As your Latvia EOR, we would support your growth by contracting personnel and handling their payment without establishing a local branch office or subsidiary.
In compliance with regional labor laws, your individual is employed by an Latvia PEO and can be onboarded in days as opposed to the usual months. Your new employee will start working for you soon, similarly to the rest of your team.
The middle of the three Baltic nations is the country of Latvia, located in northeastern Europe.
On August 21, 1991, Latvia, which had been invaded and occupied by the USSR since June 1940, proclaimed its independence. On September 6, the USSR acknowledged its sovereignty; soon after that, it was admitted to the UN. In 2004, Latvia was granted membership in the European Union (EU) and the North Atlantic Treaty Organization (NATO). Riga is the country’s capital and largest city.
A formal employment contract between the employer and employee is required before the employee can begin working. Before beginning work, a written employment contract must be signed.
In Latvia, employment agreements are typically made for an unlimited period of time. In certain circumstances, such as seasonal or occasional employment, paid public service, etc., it is feasible to reach an employment agreement with a fixed period. A fixed-term employment agreement will specify the date on which the working relationship ends or the events leading to the termination of the specific job. Such an employment contract’s duration is limited to five years.
Following the conclusion of an employment contract, a probation period may be established to determine whether the employee is suitable for the assigned duties. If a probation period is not specified in the employment contract, it is deemed to be ended without one. Probationary periods are limited to three months.
A typical workday cannot last longer than eight hours, and a typical workweek is forty hours.
There are five days in a fixed workweek. If a 5-day workweek is not practicable due to the nature of the work, the employer may establish a 6-day workweek after consulting the employee representatives. The working day cannot be longer than seven hours if a six-day workweek is in effect. On Saturdays, work must end sooner than on other days, and Saturday working hours are specified in the collective agreements.
If the employer and the employee have given their written consent, overtime is authorized.
Paid yearly leave is a right of every employee. The maximum length of this leave is 4 calendar weeks, excluding public holidays.
Businesses are required to give workers 75 percent of average wages on the second and third day of sick leave and 80 percent on the fourth through tenth. Employees may start receiving compensation from the state social insurance agency after their 11th absence.
If additional terms are not specified in the Contract, the salary is typically paid twice a month.
Latvia’s public holidays are:
Social tax: 23.59%
Business risk fee: 0.36 (fixed)
Personal income tax: 20-23%
Social tax: 10.5%
Unless a collective bargaining agreement or employment contract specifies a shorter notice period, an employee has the right to terminate the employment contract by providing advance written notice of one calendar month. Periods of temporary incapacity may, at the employee’s request, be removed from the notice period.
If both the employer and employee agree, an employment contract may be canceled before the conclusion of the notice period.
By mutual consent of the parties. Typically, termination pay ranges from 0 to 3 months of gross salary, depending on the circumstances and reasons for the termination. If both the employee and the employer agree, the employment relationship may be terminated. Such a contract ought to be finalized in writing.
