One of the keys to retaining great employees is offering competitive benefits and compensation. Your Latvia benefits management plan must include the country's statutory minimums, but you can add supplemental benefits to...
Read MoreOne of the keys to retaining great employees is offering competitive benefits and compensation. Your Latvia benefits management plan must include the country's statutory minimums, but you can add supplemental benefits to stand out from other employers. You also need to meet Latvia's compensation laws to stay compliant.
Reading Time: 4 minutes
One of the keys to retaining great employees is offering competitive benefits and compensation. Your Latvia benefits management plan must include the country’s statutory minimums, but you can add supplemental benefits to stand out from other employers. You also need to meet Latvia’s compensation laws to stay compliant.
Unfortunately, handling compensation and benefits on top of managing the incorporation process, hiring employees, and more can cause you to lose valuable time running your company. Globalization Partners’ Latvia compensation and benefits outsourcing services are designed to help you start working faster without any worries about compliance.
The minimal wage in Latvia in 2022 is the following:
Latvia compensation laws define “special risk” as environmental risks that can impact the safety and health of an employee.
All employees need to receive statutory benefits as a part of your Latvia benefits management plan so that you can stay compliant. For example, employees should get time off for the country’s 12 public holidays as well as at least four weeks of paid annual leave. Most employees are generally eligible for 10 days of sick leave paid by the employer. The second and third days are paid at 75% of the employee’s regular wages, and the fourth through 10th days are paid at 80%. From the 11th day through 26 weeks, the state’s Social Insurance Agency pays 80% of the employee’s regular wages.
Another important guaranteed benefit is maternity leave. Female employees should get at least 112 days of maternity leave — 56 before the birth and 56 after. Social insurance will cover the employee’s full wages during the leave as long as she is insured. Fathers should get 10 days of paternity leave that they can take within two months of the child’s birth.
When you start dispersing your Latvia benefits management plan, you can also disperse other benefits that will encourage greater retention rates. Some of the common employee benefits in Latvia include private health insurance and the use of a company car. If you’re not sure what benefits employees would appreciate most, try seeing what other companies are offering and asking your employees what benefits would mean the most to them.
You cannot provide benefits and compensation until you register an entity in the country unless you work with a global PEO. Globalization Partners provides Latvia compensation and benefits outsourcing services and will act as the Employer of Record on your behalf. We can shoulder all compliance for you and add your employees to our existing benefits plan and payroll.
Hiring workers in a new country comes with new payroll processes, working expectations, and other considerations. When it comes to employee benefits planning in Latvia, you’ll need to understand labor laws and market standards to create competitive packages.
When you create a benefits plan that supports your employees’ needs, you can encourage your company’s overall success. On the recruitment end, employee provisions can persuade job seekers to apply for your vacancies. On the job, your benefits packages can improve morale and increase retention rates. Higher retention reduces the need for onboarding expenses, saving your company money long term.
Possible fringe benefits for your team in Latvia include:
Before you choose fringe benefits, you should consider the provisions required by law. You’ll need to provide these benefits to stay compliant:
Hiring employees in a new country can be challenging because of new benefit laws and expectations. With an organized approach, you can create packages that are compliant and competitive.
Tracking your spending is essential for all areas of business. Evaluate your revenue and expenses to determine how much you’re willing to dedicate to your benefits program.
Your company will need an understanding of the market to compete. Look into local companies and their employee provisions. Common benefits will inform job seekers’ expectations.
With the information you’ve gathered, you can choose provisions for your employees. Allocate funding to the required benefits first, then use your remaining budget for additional perks.
Every company spends a different amount on benefits, affecting the overall market average. Factors like size, location, and industry can influence how much an employer dedicates to benefits. With wide differences between companies, an average isn’t likely to be a helpful metric to guide your spending.
Instead, you should create a budget that fits your revenue. Consider using a percentage of your earnings. This approach makes it easy to scale your budget with your growth. As you bring in more revenue, you can provide more for your workers.
The calculation process looks different depending on the benefit. Many calculations are straightforward, like paid annual leave. When employees take a day off, they should receive the same wages they would earn for a day they worked. Calculations for fringe benefits, like holiday bonuses, are at your discretion.
Social insurance contributions rely on a percentage of income earned rather than a set amount. Employees pay 10.5 percent, and employers pay 23.59 percent. For workers of retirement age, these contributions drop to 9.25 and 20.77 percent, respectively.
Generally, all types of benefits are subject to income tax in the country. Benefits are taxed at market value.
Social insurance, taxes, and other sources cover the public health sector in the country, but the national system does not include every type of care.
Employers are responsible for social insurance contributions to support the public healthcare sector. They are not obligated to provide private health insurance, but they may do so as a fringe benefit.
Globalization Partners’ Global Employment Platform™ helps you build and scale an international team quickly and easily, ensuring all benefits offered to candidates are compliant and in line with local regulations. Contact us to get started.
If you’re ready to grow your business, or you have questions about a specific country, complete the form. One of our experts will be in touch shortly.
