Quick facts

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Latvia, a Baltic nation in Northern Europe, has a growing economy with strengths in sectors like manufacturing, information technology, and finance. The country is part of the European Union, providing businesses access to a larger market. Latvian labor laws are designed to ensure fair working conditions, with strict requirements for contracts, work hours, and employee benefits.

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Employment Contracts

In Latvia, employment contracts must be in writing and concluded before an employee begins work. Contracts are generally for an indefinite period, but fixed-term contracts are permitted for up to 5 years if justified, such as for seasonal work. Fixed-term contracts specify either an end date or conditions for termination.

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Probation Period

Latvian labor law allows for a probation period of up to 3 months to assess an employee’s suitability. If a probation period is not specified in the contract, the employment is assumed to be without probation.

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Working Hours

The standard workweek in Latvia is 40 hours over 5 days, with each workday capped at 8 hours. In cases where a 5-day workweek is not feasible, a 6-day workweek can be set, with workdays not exceeding 7 hours. Overtime requires written consent and must be compensated at a minimum of 100% of the regular wage.

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Vacation Days

Employees in Latvia are entitled to 4 weeks of paid annual leave, which excludes public holidays. With mutual agreement, annual leave may be split, but one portion must be at least 2 uninterrupted weeks. Unused leave cannot be compensated in cash, except upon termination.

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Sick Leave

For sickness absences, employers pay 75% of average earnings on the second and third days and 80% from the fourth to the tenth day. Starting from the eleventh day, payments are covered by the state social insurance agency.

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Wages and Salary Payment

Salaries are typically paid monthly or semi-monthly. In 2024, the minimum wage for EU citizens was €700 gross per month. For non-EU citizens, it varies based on their work permit type: regular permits or the EU Blue Card holders.

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Public Holidays

Latvia has 15 official public holidays, including:

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• January 1: New Year's Day
• May 1: Labour Day
• November 18: Independence Day
• December 24-26: Christmas

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Additional days, such as Good Friday and Easter Monday, are observed in spring, while Midsummer’s Eve and Janis Day celebrate Latvian culture in June.

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Employer Taxes

Employers in Latvia contribute 23.59% of an employee's gross salary towards social security, along with a 0.36 fixed business risk fee.

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Employee Taxes

Employees pay 10.5% social tax and 20-23% income tax on their earnings, with the rate varying based on income level.

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Notice Period

Employees can resign with 1 month’s written notice. For terminations during probation, either party can give a 3-day notice. If an employee has a compelling reason related to morality or fairness, they can terminate the contract immediately.

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Termination and Severance Pay

Termination is typically by mutual agreement. Severance pay may range from 0 to 3 months' gross salary, depending on negotiations and the termination grounds. Fixed-term contracts end on the expiration date unless otherwise agreed. Parents or guardians may request termination for employees under 18 if work conditions threaten their well-being.