Recruiting Top Talent in Latvia

Latvian Top Talent

Recruitment can be a tricky business, especially when a company is venturing to unfamiliar countries and exploring new markets. This is where you need a specialist to come in oversee the process for you – Bradford Jacobs’ expertise and over 20 years of experience in international recruitment services is indispensable for international expansion into Latvia.

The Recruitment Process in Latvia

A foreign company expanding into Latvia does not require the assistance of a local entity to hire their employees. It is, however, vital to your recruitment efforts to know where you can find the right talent, as well as which local and international employment organizations they can collaborate with to access the right talent pools. This, however, does not come easily – and once the right employee is found, the employer must follow thorough staffing and registration procedures. These include:

• Registering employees with the Office of Citizenship and Migration Affairs for a Personal Identification Code (PIC) that will be used for all matters of payroll and compliance.
• Registering employees with the State Revenue Service for tax payments.
• Registering with the State Social Insurance Agency (VSAA) to pay social insurance contributions.
• Registering employees with the National Health Service Fund in Latvia.
• Registering employees with the State Employment Agency (NVA).
• Creating employment contracts and translating them to Latvian.
• Applying for employees’ employment invitations and OCMA decisions.
• Applying for employee’s visas or special expatriation status (if applicable).
• Calculating employees’ monthly salary and creating payslips.
• Researching for any available tax-free allowances or benefits.
• Submitting wage tax returns and national insurance forms.
• Corresponding with the involved parties (organizations, trade unions, etc.).
• Creating annual accounts, financial administration, and year-end statements.
• Creating a payment schedule for wage tax, national and social insurances, and net wages.

Legal Checks on Employees in Latvia

Latvian law follows the EU Law Constitution, which require employers to implement equal treatment in the workplace and protect employees against discrimination based on several characteristics, such as race, nationality, gender, sexual orientation, religion, age, disability, family status or membership in political or public organizations.

This law also includes background checks, which are only considered fair and legal if they relate directly to a job and are necessary for reaching a decision on recruitment. Following the Data Protection Directive 95/46/EC put in place by the EU, these background checks may only be carried out with the consent of the candidate.

Nevertheless, employers recruiting in Latvia may ask for the following checks (following certain conditions):

• Reference and educational checks: Often done in practice, to assess a candidate’s suitability regarding work performance.
• Medical checks/examinations: Employers may ask a candidate to undergo a medical examination to assess whether their health status will affect their work performance.
• Criminal background checks

Basic Facts on Hiring in Latvia

• An employer’s questions during an interview are regulated and restricted by EU data legislation – they must directly relate to job specifications and requirements.
• Terms and conditions of employment in Latvia are regulated by the Labor Code. Collective agreements may also play a vital role in work conditions, so it is best to check if your industry/sector is covered by one.
• Latvia also has a State Labor Inspectorate, which functions to implement state supervision and management in employment relations and worker protection. It regulates how employer and employees fulfil employment contract and collective agreement obligations.
• Employment relationships must be established in a written employment contract. 
• The standard contract type is an indefinite contract. Fixed-term contracts are only admitted in a restricted number of cases.
• The standard length of work hours is 8 hours a day and 40 hours a week, but this can be altered according to the type of employment contract and work.
• Employers must at least meet the minimum wage (currently at EUR 500/month), but the average monthly salary may differ according to the industry and sector.
• Overtime work may not exceed an average of 8 hours in a seven-day period. This is calculated within the accounting period, which should not exceed 4 months. Any employee who works overtime should receive a supplement of no less than 100% of the hourly rate specified for them.
• The length of a one-day rest within 24 hours should be no less than 12 consecutive hours, and the length of a weekly rest period within a seven-day period should be no less than 42 consecutive hours.
• Employers are obligated to withhold and pay employees’ personal income tax and social security contributions monthly.
• The standard notice period for employment termination is one month and must be issued in writing. Before issuing a notice, the employer must receive prior consent of the State Labour Inspectorate. However, the notice period may vary according to the contract or applicable collective agreement.
• The standard probation period cannot be more than 3 months, but this may be specified in the employment contract.