- Overview: Latvia
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Contractor vs. employee: which is better?
Global HR Compliance in Latvia
If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in Latvia Guide below will help you understand the nuances of labor legislation in the country.
When the company is planning to enter a new foreign market of Latvia and has a need to employ a local national there, the first question to answer is how it is going to make local hires.
We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.
This solution helps you employ your global sales force in Latvia as well as in other 180+ countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.
Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.
So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Latvia instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.
Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.
Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in Latvia .
We are experts in global workforce employment in Latvia, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Latvia.
See Hiring and Firing Workforce in Latvia Guide below for a general overview of labor rules and regulations in the country. Or contact us if you need to employ workers in Latvia or would like to get more details.
Hiring and Firing Workforce in Latvia Guide
# Employment Contracts
An employer may enter into an employment relationship with an employee either for a definite period of time or for an indefinite time. For the contract for a definite time (fixed term), the total duration, extensions included, must not be more than 2 years or 10 months within a period of one year in case of seasonal work . Fixed-term contracts are only admitted in a restricted number of cases, they are seasonal work, work in activity areas where a contract of employment is normally not entered into for an unspecified period, replacement of an employee who is absent, casual work which is normally not performed in the company, emergency work in order to prevent the consequences caused by an unexpected event, etc. Fixed-term contracts may also be concluded in special areas such as sports, etc. Employment contract of all type must be concluded in writing form, and in the absence of this, an employee has the right to demand for a written contract. By law, a fixed-term contract should be terminated at the time that has been agreed by the parties of employment. A fixed-term contract automatically transfers to an indefinite contract if an employee continues to work for the employer after the employment contract has been finished.
# Minimum statutory employment rights
# Hours of work
In case of the normal working day, an employee works for up to 8 hours a day and 40 hours a week. Employees who work on risky conditions may work for a maximum of 7 hours a day and 35 hours a week. Employees are entitled to a 42 hour of undisturbed rest per working week. Employees are entitled to work an hour less than their usual working hours each workday that precedes a national holiday.
# Probation period
An employee can be placed on probation period if he/she is 18 years and above. An employer and employee have the right to decide whether to have a probation period before the commencement of the actual employment. When a probation is required, the maximum period of probation must not exceed 3 months. An employee is considered to have passed his probation if he/she continues to work in the company after the agreed probation period has expired.
# Annual leave
All employees in Latvia are eligible to take not less than 4 weeks of annual paid vacation. Employees who have 3 or more children of under 16 years are entitled to extra 3 days of annual paid vacation. This also applies to employees whose job has certain level of risk.
# Parental leave
Female employees are entitled to 112 days of paid maternity leave for childbearing. Employees are required to use half of their parental leave before childbirth and the other half after childbirth. Male employees of newborn babies are entitled to 10 calendar days of paid paternity leave. In case of the death of mother, her working husband is entitled to paid leave until the child is 70 days old. In a family, which has adopted a child between two months and three years of age, one of the adopters shall be granted leave of 14 calendar days. Parental leave benefits are paid by the System of Social Security at 80 percent of normal wage.
# Sick leave
Sick leave benefit in Latvia is paid by the System of Social Security. Employees are entitled to take leave of absence when sick. Sick benefit is paid at 80 percent of normal wage starting from the 11th day of sickness up to the 26th week. In special cases, if the necessity to continue medical care is established, the period of sickness benefit payment can be continued for the period longer than defined 26 weeks, but not longer than for 52 weeks, counting from the first day of incapacity for work if incapacity is continuous. A one-day waiting period applies. The employer pays compensation from the 2nd until the 10th day of incapacity.
Both parties of employment must agree on the conditions of working overtime. According to law, the total amount of overtime an employee can work over a 4-month period must not exceed 144 hours. Employers are under obligation to compensate for every overtime an employee works with a double pay.
# State minimum salary
The minimum wage an employer can pay an employee is €430 ($513) per month since 1 January 2018. Customarily, wages are paid two times per month. An employer may pay his employee once every month if they both consent to it.
# Employment termination
With an exception of temporary employees and those whose contracts are cancelled with a legitimate cause, the statutory maximum period of notice that an employer or employee must provide before terminating an employment contract is one month. Temporary employees are entitled to receive a day notice period before their contract can be terminated. Employees whose contracts are cancelled with a legitimate cause are not eligible for long notice of termination.
In addition, an employer has a duty to pay a redundancy benefit to an employee in the following amounts:
- 1 month of average pay if he has worked less than 5 years in the company;
- 2 months of average pay if he has worked for a minimum of 5 years but less than 10 years in the company;
- 3 months of average pay if he has worked for a minimum of 10 years but less than 20 years in the company;
- 4 months of average pay if he has worked for 20 years or more in the company.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Latvia by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any need to set up a legal entity first or afterwards.