Latvia is a country situated on the Baltic Sea, bordered by Lithuania and Estonia. It offers a growing, competitive environment for businesses looking to hire abroad, with a skilled workforce of 879.9 thousand people (2024) and an average GDP of 45.54 billion US dollars (2025).

The economy of Latvia is stable, with strong ties to EU markets and key industries such as IT, logistics, manufacturing, and financial services. Latvia is becoming a more popular choice for businesses expanding abroad due to its cost-effective labor in comparison with salaries in Western Europe, EU legal protections, and stable Euro currency.

This help guide will support employers doing business in Latvia by providing a comprehensive overview of Latvian labor laws, from overtime compensation to leave entitlements, plus advice on how RemotePeople can help streamline the hiring process.

Latvia Employment Laws

The Latvian Labour Law of 2001 is the main piece of legislation that informs on the rights and obligations of workers and employers operating in Latvia. It covers employment contracts, working hours, rest periods, and employee benefits.

Other relevant acts that inform on labor laws in Latvia include:

  • Law on State Social Insurance
  • Personal Data Processing Law
  • Law on Trade Unions
  • Immigration Law
  • Law on Maternity and Sickness Insurance
  • Occupational Health and Safety Law
  • Law on the Support for Unemployed Persons and Persons Seeking Employment

When employing workers in Latvia, it’s key to consult legal professionals for advice regarding detailed compliance. This is to ensure that employment practices adhere to the legislation set by Latvian labor laws and simplify the process of hiring in Latvia.

Mandatory Employee Benefits in Latvia

There are many different mandatory employee benefits that companies in Latvia must offer. We’ve detailed the main benefits in the sections below.

Social Security Contributions

Latvia operates under a Social Security program, which is mandatory, and collects contributions from employers and employees to fund coverage for the following departments:

  • Pensions
  • Sickness and Maternity
  • Parental Benefits
  • Unemployment
  • Workplace Injuries and Diseases

The Social Security Rates in Latvia in 2025 are 23.59% for employers, 10.5% for employees, and a minimum of 31.07% for self-employed workers.

Annual Paid Leave

Employees in Latvia are entitled to a minimum of 4 weeks (or 20 working days) of paid annual leave per year, not including public holidays, once they have carried out a minimum of 6 months of continuous service with their employer.

At least one instance of annual leave must be a minimum of 2 consecutive weeks, and a maximum of 2 weeks of annual leave can be carried over to the next calendar year if agreed with the employer.

Working Hours

The typical work week in Latvia is 40 hours, which is normally spread over 5 8-hour work days.

Saturdays and Sundays are usually days off, particularly for public sector employees.

Employees must be given at least 12 hours off between work days and regular breaks throughout shifts.

Hours worked between 10 pm and 6 am are considered night hours. Under 18-year-olds and pregnant/postpartum women are restricted from working night hours, and employees generally have their work time reduced by one hour if they work night shifts. 

Overtime Pay

Any hours worked over an employee’s normal contract are considered overtime and must be paid at an additional rate of 100% of the worker’s normal wage.

Overtime must be agreed mutually between employer and employee, and is limited to 8 hours per week or 200 hours per year. 

Some employees are restricted from working overtime hours, including those under 18 years old, pregnant women, and breastfeeding mothers.

Public Holiday Leave

Many public holidays in Latvia provide workers with a paid day off if the holiday falls on a working day. The public holidays in Latvia are as follows:

  • New Year’s Day (1 January)
  • Good Friday (18 April) (movable date)
  • Easter Sunday (20 April) (movable date)
  • Easter Monday (21 April) (movable date)
  • Labour Day / May Day (1 May)
  • Constituent Assembly Convocation Day (1 May)
  • Independence Restoration Day (4 May)
  • Mother’s Day (11 May)
  • Whitsunday (8 June) (movable date)
  • Midsummer Eve (23 June)
  • Midsummer Day (24 June)
  • Republic of Latvia Proclamation Day (18 November)
  • Christmas Eve (24 December)
  • Christmas Day (25 December)
  • Second Day of Christmas (26 December)
  • New Year’s Eve (31 December)

Sick Leave

Workers in Latvia are entitled to 10 days of sick leave, payable by their employer.

The first day of sickness is generally unpaid, with days 2 – 3 paid at 75% of the employee’s wage and days 4 – 10 paid at 80%. From the 11th day of sickness, the Social Security system provides financial support up to the value of 80% of the worker’s normal salary. This is paid for a maximum of 26 weeks.

A medical certificate is required to be eligible for sick pay; sick leave may extend to 52 weeks over a three-year period upon consultation with Social Security.

Parents are also permitted to take sick leave to care for an unwell child. This is typically granted when caring for a child who is under 14 years of age for up to 14 days if at home or 21 days if in hospital.

Maternity Leave

Female employees in Latvia are entitled to maternity leave if they have a baby.

This consists of 112 calendar days of paid days off, with 56 days taken before birth and 56 taken postpartum.

Maternity leave is typically paid at 80% of an employee’s normal wage, and paid in full by the Social Security system. Workers must tell their employers about their plans to take maternity leave at least 1 month in advance of it commencing.

If medical supervision is present, an additional 14 days of leave may be granted.

Paternity Leave

Male workers in Latvia are entitled to 10 working days of paid paternity leave. This is usually paid at 80% of the worker’s normal wages by the Social Security system.

Paternity leave must be taken within 2 months of the child being born, and may be divided into sections as agreed with the employer.

Severance Pay

Employees are eligible for severance pay in Latvia if their contract is terminated, without the presence of employee misconduct. Severance pay is usually calculated as follows:

Years of Service
Severance Pay
Up to 5 years
1 month’s salary
5 – 10 years
2 months’ salary
10 – 20 years
3 months’ salary
Over 20 years
4 months’ salary

Pensions

Latvia has a three-pillar pension system that provides workers in Latvia with funds upon retirement age.

The first pillar is the state pension, which is mandatory and funded by pay-as-you-go contributions from workers.

The second pillar is mandatory and managed by private fund managers who take a portion of an employee’s gross salary and put it towards an accumulated savings fund, which is subsequently invested.

The third pillar is voluntary, private pension funds that provide extra income for those at retirement age.

Supplementary Employee Benefits in Latvia

Additional benefits are recommended to incentivize employees and increase job applications for new roles. They’ve also been shown to significantly improve staff retention rates.

Some examples of supplementary benefits employers could offer include:

  • Performance bonuses
  • Company car
  • Flexible working arrangements
  • Advanced training schemes
  • Private pension
  • Enhanced leave entitlements
  • Food, transport, or housing allowances

Optimize Employee Benefits with RemotePeople

There is a range of services that RemotePeople can offer to help businesses hire in Latvia.

Our Employer of Record (EOR) services help companies hire workers in Latvia without the need to establish a local entity. The EOR takes on the legal responsibility of employment—managing benefit compliance, tax obligations, and payroll—so your business stays fully compliant while you focus on other priorities.

We can also help with PEO services, including taking on HR, payroll, and additional compliance responsibilities to help ensure your workforce in Latvia works as efficiently as possible.

If you’re looking for direct help with recruitment, we can assist with this too. Our experienced team is fluent in the local language and knows the best places to advertise your job roles to secure the best talent for your business.

Contact RemotePeople today to get a full overview of how we can help your company expand into Latvia.