Employers call for less restrictive immigration laws

Despite a migration policy aimed at protecting the interests of the domestic labour market, the employment of foreign workers is increasing in Latvia, due to a shortage of workers and increasing wage pressure. Employers are appealing to the government to liberalise immigration laws to eliminate the extra costs associated with the current regulations. However, the trade unions are pushing for a more efficient use of local labour resources and better wages in some sectors in order to stem the emigration flow out of the country.

Increasing number of migrant workers

Although Latvian migration policy is directed at protecting the domestic labour market, employers are tending more frequently to exercise the option of employing migrant workers, as provided by law. According to the Office of Citizenship and Migration Affairs (Pilsonības un migrācijas lietu pārvalde, PMLP), during the first half of 2007 almost as many employed foreigners, at 1,989 persons, were registered as in the whole of 2006, when the total reached 2,398 persons. Moreover, the number of migrant workers entering the country is increasing while the number of foreign entrepreneurs is decreasing – the latter has declined from 33% of the total number of those entering for the purpose of employment in 2006 to 23% of the total in 2007.

In 2007, most of the migrant workers represent third-country nationals who have arrived from countries outside the EU. Russian citizens constitute the largest group of migrant workers (453 migrants), followed by those from the Ukraine (312), Moldova (290), Belarus (132), Armenia (82) and Uzbekistan (74). Most of the registered foreigners work in the following economic sectors: construction (674 workers), transport and communications (266) and manufacturing (225).

Concerns over working conditions

The proportion of registered migrant workers compared with the total number of employed persons in Latvia is still minor, at 0.2%, although this does not lessen the importance of the situation. Assessments by the State Labour Inspectorate (Valsts Darba Inspekcija, VDI) in workplaces in those sectors experiencing a labour shortage reveal that migrant workers are often employed illegally, thereby violating the labour law. In such cases, the working conditions of these workers may not comply with those specified under Latvian legislation.

Employers require more guest workers

The Latvian Employers’ Confederation (Latvijas Darba Devēju Konfederācija, LDDK) has urged the government to assess the possibilities of liberalising immigration legislation to reduce the costs to employers of hiring migrant workers. Furthermore, LDDK is anxious that the state should portray Latvia as an attractive destination in order to encourage more foreign nationals into the country’s labour market (LV0605029I).

Trade unions prefer better use of local resources

Meanwhile, the trade unions contend that the local labour market capacity must be used more efficiently and that emigration of the Latvian workforce should be curtailed (LV0512104F). Almost 70,000 workers are registered as unemployed in Latvia. Moreover, in several sectors, salaries are still low; the trade unions believe that, by increasing salaries, all of the current labour market problems can be solved without importing more workers.

Government plans to open up certain professions

The Latvian migration policy aims to protect the national labour market. Workers from third countries can only be admitted to a post after the vacancy has been registered with the State Employment Agency (Nodarbinātības Valsts aģentūra, NVA) and no Latvian residents with relevant qualifications have applied for this vacancy. Moreover, the employment of migrant workers causes additional costs to companies. Such workers must be provided with a place of residence and beneficial social conditions, and their salaries have to be at least at the level of the average local salary. Other restrictions also apply.

In response to the employers’ request, the government has started to address the issues pertaining to workforce immigration. The Ministry of Interior (Iekšlietu ministrija, IeM) has initiated a plan to attract foreign workers. The working group established for this purpose proposes the development of a legal basis for gradually allowing the entry of workers in certain professions that are experiencing labour shortages. The general position is to facilitate the entry of educated specialists rather than low-skilled blue-collar workers.

By 1 March 2008, the IeM is expected to draft amendments to legislative acts which would entitle the Cabinet of Ministers to decide on the professions requiring greater numbers of workers from third countries under a simplified procedure and in line with the existing foreigner quota. The Ministry of Welfare (Labklājības ministrija, LM) has been ordered to introduce amendments to the law before 30 December 2007 to lift the quota for foreign nationals employed in the information technology sector. Before that deadline, both ministries have to develop amendments to the law which would provide for use of the ‘one-stop agency’ principle in the procedure of applying for residence and work permits.

Commentary

Liberalisation of the immigration policy would help to resolve the workforce deficit caused by emigration and demographic processes, while also reducing pressure on salaries. Nonetheless, it is expected that this sensitive issue will remain on the agenda of discussions between the social partners for some time.

Raita Karnite, Institute of Economics, Latvian Academy of Sciences

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