HR Software for Latvia

Leave Policy

Maternity Leave

Pregnant employees are entitled to 112 days of paid leave. 56 days must be taken before the birth of the child. 56 days must be taken after the birth of the child. The employee receives 80% of her average salary.
The average salary is calculated for a period of 12 months, ending two months before the vacation is taken. The State Social Security Administration (SSA) is responsible for this compensation.
The employee can extend the vacation by taking parental leave.

You can use the leave module in IceHrm to manage maternity leave in Latvia.

Paternity Leave

Employees are entitled to 10 working days of paid paternity leave. The employee receives 80% of the employee’s average salary. The State Social Security Administration (SSA) is responsible for this compensation. The leave is granted immediately after the birth of the child, but must be taken no later than 6 months after the birth of the child.

The employee can extend the vacation using parental leave.

Parental Leave

From January 1, 2023, employees will be able to choose between two parental leave options:

13 months after the birth of the child at 60% of the employee’s regular salary:
Basic period: 9 months taken by one parent (including maternity leave) until the child is 1 year old.
Non-transferable periods: 2 months taken by the mother and 2 months taken by the father until the child is 8 years old.
19 months after the birth of the child, which is paid at 43.75% of the employee’s regular salary:
Basic period: 15 months taken by one parent (including maternity leave) until the child is one and a half years old.
Non-transferable periods: 2 months from the mother and 2 months from the father until the child reaches the age of eight.

The basic period (9 or 15 months) can be used by one parent. The non-transferable period must be taken until the child reaches the age of 8 and must be used by both parents.

The state Social Security Administration (SSA) is responsible for payment.

Sick Leave

Employees in Latvia are entitled to an unlimited number of sick days, but no more than 52 consecutive weeks. If an employee has been on sick leave for six consecutive months or a total of one year within three years, the employer may dismiss the employee, even if he or she is sick at that time, and terminate the employment relationship after ten days.

Sick leave is paid as follows:

Day	Pay (% of salary)	Payer
Day 1	Unpaid	N/A
Days 2 and 3	75%	Employer
Days 4 – 9	80%	Employer
From day 10 to 26 weeks*	80% of the average salary	State Social Security Agency

*In serious medical cases, vacation can be extended up to 52 weeks with the same pay.

Pay & Tax

Minimum Wage Requirements

The minimum wage is EUR 700 per month from January 1, 2024

Individual Income Tax

Individual income tax is between 20% and 31%. Income tax is calculated at progressive rates.

Gross Annual Income (EUR)	Tax Rate (%)
Up to EUR 20,004	20%
EUR 20,004 – EUR 78,100	23%
Above EUR 78,100	31%

Payroll Cost

Employer costs are generally estimated at 24% of employee salary.

Employer’s social security contribution – 23.5%
Health and safety training – 5 EUR
Business risk fee per employee – EUR 0.36

Please note: The employer’s social security contribution may change if the employee receives an old-age/disability/service pension from the state.

Overtime Pay & Maximum Hours

Pay for overtime is mandatory. Hours outside of normal working hours are considered overtime. Employees can work a maximum of 8 hours of overtime per week.

Overtime may not exceed 48 hours per month and 200 hours per year. For additional hours, employees receive a minimum supplement of 100% of the hourly or daily wage rate.
Normal working hours are eight hours per day and 40 hours per week. The normal working week lasts from Monday to Friday.

Termination

Termination Requirements

Dismissals must take into account complex rules and the regulations of the country in which an employee is employed. Off-boarding is always carried out by the employer with the main participants. It may include ad hoc fees as well as required or recommended steps for specific termination cases.

Layoffs in Latvia can be complex. In Latvia, employers cannot terminate at their own discretion outside of the probationary period and the termination must be for a valid reason.

Proper terminations include:

Voluntary by the employee
By mutual agreement
Unilaterally by the employer (the reasons are specified in the Labor Code in Section 101)

Notice Period

The minimum notice period is one month and can be shortened if this has been agreed in the employment contract.

Severance for Employees

In Latvia, all employees who are dismissed for the reasons listed below are entitled to severance pay:

The employee lacks sufficient professional qualifications to carry out the work
The employee is unable to carry out the contracted work due to his health condition and this condition is confirmed by a medical report.
The employee who previously performed the work in question has been reinstated
The number of employees is reduced
The employer is liquidated
The employee is not working due to temporary incapacity for work

The amount of the severance payment depends on the duration of the employment relationship:

Less than five years of employment – one month of average earnings
Between 5 and 10 years of employment – two months of average earnings
Between 10 and 20 years of employment – three months of average earnings
More than 20 years of employment – four months of average earnings

Statutory Time Off

Paid Time Off

Both full-time and part-time employees are entitled to 20 days of paid time off per year. PTO is accrued daily at a rate of approximately 0.08 calendar days per day. Employees are entitled to annual leave after six months of continuous work in the first year.

Public Holidays

There are 15-16 national holidays in Latvia. If the holiday falls on a weekend, the next working day is free.

New year’s Day
Good Friday
Easter Sunday
Easter Monday
Labor Day
Day of the Restoration of Independence of the Republic of Latvia
Mother’s Day
Pentecost
Līgo day (Midsummer eve)
Jāņu day (Midsummer eve)
Final Day of the Nationwide Latvian Song and Dance Celebration
Day of the Proclamation of the Republic of Latvia
Christmas Eve
Christmas Day
2nd Christmas Day (Winter Solstice)
New Year’s Eve

Onboarding

Onboarding takes 3 working days.

Additional Info

Employment Contract Details

The contracts must be drawn up in Latvian and can be bilingual if the employee is a foreigner who does not speak the official language. They must be in writing and signed by both parties.

A contract must contain the following:

Information about the employee (name, ID card number, home address)
Information about the employer (name, ID number, home address)
Start date
Duration of the contract
Place of work
Position according to the classification of professions
Probation period
Amount and timing of salary payment
Daily and weekly working hours
Duration of paid annual leave
Duration of termination

Probation Period

Employees hired through IceHrm are subject to a probationary period of 90 days, which cannot be extended as it is the country’s maximum limit. From January 2022, IceHrm will include a probationary period in all employment contracts.

The probationary period helps employers and employees make sure they are a good fit for each other. This allows the company to quickly decide whether the position is right for them, and the employee can see whether it matches their career goals.