Minimum wage country profile for Latvia

Information for this page was compiled during December 2024 and January 2025. Most Member States had already transposed the EU minimum wage directive at this point, while others were still working towards it. Those that had not yet fully completed transposition or where the information was not yet publicly available include Bulgaria, Cyprus, Luxemburg, Netherlands, Poland, Romania and Spain. These profiles will be updated consecutively as the information becomes available. Users are invited to contact our experts on minimum wage if they are aware of changes.

This profile describes how minimum wages are regulated and set in EU countries and Norway.

This profile describes how minimum wages are regulated and set in Latvia. It can be read as background information for Eurofound’s annual review of minimum wage setting series. Latvia has a national level statutory minimum wage (“minimālā alga” or “minimālā darba alga”).

The general law establishing the national minimum wage is the Labour law (Section 61). This section establishes that a minimum wage should not be less than the minimum level determined by the State. The amount of minimum monthly wage within the scope of regular working time, as well as calculation of minimum hourly wage rate and the procedures for the determination and review of the minimum monthly wage should be determined by the Cabinet of Ministers.

A minimum wage determined by a general agreement entered into force in accordance with the Labour law has the same legal consequences within the scope of employment relationship as a minimum wage determined by the State, and it can never be lower than the one determined by the State.

On 27 October 2022, for the first time, amendments introduced a norm about increase of minimum wage in the Labour law (Transitional Provisions No. 26 and 27). This regulation establishes that, as usual, the Cabinet will set the minimum monthly salary for regular working hours, but it stipulates that the minimum shall not be below €620 starting from 1 January 2023 (Transitional Provision Nr. 26), and €700 from 1 January 2024 (Transitional Provision Nr. 27).

Amendments to the Labour law regarding the main regulation of minimum wage have been introduced on 12 December 2002, 23 October 2014, and 27 May 2021.

The annual change of the minimum wage is specified by the annual Regulations of the Cabinet of Ministers.

After 2015, the new level of the monthly minimum wage is determined by amendments to Regulations of Cabinet of Ministers No. 656. Amendments were adopted on 25 October 2016 (Regulations No. 683, valid from 1 January 2017); 29 August 2017 (Regulations No. 511, valid from 1 January 2018); 24 November 2020 (Regulations No. 707, valid from 1 January 2021); 13 December 2022 (Regulations No. 788, valid from 1 January 2023); and 14 November 2023 (Regulations No. 657, valid from 1 January 2024). In 2019, 2020 and 2022 the minimum monthly wage was not changed.

In 2025, the government introduced the first measures of the labour tax reform. Within the reform the determination of the procedure and criteria of the amount and setting of minimum wage were changed in order to adjust to requirements of the Minimum Wage Directive (Directive (EU) 2022/2041 of the European Parliament and of the Council of 19 October 2022 on adequate minimum wages in the European Union).

For that reason two new normative acts were developed and adopted during 2024: Cabinet of Ministers Regulations No. 730 Procedures for the determination and review of the minimum monthly salary and Amendment to the regulations of the Cabinet of Ministers of 24 November 2015 No. 656 Regulation on the amount of the minimum monthly salary within normal working hours and the calculation of the minimum hourly rate.

The Ministry of Welfare has to elaborate an initial proposal for the level of the minimum wage, the Ministry of Economics and Ministry of Finance have to prepare economic forecasts and indicators and information about expected changes in taxes, the Central Statistical Bureau of Latvia (CSP) and State Revenue service have to provide a wide range of statistical data. The role of social partners – the Employers Confederation of Latvia (LDDK) and the Free Trade Union Confederation of Latvia (LBAS) is specifically determined in Article 5 of the Regulation No. 730.

The Tripartite Cooperation Council is also involved in determining the minimum wages as a consultation platform. It is a place where the statutory minimum wage is coordinated among the national level social partners – the government, LBAS and LDDK. The results of coordination are fixed in the minutes of meetings. The Council itself does not generate proposals for the annual minimum wage.

In order to calculate the impact of the developed proposal of the minimum monthly wage on the state and local government budgets, CSP, the State Chancellery, and Ministry of Justice have to submit the additional information to the Ministry of Welfare.

Two preconditions are important for the current process of setting the statutory minimum wage. The first is the existence of social dialogue institutions and infrastructure, and the second is the existence of the legal basis for social partners’ involvement.

In general, the process of setting the minimum wage has not changed since the establishment of the two important parts of the social dialogue infrastructure – the national level employers’ organisation LDDK (in 1993) and the Tripartite Consultative Council of Employers, State, and Trade Unions in Latvia (also in 1993), which was transformed into the National Tripartite Cooperation Council (NTSP) in 1998. At that time the national level trade union LBAS already existed. So, the first precondition is created.

Regulation of Cabinet of Ministers No. 606 (‘Rules of Procedures of the Cabinet’) provides that any ministry should inform the public of the content of and substantial changes in the documents examined by the Cabinet of Ministers which are of significance to the sector and important to the public interest (art. 51). Further, the regulations specify that the responsible ministry should direct the preparation of the draft of the agreement, indicating the ministries or authorities by which this draft should be agreed. Among them, the regulation lists ‘organisations of the National Tripartite Co-operation Council - the Latvian Employers' Confederation and the Free Trade Union Confederation of Latvia - if a draft affects interests of employers and employees’ (Article 52.2.7).

The ministry or authority involved receives the relevant information in the Unified Portal for the Development and Agreement of Draft Legal Acts (TAP portal). TAP portal is a state information system that is used to ensure the operation of the Cabinet of Ministers, to inform the public, and to participate in drafting of a legal act. It is managed by the State Chancellery (VK).  So, the second precondition also is established.

The procedure of setting of the minimum wage is determined by the Cabinet of Ministers Regulations No. 730 Procedures for the determination and review of the minimum monthly salary and Amendment to the regulations of the Cabinet of Ministers of 24 November 2015 No. 656 Regulation on the amount of the minimum monthly salary within normal working hours and the calculation of the minimum hourly rate. The process takes place in several steps.

Discussions on the minimum wage among social partners and government start in spring or even earlier, usually before discussion on the state budget. According to Regulation No. 730 the Ministry of Welfare, prepares a proposal on the minimum wage for the budget year (the first step), and the social partners consider their proposal (the second step). Then the proposals are discussed in different modalities (the third step), and finally in the National Tripartite Cooperation Council (the fourth step). The final decision is taken by the government and formalized in annual Regulations of Cabinet of Ministers (the fifth step).

There was only one exception, represented by the introduction of two new norms in the Transitional Provisions of the Labour law that obliged the Cabinet of Ministers to set minimum wages in 2023 and 2024 in a certain amount. However, these amounts were discussed among trade unions, employers, and the government before the adoption of the amendments (in 2022).

According to Regulation of Cabinet of Ministers No. 730,  the Ministry of Welfare annually develops a proposal on the amount of the minimum monthly wage (up to any whole number with an accuracy of one euro) for the following year, taking into account  indicators listed in the following table:

Criterion How is this defined/operationalised? Regulation or practice
Reference value Determined at 46% of the average gross salary calculated by the Central Statistical Bureau (CSP) for the last 12 available months Regulations of Cabinet of Ministers No. 730 “Procedures for the determination and review of the minimum monthly salary” (Cabinet of Ministers, 2024)

Art 2, part 2.1.
Macroeconomic forecasts and assessments of changes in the economic situation for the previous year, including the development of labour productivity Should be prepared by the Ministry of Economics and the Ministry of Finance Art. 2, part 2.2.
Possible changes to the tax system for the next two years Information provided by the Ministry of Finance regarding possible changes to personal income tax rates, the amount of the non-taxable minimum of the personal income tax and the amount of the relief for dependents Art. 2, part 2.3
The minimum income level and the poverty risk threshold Calculated for the last available year from CSP Art. 2, part 2.4.1
Changes in the labour cost index compared to the corresponding period of the previous year Calculated by CSP Art. 2, part 2.4.2
The ratio calculated for the last available month: the number of employees whose employment income is equal to or less than the minimum monthly wage, to the total number of employees (at national and regional levels) Calculated by CSP Art. 2, part 2.4.3
The average change in consumer prices calculated for the latest available period over the 12 months compared to the previous 12 months Calculated by CSP Art. 2, part 2.4.4
Unemployment rate indicators for the previous year (national and regional levels) CSP data Art. 2, part 2.4.5.1
The average monthly gross salary in the country and in the private sector in the previous year (at the national and regional levels and by sector) CSP data Art. 2, part 2.4.5.2
Indicators of the population's risk of poverty and social exclusion for the last available year CSP data Art. 2, part 2.4.5.3.
Average gross employment income and hours worked Calculated by CSP, using information from the State Revenue Service on employees' employment income and the number of hours worked per month in the previous calendar year in accordance with the information indicated in employers' reports on mandatory state social insurance contributions from employees' employment income, personal income tax and the state duty of the business risk in the reporting month Art. 2, part 2.4.6
The number of unemployed people in the previous year Information from the State Employment Agency Art. 2, part 2.6
Summary of the minimum monthly gross wage published on the website of the European Union's statistical office Eurostat and its possible changes in the coming year in other European Union countries, as well as a comparison of the ratio of the minimum monthly wage to the average wage in these countries Prepared by the Ministry of Welfare's Art. 2, part 2.10

All employees working on the basis of working contract are covered by the minimum wage. This follows from two norms of the Labour law: first, that the Labour law and other laws and regulations that govern the employment relationship are binding on all employers irrespective of their legal status and on employees if the mutual legal relationship between employers and employees is based on an employment contract (Section 2 (1)); and second, that a minimum wage shall not be less than the minimum level determined by the State (Section 61 (1)).

  • Latvian Saeima: Darba likums (Labour law), adopted on 20 June 2001, valid from 1 July 2002

There is only one monthly statutory minimum rate, that is determined by the Regulations of the Cabinet of Ministers applicable to the respective year. The Labour law sets shorter working hours for some categories of workers. Regular working time of employees associated with a special risk may not exceed seven hours a day and 35 hours a week if they are engaged in such work for not less than 50% of the regular daily or weekly working time. The Cabinet of Ministers may determine regular shortened working time also for other categories of employees (Section 131 (3)). For persons who are under 18 years of age a working week of five days shall not be exceeded (Section 132 (1)). Children who have reached the age of 13 years may not be employed, for more than two hours a day and more than 10 hours a week if the work is performed during the school year; and for more than four hours a day and more than 20 hours a week if the work is performed at the time when there are holidays at an educational institution but if the child has reached 15 years of age - for more than seven hours a day and more than 35 hours a week (Section 132 (2)). Adolescents may not be employed for more than seven hours a day and more than 35 hours a week (Section 132 (3)).

Some categories of workers have special wage schemes which include minimum levels, but these are not considered as statutory minimum wage. Different minima are set for each of the wage classes relevant to determined qualification levels of workers. The minimum levels of the lower wage classes should be harmonised with the statutory minimum wage, but it is not required that it should be equal to statutory minimum wage. Wage setting for such groups of workers is determined in the Law on remuneration of officials and employees of state and local government authorities, adopted in 2009, but often changed. The Law applies to workers in 22 state and local government institutions.

The minimum hourly tariff rate and minimum monthly work remuneration of a convicted person according to the work performed by the him or her and the resocialisation objectives is as follows:

1) 50% of the minimum hourly tariff rate and minimum monthly work remuneration determined in the State for the standard working time - to a convicted person serving his or her sentence in a closed prison or a partly-closed prison;

2) equivalent to the minimum hourly tariff rate determined in the State - to a convicted person serving his or her sentence in an open prison;

3) 50% of the minimum hourly tariff rate determined in the State for an adolescent minor - to a convicted minor.

The most recent regulations only determine the amount of the monthly minimum wage. Regulation of the Cabinet of Ministers No. 656 adopted on 24 November 2015, ‘Rules on the amount of the minimum monthly wage within normal working hours and the calculation of the minimum hourly rate’, determined new principles of establishing the minimum wage. Before 2015, annual Regulations of Cabinet of Ministers determined the amount of the minimum monthly wage within normal working hours and the amount of the minimum hourly wage (for example, Regulations No. 665, Cabinet of Ministers, 2013a), while Regulation No. 656 determines the amount of the minimum monthly wage within normal working hours and the procedure (formula) for calculating the minimum hourly rate. The minimum hourly rate is calculated from the amount of the minimum monthly wage by dividing it by the number of hours of normal working time per relevant month (five-day working week and 40 hours per week or five-day working week and 35 hours per week or six-day working week and 40 hours per week or six-day working week and 35 hours per week). This means that minimum hourly rate may change every month and year even if minimum monthly wage remains unchanged.

There are 12 payments per year of the monthly rate.

Only one level of minimum wage is determined by the Regulation of the Cabinet of Ministers. There are no additional components of pay which count towards the minimum wage.

Piece rate wages, which are payments based on the completion of a specific amount of work rather than the time taken to complete it, are also regulated by minimum wage laws. According to the State Labour Inspectorate (VDI), this system involves compensating workers for the quantity of work accomplished, irrespective of the time taken. However, under this system, employers must still ensure that workers receive the agreed-upon amount of work within the designated working hours, based on approved pricing for the tasks. These pricing structures must guarantee that, within the limits of normal working hours, an employee with appropriate qualifications, under conditions of reasonable intensity, receives at least the minimum wage set by the state and is able to earn more. If an employee completes work within regular hours but the calculated wage falls below the country's minimum wage, the employer is required to compensate the difference up to the minimum wage.

The employer must ensure accurate accounting and payment of the work performed by the employee. Although piece rate wages are calculated regardless of the time in which they are paid, even in the case of piece rate wages, the employer must comply with the obligation set forth in the Labour Law to accurately list the hours actually worked by the employee, which is essential in order to identify possible overtime work, night work, work performed on holidays, for which the employee has to be paid additional compensation (supplement).

Neither the Labour law nor the Regulations of the Cabinet of Ministers No. 656 or No. 563 allow deductions from the minimum wage as such. All dependent values of minimum pay are calculated from the nominal amount of minimum wage.

Values that count towards the minimum wage are determined in several laws out of the scope of labour legislation. They are summarised in the following table:

Component Normative regulation
Social insurance payment Law On State Social Insurance (Latvian Saeima, 1997)
Personal income tax Law On Personal income tax (Latvian Saeima, 1993)

Source: Dārziņa L., 2023), relevant normative regulation.

The official statistical office (CSP) provides periodic updates on the minimum wage amount and offers various statistics regarding employee income distribution across several categories. These include the breakdown of employees based on their average gross monthly income over two consecutive years, gender and age groups, sectors, and types of economic activities. However, this data generally does not distinguish recipients of the minimum wage, except in cases where income brackets align with the minimum wage threshold.

Annually, the Ministry of Welfare compiles and publishes a report on the minimum wage situation on its website. When proposing changes to the Cabinet of Ministers, the Ministry includes an annotated draft law containing specifically prepared statistical data concerning wage earners receiving the minimum wage or less.

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