Workforce in Latvia
The potential workforce of Latvia is 1 271 040 people, approximately 64% of the total population. This includes all the people from 15 to 64 years old. Out of them, 61%, that is 775 334 people are employed. The total unemployment in Latvia is 9.5%.
Education and skills
Primary education is a general requirement (both socially and professionally) for Latvian workforce, which is why the primary education attainment rate is 98%. Latvian primary education system consists of 4 classes of primary education, 5 years of lower/unfinished primary education and 3 classes of either primary or vocational/technical education. About 40% choose to enroll in a vocational/technical institution and receive a professional/specialized primary education. The other 60% choose standard primary education. Professional/specialized primary education is highly sought for in cities having a developed specialized industry, e.g. railroad industry jobs in Daugavpils, which is a major railroad hub between the EU and Russia.
Higher education is not a universal requirement for Latvian workforce, but is needed to perform specialized, skill-reliant and academic jobs. Higher education is attained by 21% of Latvians. It is provided by 58 higher and professional education institutions. Out of the total working age population, 40% possess high level of specialized or academic skills, whereas 87% are medium-skilled.
Wages
The minimum wage in Latvia is 370 EUR/month before taxes (gross salary). The average gross salary is approximately 800 EUR/month, according to various estimates. The Central Statistical Bureau of Latvia estimates the average gross salary to be 818 EUR/month. Statistics show, that on average wages in Latvia grow by about 3 - 7% each year, starting from 2012.
As for the net salary, in general, it comprises about 55% of the gross salary. That is, 45% of the gross wage is paid as taxes by the employer, and the employee receives 55% of what his/her salary is 'on paper'. It also means, that a minimum wage of 370 EUR will cost 457.64 EUR for the employer and will generate 272,24 EUR for the employee. These calculations, however, do not take such variables as tax reduction for dependents in the employee's family. For each supported dependent the tax base is reduced by 175 EUR (2016), e.g. the minimum wage of 370 EUR will now generate 312.49 EUR for the employee who has one dependent person, 331.15 EUR for 2 dependent persons, etc. To learn more about how salary taxes work in Latvia, please refer to this article about business taxation in Latvia.
Working time
Latvian laws allow for different types of working time: standard, shortened standard, part-time, shifts, night and summarized working time. A shortened working time is the one shorter than the standard workweek. Day and night shifts, as well as the summarized working schedule can be applied, if the working process cannot be stopped or if it is not possible to enact the standard schedule. In any case, the working time must be mentioned in the employment agreement, and the working hours should be calculated and documented by the employer.
The standard working time in Latvia is 8 hours a day and 40 hours a week. The usual workweek is from Monday to Friday, but this is not obligatory, as some companies, such as shops, are also open on Saturdays and Sundays. In case of the summarized working time, the total working time must not exceed 160 in 4 weeks - this allows shifts for over 8 hours a day and 40 hours a week while still ensuring that employees are not overworked.
Overtime work
Overtime work is allowed by Latvian laws, but it must be in accordance with the following principles. First, it must be agreed upon by both the employee and the employer in writing. The agreement should contain the amount of overtime and remuneration. According to the Labour law
, the amount of overtime cannot exceed 144 hours in 4 months. Besides that, the 68th paragraph of the law stipulates, that the employer must pay at least 100% of the regular hourly, weekly or piecework wage as a remuneration for the overtime.
It should be noted, that if an employee works more than it is stipulated by the employment contract but according to a shortened schedule, such an additional work is not considered to be an overtime work. Nevertheless, the employee in this case is entitled to request compensation for working more than he/she should, but the amount of compensation is not regulated by the law.
State Pension Age
The State Pension age in Latvia is 62 years and 9 months in 2016. Recently the government of Latvia has decided to increase the State Pension age from 62 to 65. This is done in a gradual manner - in 2014 the State Pension age was 62 years and 3 months, and each year up to 2025 the age will increase by 3 months, thus reaching 65. The State Pension age is also decreased in some cases: harmful working conditions (as defined by law), medical conditions such as physical disabilities and raising multiple children or disabled children for women.
