G-P’s Employer of Record (EOR) model allows your company to start hiring talent in minutes via our global entity infrastructure. Unlike a Professional Employer Organization (PEO), G-P allows your company to expand your global footprint without the hassle of entity setup and management.
Our global employment products, including G-P Meridian Prime™ and G-P Meridian Core™, are backed by the largest team of HR and legal experts in the industry. We handle the growing complexities of compliant global expansion — so you can focus on opportunities ahead.
As a global EOR expert, we manage payroll, employment contract best practices, statutory and market norm benefits, employee expenses, as well as severance and termination. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. G-P allows you to harness the talent of the brightest people in 180+ countries around the world, quickly and easily.
Hiring in Latvia
When negotiating terms of an employment contract and offer letter with an employee in Latvia, it may be useful to keep the following in mind.
Employment contracts in Latvia
In Latvia, there are 2 main types of employment contracts that can be used:
- Open-ended employment contract – the standard type of employment contract in Latvia, which is used for indefinite employment.
- Fixed-term employment contract – this contract type is used in cases of seasonal work, employment where contract length must be specified, replacement of an absent employee, casual work not performed in the company, emergency work, and special industries, amongst other specific instances.
A fixed-term contract cannot exceed 2 years. In limited cases maximum length can be 5 years.
Working hours in Latvia
In general, employees in Latvia work 40 hours per week with 5, 8-hour days. The day before a holiday is generally reduced by 1 hour.
Holidays in Latvia
Latvia celebrates 12 national holidays:
- New Year’s Day
- Good Friday
- Easter Sunday
- Easter Monday
- Labor Day
- Restoration of Independence
- Midsummer
- Proclamation Day of the Republic of Latvia
- Christmas Eve
- Christmas Day
- Boxing Day
- New Year’s Eve
Vacation days in Latvia
Employees are entitled to at least 4 weeks (20 days) of paid annual leave.
Latvia sick leave
Employees are generally eligible for 10 days of employer paid sick leave. The 2nd and 3rd days should be paid at no less than 75% of regular wages, and the 4th through 10h days at no less than 80%. The State Social Insurance Agency pays for sick leave from the 11th day through 26 weeks at 80% of the regular wages.
Maternity and paternity leave in Latvia
Expecting employees are generally entitled to 112 days of maternity leave: 56 before the birth and 56 after, although the employee has the option to use all 112 days at any time. Social insurance covers the employee’s wages during leave if they are insured.
Fathers are generally entitled to 10 days of paternity leave that can be taken within 2 months of the child’s birth. In general, employees are entitled to parental leave of up to 18 months until the child turns 8. The leave can be taken in full or in parts and is separate from maternity and paternity leave.
Health insurance in Latvia
Latvia has universal healthcare funded by the government, with pay-for-fee service subject to an annual cap.
Latvia supplementary benefits
Common employee benefits include supplemental health insurance and a company car.
Termination/severance in Latvia
In Latvia, employment contracts are usually made for an indefinite period of time since fixed-term agreements are strictly monitored by Latvian labor legislation. Usually, fixed-term contracts can be for a maximum of 2 years ( and in rare cases 5 year) after which it turns into a permanent contract.
Probationary periods of up to 3 months are permitted.
Employees may generally be terminated for cause as outlined in the Labor Law with written notice. The notice period depends on the reason for dismissal and generally ranges from 10 days to 1 month.
Employees are generally eligible for severance payment as follows:
- Up to 5 years of service: 1 month’s wages
- 5-10 years of service: 2 month’s wages
- 10-20 years of service: 3 month’s wages
- 20+ years of service: 4 month’s wages
In general, employees can terminate employment with 1 month’s written notice.
Paying taxes in Latvia
Employers are generally required to withhold 20% to 31% of wages for income taxes. A social security contribution of 23.59% is required from employers and 10.5% from employees.
Why G-P?
At G-P, we help companies unlock the power of the everywhere workforce through our industry-leading global employment platform. Let us handle the complex and costly tasks involved in finding, hiring, onboarding, and paying your team members, anywhere in the world, with the speed and guaranteed global compliance your business needs.
Contact us today to learn more.