Information for this page was compiled during December 2023 and January 2024. As Member States are currently transposing the EU minimum wage directive, national legislation can be subject to change. Eurofound intends to update these profiles in early 2025. Users are invited to contact Eurofound if they are aware of changes.
Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.
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.
The main actors involved in the setting of the statutory minimum wage are the national level social partners: the Free Trade Union Confederation of Latvia (LBAS) and the Latvian Employers’ confederation (LDDK), as well as the government (Ministry of Welfare, Ministry of Economics, Ministry of Finance). This model of involvement is prescribed by law and fully complied with in practice.
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.
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 Regulations of Cabinet of Ministers No. 563, ‘Procedure for determining and revising the minimum monthly wage’, and is respected in practice (except for 2023 and 2024). The process takes place in accordance with 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. The Ministry of Welfare, in cooperation with the Ministry of Finance and Ministry of Economics, 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. 563, ‘Every year the Ministry of Welfare together with the Ministry of Finance and the Ministry of Economics shall assess the economic situation in the State and develop proposals for the amount of minimum monthly salary (to any whole number with accuracy of up to one euro) for the following year’ (art. 2) by taking into account the criteria listed in the following table:
| Criterion | How is this defined/operationalised? | Regulation or practice |
| Macroeconomic forecasts | Prepared by the Ministry of Economics and the Ministry of Finance | Regulations of Cabinet of Ministers No. 563, “The procedure for determining and revising the minimum monthly wage”, art. 2, part 2.1 (Cabinet of Ministers, 2016) |
| Changes in the economic situation in the previous year, including the development of labour productivity | Official statistical data by the Central Statistical Bureau of Latvia, https://stat.gov.lv/lv | Art. 2, part 2.1 |
| The average labour income of employees | The information at the disposal of the State Revenue Service (VID) | Art. 2, part 2.2 |
| The number of hours worked per month in the previous calendar year | The information indicated in employer reports on the mandatory State social insurance contributions from the labour income of employees, personal income tax and State duty of the business risk in the reporting month | Art. 2, part 2.2 |
| Impact on social security and tax burden of labour force, including with regard to the changes in the object of the mandatory State social insurance contributions of employee and employer in the reporting month | The assessment conducted by the Ministry of Welfare | Art. 2, part 2.3 |
| Unemployment rate differentiated by cities and municipalities of the Republic of Latvia | The information provided by the State Employment Agency (NVA) | Art. 2, part 2.4 |
| The proportion of the minimum monthly salary to the average work remuneration in the State in the previous year | Calculated by the Central Statistical Bureau of Latvia (CSP) | Art. 2, part 2.5 |
| The labour cost index (against the relevant period of the previous year) | Calculated by the Central Statistical Bureau of Latvia (CSP) | Art. 2, part 2.6 |
| Changes in the tax system for the following year (changes in the personal income tax rate, the minimum not subject to the personal income tax, and amount of relief for a dependant) | The proposals developed by the Ministry of Finance | Art. 2, part 2.7 |
| The amount of the existing minimum monthly gross and net salary and its possible changes in the following year in other European Union Member States, as well as the comparison of the proportion of the minimum monthly salary to the minimum work remuneration in those countries | The assessment conducted by the Ministry of Welfare | Art. 2, part 2.8 |
| Changes in rates of the mandatory State social insurance contributions for the following year | The proposals developed by the Ministry of Welfare | Art. 2, part 2.9 |
| The proportion: the number of the employees whose work remuneration is equal to or smaller than the amount of the minimum monthly salary to the total number of employees | Calculated by the Central Statistical Bureau of Latvia (CSP) | 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)).
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.
A special case is minimum hourly tariff rate and minimum monthly work remuneration of a person convicted under a custodial sentence prescribed by Section 56.16 of Sentence Execution Code of Latvia. The minimum hourly tariff rate and minimum monthly work remuneration of a convicted person serving his or her sentence in a closed prison or a partly closed prison is 50% of the minimum hourly tariff rate and minimum monthly work remuneration determined in the State for the standard working time.
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.