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Latvia
The Republic of Latvia is a country in the Baltic region of Northern Europe. It is bordered by Estonia to the north, Lithuania to the south, Russia to the east, and Belarus to the southeast.
POPULATION
1,84 million inhabitants
CURRENCY
Euro (EUR)
GDP
$52.25billion
MINIMUM MONTHLY WAGE:
780 EUR
TIME ZONE
UTC +2
Latvia is a small, open economy where exports account for a large share of GDP. According
to the latest forecast from the European Commission, economic growth is expected to continue recovering in 2026, with GDP projected to expand moderately following weak performance in 2024 and gradual improvement in 2025. Growth is supported by stronger private consumption, increasing investment, improving export demand, and easing inflation across the euro area. The labour market remains relatively stable, with unemployment projected at around 6–7% and wages
continuing to rise, supporting household incomes. At the same time, higher public spending, including defence and EU-funded investments, is expected to influence fiscal balances. Overall, Latvia’s economy in 2026 shows moderate growth momentum, supported by domestic demand and a gradual recovery in external markets, while geopolitical and structural challenges remain relevant factors.
- Employment contract. Is concluded between an employer and an employee and contains rules and regulations the employee must abide in exchange for a salary and a safe and good working environment. A labour contract must be concluded in writing.
- Open ended contract.
- Fixed term contract.
Regular weekly work time – 40 hours.
The overtime for each employee shall not exceed four hours in two successive days and 120 hours a year. The duty of the employer is to precisely register the overtime work of each employee.
A five-day working week must be established for the employee. If due to the nature of the work it is impossible to establish a five-day working week, the employer after consulting with employees’ representatives may establish a six-day working week.
Each employee is entitled to a paid annual vacation of no less as four calendar weeks. By employee and employer agreeing the paid annual vacation for a current year can be granted in portions, however, one of the portions of the vacation for the current year cannot be shorter as two subsequent calendar weeks.
Additional annual leave days should be granted (in accordance with the reasons specified in the legislation)
Among the most typical fringe benefits granted to employees (though not provided under the local legislation) in Latvia are:
➢extra holiday pay;
➢medical insurance.
➢ allowance: phone, car, gym and etc.
1. By the employer’s initiative.
A labour contract which has been concluded for an indefinite period of time, as well as a labour contract concluded for a definite period of time may be terminated by the employer before the expiry of its term only in the following cases:
1) if the enterprise, institution or organization is being liquidated;
2) if it has been established that the employee lacks the necessary professional skills or cannot continue the respective work due to health reasons;
3) if without valid reasons thereto the employee does not cope with this duties he is entrusted with in accordance with the labour contract or the local labour regulations;
4) if due to a temporary disablement the employee does not attend work for more than 4 months in succession, except for the maternity leave, – unless the laws stipulate a longer period for the preservation of work (position) in specific cases of illness. The employees who have lost working ability due to a trauma or professional illness contracted at work, shall keep their work (position) until the recovery of working ability or determination of the degree of the handicap;
6) if an employee, who formerly performed the work, is reinstated;
7) if the employee attends work intoxicated by alcohol, narcotic or toxic substances;
8) if the employer’s property has been plundered (small-scale theft included), and as such been recognized by an effective court judgement or decision of an institution which has the right to investigate the case.
2. By mutual agreement.
Employee and employer can terminate legal labour relations by agreeing mutually in writing.
3. By employee’s initiative.
Employee has the right for a month in advance to give a notice to the labour contract in writing, unless a shorter period for giving notices is established in the labour contract or in the collective agreement.
The employee is entitled to severance pay in certain cases of dismissal, including redundancy due
to a reduction in numbers of employees. If a collective agreement or the employment contract does not specify a higher severance pay, the employer must pay a severance pay of the following amounts:
➢ one month average earnings if the employee has been employed by the employer for less than five years;
➢ two months average earnings if the employee has been employed by the employer for five to 10 years;
➢ three months average earnings if the employee has been employed by the employer for 10 to 20 years; and
➢ four months average earnings if the employee has been employed by the relevant employer for more than 20 years.
➢ If the labour contract is terminated due to the non-compliance of the labour contract to the requirements set forth in the regulations on labour protection, the firing benefit shall amount to not less than the average wage of six months.
01 – Jan: New Year’s Day
03 – Apr: Good Friday (Western Church)
05 – Apr: Easter Sunday (Western Church)
06 – Apr: Easter Mondays (Western Church)
01 – May: Labor Day
04 – May: Independence Restoration Day
First Sunday in May: Mothers’ Day
23 – Jun: Midsummer’s Eve
24 – Jun: St John’s Day
18 – Nov: Independence Day
24 – Dec: Christmas Eve
25 – Dec: Christmas Day
26 – Dec: 2nd Day of Christmas
31 – Dec: New Year’s Ev
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