EOR Service in Latvia

Shraddha Saxena

Hire, Onboard and Pay Employees in Latvia Quickly and Efficiently

Hiring in Latvia at a glance

CURRENCY
Euro (€, EUR)
working hours
40 hours per week/ 8 hours per day
public/bank holidays
13 Days
capital
Riga
language
Latvian, English
date format
DD/MM/YYYY
remote workers
1.2M
tax year
January 1st to December 31st
minimum hourly salary
No minimum wage
CURRENCY
Euro (€, EUR)
public/bank holidays
13 Days
capital
Riga
language
Latvian, English
date format
DD/MM/YYYY
tax year
January 1st to December 31st
payroll frequency
Monthly
GDP
US $62 billion (est. 2022)
working hours
40 hours per week/ 8 hours per day

Employer of Record in Latvia

Employer of Record (EOR) services in Latvia provide a comprehensive solution for businesses looking to expand or hire in the country without establishing a legal entity. The EOR becomes the official employer, handling all HR responsibilities, payroll, taxes, and compliance with local labor laws. It manages employment contracts, benefits, and termination procedures, ensuring full compliance with Latvian labor regulations. This alleviates the administrative burden from the company, allowing it to focus on its core business functions. EOR services in Latvia are particularly useful for companies aiming to test the market, initiate operations quickly, or navigate complex employment legislation.

Why use Latvia EOR?

An EOR in Latvia helps navigate complex labor laws which can be challenging for foreign businesses. 

For instance, Latvia has specific laws around vacation, parental, and sick leave, among others. Employees are entitled to paid annual leave and such leave may not be less than 4 calendar weeks. By the employer-employee agreement, the leave may be granted in parts. Further, Latvia also has strict work visa rules that must be complied with. For instance, if you hire a non-EU/EEA country individual who works in Latvia, ensure that there is a valid work visa for the same. 

EOR services in Latvia help companies navigate through the complex labor and employment laws. They look after the work permit processes and other legal compliances, ensuring smooth operations in the new country. 

EOR Costs in Latvia

Employer of Record (EOR) pricing in Latvia is typically based on a percentage of the employee's gross salary. This percentage, usually ranging from 5% to 20%, depends on various factors, including the number of employees, the complexity of employment arrangements, and the specific services required.

The fee generally includes services like payroll management, tax administration, and compliance with local labor laws. Extra services, such as benefits administration or HR support, might incur additional charges.

Although EOR fees seem like extra costs, they can save businesses money in the long run by reducing the overheads associated with setting up a legal entity and maintaining compliance.

Gloroots’ has a fairly transparent pricing model that provides optimum investment returns. We manage admin tasks and legal compliances associated with employment. Also, we offer a live dashboard that helps you track your Latvia workforce expenses in real-time. It also offers HR support and benefits management to the employees hired through EOR.

Key Metrics For Foreign Employers

The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Latvia.

Factors Global Ranking Interpretation
Rule of law 30 Indicates effectiveness of law enforcement
Labour-employer cooperation 22 Indicates positive labor-employee relationships
Reading Maths, and Science 28 Indicates average scores in OECD's survey of 15-year old students
University Ranking 66 Indicates average QS rankings
Labour productivity per employee 42 Indicates total output by the total labor input used to produce that output
Ease of finding skilled employees 101 Indicates findability of skilled talent
Workforce with tertiary education 26 Indicates % of workforce with PG degrees
Digital Skills 63 Indicates prevalence of advanced digital skills in the population

Source: The Global Talent Competitiveness Index 2022

Through the Gloroots’ Recrew platform, you can discover amazing talent in Latvia.

Why work in Latvia?

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Risks of misclassification

Misclassifying workers can have serious consequences for businesses, leading to legal and financial risks. In Latvia, it is essential to accurately classify employees according to local labor laws to ensure compliance and avoid potential pitfalls. Suppose a company in Latvia hires individuals to provide services on a regular basis, but incorrectly classifies them as independent contractors rather than employees. This misclassification can lead to several issues. For instance, the company might not provide the contractors with statutory benefits such as paid leave, health insurance, or pension contributions, which they would be entitled to as employees under Latvian labor laws.

Don't let the risks of misclassification hinder your success in Latvia. Partner with Gloroots to ensure compliance, mitigate risks, and focus on what matters most – driving your business forward.

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Employing in Latvia

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Tax

INCOME TAX 

Rate Type
20.00% up to 20,004 EUR
23.00% 20,005 – 78,100 EUR
31.00% 78,100 EUR +

Other Taxes and Social Security contribution:

The Employer Payroll Contributions

Contribution Type Rate
National Social Insurance and Solidarity Tax (NSIC) (split rate) 20.77% - 23.59%
National Social Insurance and Solidarity Tax (NSIC) (retirement-split rate) 20.77%

Please note that the specific rate within the range of 20.77% to 23.59% for the split rate depends on the income, with a maximum income limit of 78,100 EUR.

the Employee Payroll Contributions for employment with a company registered in Latvia/

Social Security Contribution Rate
National Social Insurance and Solidarity Tax (NSIC) (split rate) 9.25% - 10.50%
National Social Insurance and Solidarity Tax (NSIC) (retirement-split rate) 9.25%

Please note that the specific rate within the range of 9.25% to 10.50% for the split rate depends on the income, with a maximum income limit of 78,100 EUR.

Separation

Termination and Severance

Termination Process:

Employers have the authority to terminate a fixed-term contract based on specific grounds, which include business-related factors, personal reasons, or misconduct by the worker. The termination process necessitates providing notice and a written explanation for the decision. In cases where the reason for termination is misconduct, the employee must be given a warning and an opportunity to provide an explanation for their actions.

Notice Period

The legally mandated notice period must be a minimum of one month. However, during the probationary period, the notice period is reduced to three days, requiring written notice.

Severance Pay

Length of Service Severance Pay
Up to 5 years One month's pay
5 to 10 years Two months' pay
10 to 20 years Three months' salary
Over 20 years Four months' pay

Probation Period

In the case of an open-ended employment contract, the probationary leave period is usually limited to three months. However, if a collective agreement is in place, the parties involved can mutually decide on a probationary period that exceeds three months but does not compromise the overall level of employee protection.

For fixed-term contracts, it is permissible to include a probationary period as follows:

Up to one month for employment contracts lasting up to six months.

Up to two months for employment contracts lasting up to one year.

Start Hiring in Latvia today

When hiring globally, ensuring compliance comes with its own set of battles. Employers must ensure all hiring and onboarding activities adhere to employment laws, payroll procedures, DE&I compliance, GDPR and similar data protection, etc. If you think it is hard to set up local entities and start hiring, keeping up with a dynamic compliance landscape is far harder. 

Gloroots helps you minimize all these efforts by providing a single window to manage all these tasks. Our in-house experts fully shield you from cross-border employment and payroll compliance risks. We do this by helping you with generating employment contracts, on-time payments, compliant benefits, while you focus only on screening talent. 

Our promise is a stress-free global employment experience for both you and your employee.

Contact our experts today to kickstart your global hiring campaign.

Grow your team in Latvia

Expanding your team is a crucial step in company growth, and finding the right employees in Latvia can be a game-changer. 

With Gloroots' global Employer of Record (EoR) service, you can streamline your operations and focus on what truly matters: nurturing your team and driving company growth. Gloroots takes care of payroll, tax management, benefits administration, and compliance, ensuring that you stay in full compliance with employment laws in Latvia.

By partnering with Gloroots, you can confidently grow your team, knowing that the administrative burden is taken care of. This allows you to invest your time and resources in building a strong workforce and driving your company's success.

Unlock the potential of Latvia's talent pool and let Gloroots simplify your expansion process. Grow your team effortlessly and focus on what matters most – the growth and prosperity of your employees and your company.

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Experience Seamless Hiring in Latvia?

Let us take care of all your employment needs. We guarantee easy onboarding & compliant workforce management in Latvia.

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