Employment relationships in Latvia are regulated by the Labour Law, which transposes many aspects of EU employment law and social policy directives, such as those relating to equal treatment, collective redundancy, working hours, and rest breaks. Monitoring of Labour Law compliance is executed by the State Labour Inspectorate and representatives of employers and trade unions.
Latvia has high university enrolment numbers. Together with professional education, this ensures a well-educated labour force that is also highly motivated and multilingual, as 70% of the population under 40 speaks English and 80% of Latvian residents speak Russian.
At the beginning of 2016, Latvia’s population was 1.97 million, including approximately 50.4% or 994.2 thousand economically active (age 15-74) people. As of August 2016, the registered unemployment nationally was 8.1%, a decrease from 8.7% at the end of 2015. This decrease is the result of a growth in economic activity. The highest unemployment levels are among unskilled workers, though there are shortages of qualified and experienced specialists in certain areas and positions.
Generally, the majority of Latvia’s young people commence their careers while still studying, thus numerous young, leading specialists are already active in the labour market. These people are self-confident, possess good communication skills, and are technologically adept. Participation in student exchange programs (e.g., Erasmus), youth organizations (e.g., AIESEC), and international communication helps foster foreign language skills
According to the results of “Eurobarometer” research (2012), Latvia ranks the second among other European states for the percentage of residents, who in addition to their mother tongue can speak at least one more foreign language: 95 % of Latvia’s residents are fluent in some foreign language and 54 % can speak at least two foreign languages (6th highest score). Thirteen percent can speak at least 3 foreign languages. Low 5 % of the respondents say they cannot speak any foreign language.
According to the results of “Eurobarometer” research (2012), Latvia ranks the second among other European states for the percentage of residents, who in addition to their mother tongue can speak at least one more foreign language: 95% of Latvia’s residents are fluent in some foreign language and 54% can speak at least two foreign languages (6th highest score). Thirteen percent can speak at least 3 foreign languages. Low 5% of the respondents say they cannot speak any foreign language.
Russian is the most popular foreign language in Latvia, 67% of respondents fluently speak Russian, 46% of respondents speak English followed by German with about 7%. Other popular languages in Latvia are French, Italian, and Polish. Because of the interesting Scandinavian labour market, some Scandinavian languages (Swedish and Norwegian) are becoming increasingly more popular among Latvians. Moreover 44% of respondents recognize they speak foreign language daily – at work or in private life
The operations of recruitment companies in Latvia are licensed by the State Employment Agency (Valsts Nodarbinātības aģentūra (NVA)). A list of licensed companies is published on the NVA’s website, www.nva.lv. High-quality and value-for-money recruitment services are offered by around ten professional recruitment companies in Latvia, most of them part of international networks. In addition, a number of companies offer staffing and payroll-outsourcing services.
Candidate selection takes 2-6 weeks, depending on the nature and seniority of the position.
SALARIES IN LATVIA
According to the Central Statistical Bureau of Latvia, the average monthly salary in Latvia in 2015 was EUR 818 gross. Salaries in the Riga region are about 13% above the Latvian average, but in other areas they are 15-30% below average, with the lowest being in Latgale (the eastern region of Latvia). However, the salary gap between Riga and the other regions has tended to decrease in recent years.
Monthly salaries may not be less than the minimum stipulated by the state - EUR 370 gross. The minimum hourly rate for normal working hours per week (40 hours) is EUR 2.3
Salary structure and taxes
Minimum stipulated salary by the State is EUR 370 gross
* Calculation of an employee’s net salary in based on the general algorithm, the actual formula is more complicated, also taking into account a number of tax discounts, e.g. for dependents.
Observing the current situation in the labour market, the wages range from the official minimal monthly salary EUR 370 gross paid to retail sector’s unskilled employees up to EUR 10 000 gross to top managers in the largest companies.
According to the Latvian Central Statistical Bureau, the average gross monthly salary in 2015 has increased by 6.8% or EUR 53 compared to 2014 in Latvia
However it must be noted that the growth of salary would refer and affect mainly the administrative staff and highly qualified specialists, especially the growth is expected in such in-demand professional groups like: IT, sales and highly qualified technical specialists and employees in manufacturing, machine-building industry, shipbuilding and related spheres.
Compared to other EU countries, the general level of compensation in Latvia is one of the lowest. For example, the level of compensation for unskilled jobs is three to four times lower than in such Western European countries as Germany and France, while in terms of wage adjusted labour productivity Latvia is ahead of most EU member states.