two-month period from the birth of a child.

If a mother has died in childbirth or within a period up to the 42nd day of the postnatal period or up to the 42nd day of the postnatal period has refused to take care and bring up the child, the father of the child or any other person actually taking care of the child is granted leave for the period up to the 70 days of the child's life.

If a mother cannot take care of the child up to the 42nd day of the postnatal period due to illness, injury, or other health-related reasons, the father or another person who actually takes care of the child is entitled to leave for those days on which the mother herself is not able to take care of the child.

In a family that has adopted a child under two months of age, one of the adopters enjoys a leave of 56 calendar days starting from the day of adoption of the child.

Employers generally must provide all employees with at least four weeks of paid annual leave after they have worked for the employer for six continuous months. Three days of additional leave must be granted to employees who have at least three children under the age of 16, or a disabled child under the age of 18, and to employees who are exposed to special risks. At least one day of additional leave must be granted to employees with fewer than three children under the age of 14. If the employer and employee agree, annual leave may be taken in parts, but one part must be at least two weeks.

An annual paid supplementary leave of three working days is granted to employees having three or more children under the age of 16 years or a disabled child and to employees exposed to special risk. A collective agreement or a contract of employment may determine other cases (for instance, night work, shift work, long-term work, etc.) where an employee also receives an annual paid supplementary leave.

Pursuant to Section 157 of the Labour Law, employees are entitled to study leave provided that the work has not been discontinued, that the studies are undertaken at an educational institution of any type, and that such right is provided for in a collective work agreement or a contract of employment. The study leave can be granted either with or without retention of work remuneration. However, if parties to the contract of employment have not agreed on the right to study leave, employers are free to deny attending to studies.

An exception concerns the taking of state examinations. An employee has an obligation to grant study leave for the taking of a state examination or the preparation and defence of a diploma work, which is not less than 20 days a year, paying for such period the average earnings.

Parental Leave
With effect from January 1, 2023

• Parents will be able to receive the total benefit for time period of the 13 months from the day of the child’s birth.
• A recipient of parenting benefit who is employed and not on parental leave or who earns income as a self-employed person during parental leave will be paid 50% of the benefit granted.
   

The length of the notice period depends on the reason for termination.  

1. Immediate termination is required for:

• illegal action by the employee and loss of the employer’s trust
• intoxication during work; or
• inability to perform the work due to state of health.

2. A ten-day notice period is required for:

• a substantial breach of the employment contract;
• actions that are incompliant with good morals;
• substantial violations of labor safety regulations; or
• long sickness periods (more than six months).

3. A one-month notice period is required for:

• lack of professional skills;
• reinstatement of an employee who previously performed the work;
• reduction of staff (redundancy); or
• liquidation of the employer

4. A two-month notice period is required for the termination of a disabled employee if the termination is based on the reinstatement of an employee who previously performed the work, a reduction of staff (redundancy), or a long sickness period (more than six months).

Employees are entitled to terminate the contract with one month’s prior written notice if no shorter period is set out in the contract.

If the employer fails to give adequate notice of termination, the employee may bring a claim for breach of contract. Compensation is calculated by reference to the employee’s contractual entitlement and therefore based mainly on the salary the employee would have received for working during his or her notice period. Claims relating to this may be brought in the civil courts.

• Employees who have been with the company for less than 5 years will receive 1 month's pay
• Employees with 5 to 10 years of service are entitled to 2 months' pay
• Employees with 10 to 20 years of service will receive 3 months' pay
• Employees who have worked for more than 20 years are entitled to 4 months' pay

Employers and employees generally must provide the other party with one month of notice prior to terminating an employment relationship. Employers must give only one day of notice to temporary workers. Shorter notice periods also apply in justified termination cases. Severance payments may also be required.

In addition to giving notice, employers must provide the following minimum severance payments if:

• employed less than five years: one month of average earnings;
• employed at least five years but less than 10 years: two months of average earnings;
• employed at least 10 years but less than 20 years: three months of average earnings; or
• employed 20 years or more: four months of average earnings

Retirement age updates
In 2023, the retirement age will be 64 years and six months, but in case of early retirement – 62 years and six months.
 

Foreign workers generally must obtain entry visas, residence permits and work permits in order to live and work in Latvia. In order to employ foreign workers, employers generally must record the position with the State Employment Agency and submit an invitation request to the Office of Citizenship and Migration Affairs.

Foreign workers must then apply for the necessary permits with their local Latvian diplomatic or consular mission. After receiving the necessary entry visa and work permit documentation, employers must receive and keep work permits on file. Foreign workers generally must acquire residency permits if residing in Latvia for more than 90 days, and must apply for the residency permits at their local Latvian diplomatic or consular mission.

Citizens of the European Union may work freely in Latvia without any visa or permit. They must register with the Office of Citizenship and Migration Affairs if they wish to reside in Latvia for three months or longer.

The employer may use any publicly available information about the applicant but it must not use the information in a discriminatory way. It is generally accepted practice to contact the previous employer to discuss the applicant’s performance while working for that employer. It is also acceptable to ask a candidate to provide written references from previous employers.

Employers may only request information about criminal background and carry out searches for substance abuse where the law expressly allows this. This occurs only where this information is crucial for the performance of the work, for example, when hiring a police officer or firefighter.

It is the applicant’s duty to inform the employer about his or her state of health to the extent this is relevant to the performance of the job. Employers may request that the applicant undergo a health examination in order to check whether he or she is able to perform the intended work. In the medical statement regarding the applicant’s state of health, the physician must indicate only whether the candidate is suitable and provide suggestions to improve the work environment. The physician must not provide any detailed information about the applicant’s health or medical history.

Employers are entitled to verify the information provided by applicants during job interviews by, for example, requesting documents showing proof of education. The information obtained during the job interview, as well as other documents received during the hiring process, may only be passed on to the individuals in the organization who are involved in making hiring decisions. Information may be passed on to third parties only with the applicant’s consent, as with external verification of references, for example