Employer of Record in Latvia

An Employer of Record (EOR) in Latvia is a company that legally hires employees on your behalf. This lets you build a team in Latvia without setting up your own local entity. The EOR handles all the local HR tasks. These include payroll, taxes, benefits, and making sure you follow Latvia's labor laws. For EOR services in Latvia, you can work with a provider like Rivermate.

How an Employer of Record (EOR) Works in Latvia

Using an EOR simplifies hiring in Latvia. Here is how it usually works:

1. You Find the Talent. You recruit and choose the best candidate for your team in Latvia.
2. The EOR Hires Them. The EOR uses its own local legal entity to officially hire your chosen employee.
3. Contracts Are Handled. The EOR creates and manages the employment contract. This ensures it complies with all Latvian labor laws, which you can review on the State Labour Inspectorate's website (https://www.vdi.gov.lv/en/labor-law).
4. Onboarding Starts. Your new team member is onboarded. The EOR sets up their payroll, enrolls them in benefits, and registers them with the necessary tax and social security authorities.
5. You Manage Daily Work. You are in charge of your employee's day to day tasks and responsibilities, just like any other team member.
6. The EOR Manages HR. The EOR takes care of ongoing HR duties like running payroll, handling taxes, and providing local support.

Why use an Employer of Record in Latvia

Using an EOR to hire in Latvia gives your business a significant advantage. You can enter a new market and hire talent quickly without the cost and complexity of establishing a legal entity in the country. This means you can focus on your core business operations while the EOR handles the legal and administrative burdens of employment.

• Hire Faster. You can onboard new employees in a matter of days instead of the months it might take to set up a company.
• Reduce Costs. Avoid the high expenses and administrative headaches of creating a legal entity in Latvia.
• Stay Compliant. EORs are experts in Latvian labor law, so they ensure everything is done correctly, from contracts to taxes.
• Offer Competitive Benefits. Your EOR can provide local benefits packages that help you attract and retain top talent.
• Focus on Your Business. With HR and compliance handled, you can concentrate on growing your business and managing your team.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Latvia includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Latvia.

Hiring in Latvia means tapping into a skilled and often multilingual workforce. The country's business culture is direct and efficient. As a member of the European Union, Latvia's employment laws are well-structured, but you need to follow them carefully. This guide will walk you through the key areas of Latvian employment.

Employment contracts & must-have clauses

You must provide a written employment contract in Latvian. If your employee doesn't understand Latvian, you need to provide the terms in a language they do understand. Contracts are typically for an indefinite period. Fixed-term contracts are only allowed in specific situations and cannot exceed five years.

Your employment contracts must include:

• Your company's name, registration number, and address
• The employee's personal information
• Job start date and duration (for fixed-term contracts)
• Workplace location
• Job title and a description of duties
• Salary and payment dates
• Daily or weekly working hours
• Amount of annual leave
• Notice periods for termination

Probation periods

You can include a probation period in the employment contract to see if a new hire is a good fit. This period cannot be longer than three months. For fixed-term contracts of up to six months, the maximum probation is one month.

During the probation period, either you or the employee can end the employment relationship with just three days' written notice. You don't need to give a reason for termination during this time.

Working hours & overtime

The standard workweek in Latvia is 40 hours, usually split into eight-hour days from Monday to Friday. Employees must have at least 12 hours of rest between workdays and a continuous rest period of 42 hours each week.

Any work done beyond the standard hours is overtime. You must pay employees double their normal rate for overtime hours. Overtime is limited to eight hours per week and 200 hours per year.

Public & regional holidays

Your employees are entitled to paid time off for public holidays. If a holiday falls on a weekend, the following Monday is often observed as a day off.

Here are the public holidays for 2025:

Hiring contractors in Latvia

You can hire independent contractors for specific projects, but you need to be careful about how you classify them. An independent contractor is self-employed and has control over their work. They are responsible for their own taxes and are not entitled to employee benefits like paid leave or sick pay.

Misclassifying an employee as a contractor can lead to serious problems. If authorities determine a worker is actually an employee, you could face penalties, back taxes, and be responsible for unpaid social security contributions. The key factors in determining a worker's status are the level of control you have over their work and how integrated they are into your company.

An Employer of Record (EOR) helps you avoid these risks. An EOR can correctly classify your workers according to Latvian law and ensure they are hired compliantly. This lets you work with talent in Latvia without the risk of misclassification.

In Latvia, handling payroll means understanding and following local laws for paying your employees correctly and on time. You need to consider things like minimum wage, working hours, and taxes. Staying compliant is key, as there are penalties for not following the rules.

Payroll cycles & wage structure

You must pay your employees twice a month. If you and your employee agree in writing, you can switch to a monthly payment schedule. Each payment must come with a payslip that details all earnings and deductions.

Every employee needs a formal employment contract. This contract should be in Latvian and clearly state the employee's salary and other compensation details.

Overtime & minimums

A standard workweek in Latvia is 40 hours, based on an 8-hour workday. Any work done beyond these hours is overtime. You must pay employees 200% of their normal wage for any overtime hours worked.

As of January 1, 2025, the minimum wage in Latvia is €740 per month for full-time work.

Employer taxes and contributions

As an employer, you are responsible for making social security contributions on behalf of your employees.

Employee taxes and deductions

Employees also contribute to social security and pay income tax. You will withhold these amounts from their paychecks.

In Latvia, providing competitive benefits and understanding leave policies is key to attracting and retaining good people. The country's labor laws outline specific minimums that you must provide. Offering more than the basics can set you apart. Think of the mandatory requirements as your starting point.

Statutory leave

Here is a breakdown of the legally required leave entitlements in Latvia.

• Annual Leave: You must provide employees with at least four weeks of paid annual leave per year after they have worked for you for at least six continuous months.
• Sick Leave: Employees can take up to 10 paid sick days. You pay for the second and third day at 75% of their regular salary, and days four through 10 at 80%. From the 11th day, the state's social security system takes over payments.
• Maternity Leave: Female employees get 112 calendar days of maternity leave. Typically, they take 56 days before the birth and 56 days after. The state pays this benefit at 80% of the employee's average wage.
• Paternity Leave: Fathers are entitled to 10 working days of paid leave. They must use this within six months of the child's birth.
• Parental Leave: After maternity leave ends, one parent can take parental leave until the child is 18 months old.

Public holidays & regional holidays

Your employees in Latvia are entitled to a paid day off for the country's public holidays.

Typical supplemental benefits

To be a competitive employer, you should consider offering more than the legal minimums.

How an EOR can help with setting up benefits

Navigating another country's employment laws and benefit expectations can be a challenge. An Employer of Record (EOR) simplifies this process for you.

An EOR already has a legal entity in Latvia, so you don't have to set one up. We handle the complexities of payroll, taxes, and benefits administration, ensuring you comply with all local regulations. We can also advise you on what supplemental benefits are common in your industry to help you attract the best local talent. This lets you focus on managing your team and growing your business.

When an employment relationship in Latvia ends, you need to follow specific legal procedures. Whether the termination is initiated by you or the employee, understanding the rules around notice periods, severance pay, and proper documentation is key for a smooth and lawful process. The process involves a written notice that clearly states the legal grounds for the termination.

Notice periods

When you, the employer, decide to terminate a contract, the notice period usually depends on the reason for termination.

• 10 days: This applies in cases of contract violations or long-term sickness.
• 1 month: This is required for redundancies, company liquidation, or if the employee lacks the necessary skills.

If an employee resigns, they must provide one month's written notice, unless your contract states otherwise.

Severance pay

Employees may be entitled to severance pay if you terminate their contract for reasons not related to their misconduct. The amount is based on how long they have worked for you.

How Rivermate handles compliant exits

Navigating employee exits in another country can be complex. We make sure every termination is handled correctly and in compliance with Latvian labor laws.

Here is how we simplify the process:

• Legal Compliance: We ensure every step, from notice to final payment, follows the correct legal procedure.
• Clear Documentation: We handle all the necessary paperwork, providing clear, written notices that state the legal grounds for termination.
• Calculations: We accurately calculate severance pay and any other final payments due to the employee.
• Guidance: We provide you with clear guidance throughout the process, so you understand your obligations and the employee's rights.

We manage the details so you can focus on your business.

Navigating the world of Latvian visas and work permits can feel complex. If you're not a citizen of the European Union (EU), the European Economic Area (EEA), or Switzerland, you will need a visa to enter the country and a residence permit to live and work here. For long-term employment, you'll typically need a long-stay (Type D) visa to enter Latvia, which allows you to then apply for your residence permit upon arrival. The residence and work permits are often processed together.

Employment visas & sponsorship realities

An Employer of Record (EOR) can sponsor work permits for foreign employees, but they must have a legally registered entity in Latvia. This is the most common path for companies hiring full-time international talent. Independent contractors, however, typically handle their own visa applications and do not require employer sponsorship.

Here are some practical routes for working in Latvia:

• EU Blue Card: This is for highly skilled professionals. To qualify, you need a university degree or at least five years of professional experience. Your salary must also be 1.5 times the national average. An advantage of the Blue Card is that you don't need to register the job vacancy with the State Employment Agency.
• Digital Nomad Visa: If you work remotely for a company registered in an OECD country, you may be eligible for Latvia's digital nomad visa. This visa allows you to live in Latvia for up to one year, with the possibility of extending for another year. You'll need to prove a minimum monthly income to qualify.

Business travel compliance

For short business trips, you will likely use a Schengen (Type C) visa. This visa allows you to stay in the Schengen Area, which includes Latvia, for up to 90 days within a 180-day period.

Keep these points in mind for business travel:

• A work permit is not required for business visits that do not exceed 14 days within a 180-day period.
• For stays longer than 14 days, you will need a visa that grants the right to employment.
• When you apply for a short-stay visa, you will need to provide several documents, including proof of your travel arrangements, accommodation, and the purpose of your visit.