Hiring guide in Latvia

What should I know about hiring in Latvia?

If you’re considering hiring in Latvia, you should know a few things. It’s vital first to know your audience and the Latvian market well. The second step is to incorporate a company in Latvia or work with an employer of record (EOR). 

Thirdly, you’ll need to secure all obligatory licenses and permits to run your enterprise legally. All employees in Latvia are guaranteed by law to receive a minimum wage, to work in a safe environment, and to be free from discrimination. 

Latvia is a European Union member, which has implications for businesses looking to hire in the country. Several rules and regulations need to be followed when it comes to hiring EU citizens.

Why is Latvia a good choice for finding remote employees?

There are several reasons Latvia is a great place to look for remote workers. Firstly, a highly educated labor force is one advantage the country possesses. In fact, more than half of the people in the country have some level of higher education. 

That’s great news for businesses looking for remote workers, as it means they have their pick of many competent individuals. Latvia’s infrastructure is another positive factor in the country’s favor as a remote worker destination. 

The infrastructure in Latvia is relatively advanced and includes advanced methods of communication and access to fast and reliable online data. Finally, Latvia’s convenient location makes it a top destination for employers seeking remote workers.

How can Native Teams help you hire in Latvia?

As your business grows, you may need additional staff to keep up with demand. However, it can be challenging to know where to start if you’re unfamiliar with the Latvian job market. When it comes to hiring in Latvia, Native Teams can be a great asset. With our Employer of Record services, we can help you hire the most suitable candidates for your open positions. In addition, it can be helpful to have Native Teams on your side to ensure that your company complies with all the Latvian hiring laws and regulations.

Hire your first Latvian employee with Native Teams.

Legal requirements for hiring in Latvia

Considering the importance of comprehending and adhering to Latvia’s hiring laws, we’re exploring the most significant ones applicable to both employers and employees.

Legal framework

Types of employment contracts

Employment contracts in Latvia are typically categorised into two types – open-ended contracts and fixed-duration contracts, which can be further categorised as full-time or part-time. 

An indefinite employment contract, also known as an open-ended contract, is the type that doesn’t specify a fixed period of employment. This type of contract offers ongoing employment without a predetermined end date, providing long-term job security for the employee.Fixed-term employment contracts have a limited duration defined in advance between the employer and the employee. These contracts don’t provide long-term employment stability, as they are most commonly used for temporary or project-based job arrangements.

Content of an employment contract

Employment contracts in Latvia must include key personal details like the employee’s personal information, including name and surname, personal identity number, and place of residence, along with the employer’s name, registration number, and address. 

In addition to this, the contract should specify the start date of the employment, the expected duration, the workplace, and details about the employee’s occupation. Contracts must also outline the remuneration amount, time of disbursement, and the agreed-upon daily or weekly working hours.

 Download a free employment contract for Latvia through Native Teams.

Oral, written or electronic employment contracts

Following Latvia’s employment regulations, employment contracts must be in writing to ensure that both parties have a clear and formal understanding of the employment terms and conditions. If the employment contract is not in written form, employees have the right to request one. If the employer fails to provide it or provides a different employment duration, the employee is deemed employed for three months with set hours and wages. 

However, the lack of a written contract doesn’t compromise the validity or existence of the employment relationship.

Working hours

The full-time working hours of an employee in Latvia can’t exceed eight hours per day or 40 hours per week. If the employee is working six days per week, the daily working time must not exceed seven hours.

The working time of the employee must be specified in the employment contract. If not specified, it is considered that the full working time is 40 hours per week.

Night work

Night work in Latvia is defined as any work conducted for more than two hours during the night, which is the period between 10 pm and 6 am. In regards to this, a night shift employee is anyone who regularly works at night for at least 50 days in a calendar year. For these employees, the regular daily working time is reduced by one hour unless the employee already has shortened working hours.

Breaks and types of leaves

Employees who work at least six hours a day have the right to rest (break) of at least 30 minutes every working day unless otherwise specified by a special law. The break shall be granted not later than four hours after the start of the working day. 

During each period of 24 hours, employees have the right to a daily rest of at least 12 hours continuously. However, when it comes to the weekly rest period, it should not be less than 42 consecutive hours within a seven-day period.

If a working week of five days is specified, employees must be granted two weekly rest days. However, for a working week of six days, employees are entitled to one weekly rest day.

Annual leave

Workers in Latvia have the right to an annual leave of at least four weeks for each calendar year.

However, employees who are employed for the first time or who have a break between two employment relationships of more than eight days have the right to a full annual leave after six months of continuous employment with the employer. 

Employees who have not fulfilled the condition for acquiring the right to full annual leave are entitled to a proportional part of the annual leave, which is determined for the duration of 1/12 of the annual leave for each month of employment. 

If both parties agree, the paid annual leave of the current year can be granted in parts. However, one part of the leave in the current year must not be less than two uninterrupted calendar weeks.

Public holidays

Latvia’s law regulations recognise 13 public holidays, among which are New Year’s Day, Good Friday, Easter Days, Labour Day, Proclamation of the Republic of Latvia, Christmas Days, and others.

Salary

The minimum wage in Latvia is determined by a variety of legislative acts prohibiting any company from paying its employees below the guaranteed rates.

As of 2024, the minimum wage in Latvia is 700 euros per month, reflecting an increase of 80 euros or 12.9% compared to 2023.

To calculate the salary and taxes in Latvia, click here.

Sick leave

The State Social Insurance Agency of Latvia covers sick leave starting from the 11th day, paying 80% of regular wages for up to 26 weeks. 

The sickness benefits are granted based on a work incapacity electronic form issued by a doctor. These benefits are granted for employees who have paid social insurance contributions for at least three months within the period of the last six months or at least six months within the period of the last 24 months before the insurance case occured. 

If the employment relationship is terminated during the period of illness, the sickness benefit will be paid for the 30 calendar days following the end of the employment relationship.

Parental leave

Every employed individual in Latvia has the right to parental leave for up to 1.5 years until the child turns eight. The parental leave can be taken all at once or in parts. The time on leave counts toward total service and the employee’s job must be protected during the leave. Individuals also have the right to parental leave in the case of adoption.

Paternity and maternity leave

Women in Latvia are entitled to 56 days of parental leave before the birth of their child and 56 days of maternity leave after the birth. 

Men in Latvia have the right to a paternity leave of 10 working days, which shall be granted immediately after the birth of the child but not later than within six months of childbirth. The 10 days of paternity benefit is also granted to one of the two adopters of a child under three years. During the paternity leave, the salary compensation is equal to 80% of the salary.

Methods of employment termination

Employment relationships in Latvia can be ordinarily terminated by both the employer and the employee, according to the local regulations established by the Labour Code.

Employment contracts can be terminated upon mutual agreements, due to the expiration of the contract, the employee’s resignation or employee’s notice, the employee’s request during the probationary period, and by a court.

Ordinary dismissal by employer

Employers in Latvia can dismiss employees for a valid reason and give them an appropriate notice period. The ordinary dismissal can be due to a variety of reasons, among which are contract violation, labour regulations violations, lack of adequate occupational competence, reduction of employee numbers, and health incapacity for more than six months. 

The dismissal must be in writing, contain an explanation, and be delivered to the employee who is being dismissed.

Notice period and challenging the dismissal

The notice period in Latvia can vary depending on several factors, from a minimum of 10 days to a maximum of 2 months.

In the case of ordinary dismissal, the notice period is 10 days for cases of violation of employment contracts, acting contrary to moral principles, and violating labour regulations. The notice period can be extended to 1 month if the employee lacks occupational competence, in the case of employee number reduction, and if the employer is being liquidated.

In the case of extraordinary dismissal, there are no notice period requirements. However, the notice period should be at least three days for termination during the probationary period. 

Finally, if the employee dismisses their employment relationship, they must provide a notice period of one month.

Rights and obligations of unemployed individuals

Employees who have worked for at least one year with 12 months of social security contributions in the last 16 months are entitled to unemployment benefits. This rule ensures that only those who have demonstrated a consistent work history and commitment to their social insurance obligations can access these benefits. 

This policy is designed to provide financial support to employees who meet the necessary conditions and have made regular contributions, reinforcing the link between employment stability and benefit eligibility.

Severance pay

Severance pay in Latvia is considered as financial compensation that an employer provides to an employee upon the termination of their employment contract. This payment serves to ensure continued income for the employee and to mitigate the negative impact of job loss.

Hence, severance pay is generally granted to employees whose contracts have been terminated by the employer, except in cases where termination occurs due to behavioural reasons on the employee’s part. This exception ensures that severance benefits are reserved only for those who lose their job through no fault of their own.

Probationary period

The maximum duration for a probationary period in Latvia is three months. However, in cases where a collective agreement with an employee trade union is applicable, the probationary period can be extended up to six months. 

During the probationary period, either party can terminate the employment contract by giving a written notice of three days before the termination.

Prohibition of competition

In Latvia, the prohibition of competition or non-compete clauses is primarily regulated by the Latvian labour law. They serve to prevent employees from engaging in competitive activities that could harm their employer’s business interests, both during and after employment. 

According to these provisions, employees may not, without the employer’s approval, enter into business related to the activity performed by the employer. If the employee acts contrary to the prohibition, the employer may demand compensation for the damage suffered. The employer also has the right to demand that the work be considered as concluded for their company’s account, and the worker must hand over the earnings from such work. The legal prohibition of competition is in force even when it is not contracted.

However, contractual prohibitions may be included in the employment contract, which must be in writing and must not exceed two years from the date of the employment termination.

Intellectual property rights

In Latvian employment contracts, the ownership and management of intellectual property rights typically belong to the employer for work-related creations. However, the specifics can vary, so it’s crucial to include clear contractual provisions addressing the ownership of intellectual property rights, especially in roles that involve creativity, innovation, or research and development.

Employee data privacy

Latvian employee data privacy is governed by GDPR and national laws that complement it.

Employers must have a lawful basis for collecting and processing personal data, such as fulfilling contractual obligations or complying with legal requirements. However, while consent can be a lawful basis, it must be freely given, specific, and informed, obligating employers to avoid relying solely on consent for data processing.

Data minimisation is also a crucial requirement, meaning employers should only collect and process personal data necessary for its intended purpose. Employees should be informed about their collected personal data, the purpose of processing, and their rights regarding their data through a privacy notice.

Remote working policy

Work from home in Latvia can be performed permanently, temporarily, or occasionally if both parties agree on such type of work, which must be documented in the employment contract. 

An employee who works on the employer’s premises can propose an amendment to the employment contract, which would regulate working from home for a certain period of time.

However, in circumstances like disease epidemics, earthquakes, floods, and similar conditions, the employer must agree to work from home without addressing the employment contract to protect the health and safety of employees and other individuals.

Responsibilities within a remote work arrangement

When an employee requests amendments to their employment to include or modify terms related to work-from-home arrangements, the employer must formally respond.

The employer can deny the request only if there are legitimate and justified reasons, such as operational challenges, security concerns, or the nature of the employee’s duties that may not be suitable for remote work. The justification for rejection must be clear, reasonable, and communicated effectively to ensure a fair decision-making process.

Health and safety at home

Under Latvian labour laws, employers must ensure the health and safety of remote workers. Hence, employers must assess the risks associated with the employee’s home working environments, including factors like ergonomics, workspace setup, and potential hazards. They must also provide necessary work equipment that meets safety standards and inform employees about safe working practices.

What are the advantages of hiring employees from Latvia vs other countries?

Hiring employees from Latvia offers a unique mix of advantages and opportunities, especially for companies who look for cost-effectiveness with high-quality work. 

First of all, Latvia has a strong education system with a wide focus on technology, engineering, and language skills. Many Latvians are fluent in multiple languages, including English, German, and Russian, which can be an asset for companies needing multilingual support.

Latvia is also a hub for tech talent, with a growing pool of developers and IT professionals. Many Latvian workers are experienced in programming, software development, and digital services, which makes them valuable for international tech companies.

Lastly, the Latvian work culture blends Eastern and Western European values, resulting in strong work ethics, reliability, and adaptability. Latvian employees are known for their professionalism, dedication, and proactive problem-solving approach, which can align well with companies seeking committed and adaptable team members.

Why use Native Teams for hiring in Latvia?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.