Latvia
Draft Law “Amendments to Labor Law” (24-TA-3042)
Impact date: The Draft Law was prepared by the Ministry of Welfare on 18 March 2025. It is currently submitted to Saeima (the parliament of the Republic of Latvia) for first reading in November, 2025. Currently, there are ongoing discussions regarding the overtime pay rate, with a proposal to set overtime compensation at 50%, maintaining the possibility of setting higher overtime rates in collective agreements. There are also suggestions on removing the provision that prohibits terminating the employment of a trade union member without the union’s consent. Additionally, there are proposals to establish a one-year validity period for collective agreements after their expiration, as well as to introduce a six-month notice period for terminating contractual obligations. The Government's proposal to set a lower overtime rate in collective agreements is not supported in the discussions.
There is currently no provisional date as to when (if) the Draft Law will enter into force.
The Draft Law was developed to improve the regulation of employment relations, addressing key areas such as the employee's right to refuse work and terminate the employment contract in cases of wage non-payment, overtime, idle time, part-time work, collective agreements, and periods of incapacity for work. It also aims to reduce formal requirements imposed on employers, without compromising the overall level of legal protection for employees.
The proposed key amendments are as follows:
- The employee will have the right to terminate the employment contract immediately if the agreed or legally mandated salary is delayed by more than two weeks beyond the scheduled payment date and will be entitled to receive severance pay
- Periods during which an employee is on sick leave to care for a sick child will not be counted towards the time that entitles the employer to terminate the employment contract
- The amount of overtime pay may be reduced to 50% or 75%, but only through a collective or general agreement, and only if certain conditions are met
- An employee and employer may agree to a four-day working week either at the time of signing the employment contract or during the term of an existing contract. This means that an employee could agree to work ten hours per day from Monday to Thursday, with Friday off
- If a new collective agreement is not concluded within two years after the expiry of the previous one, either party has the right to unilaterally withdraw from the agreement’s application, provided that the other party is given six months’ written notice in advance
- If the downtime exceeds five consecutive working days, the employer may reduce the compensation paid during this period to 70%, provided that the employee’s retained remuneration does not fall below the minimum monthly wage, pro-rated according to the agreed working hours. If the downtime lasts more than four consecutive weeks and the employee does not agree to the reduction in downtime compensation, they will have the right to terminate the employment contract immediately
Employer implications/action needed N/A
Employer risk N/A
Amendments to Law on Remuneration of Officials and Employees of State and Local Government Authorities
Impact date: Amended on 16 October 2025, enters into force on 1 January 2026. The amendments provide for severance pay for executive directors of local Government authorities, leaving them in office due to the expiration of their term of office in order to ensure equal conditions in the process of termination of employment relationships.
The amendments also provide for a higher allowance for diplomatic and consular service officials (employees), as well as soldiers who are at risk of hostilities, violence, unrest or natural disasters at their place of duty, as well as improved regulations setting conditions for compensation of travel expenses for officials who perform their service (work) duties abroad.
Another purpose of the amendments is to prevent diversity when determining the remuneration of medical professionals and to strengthen the performance of the basic functions of the Emergency Medical Service and its readiness for urgent and extraordinary crisis situations. The amendments will improve the regulation that determines the remuneration to military personnel and soldiers and the conditions for its granting. And lastly, they will ensure legal clarity regarding the reorganization of the State Revenue Service and the establishment of the Tax and Customs Police.
Employer implications/action needed State and Local Government Authorities as employers will need to review their internal working policies to comply with new amendments.
Amendments to Regulations on the amount of the minimum monthly wage within normal working hours and the calculation of the minimum hourly rate
Impact date: Amended on 19 November 2025, enters into force on 1 January 2026. The amendments determine new minimal wage within normal working hours in an amount of €780.
Employer implications/action needed This must be taken into account when determining employee wages.
Contact
Jānis Siliņš Head of Employment, Senior Associate, Attorney at Law
E: janis.silins@eversheds-sutherland.lv T: +371 26 330 394
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