Translated using ChatGPT service.
The Foreign Investors' Council in Latvia (FICIL) proposed reducing overtime pay in all sectors of the economy, suggesting that overtime compensation be set at 50% rather than double pay, as it currently stands. Additionally, if a sector has a collective agreement or general agreement, the overtime premium would be capped at 20%. This proposal was presented at the Human Capital Development Council meeting on October 24.
Latvia is currently the only country in Europe where overtime must be compensated at 100%, according to the Latvian Employers' Confederation (LDDK).
FICIL believes the current regulations, particularly in sectors with collective agreements, are often ineffective in practice. Such changes could help reduce the shadow economy, especially in industries like construction. During the meeting, FICIL presented a total of 12 proposed amendments to the Labor Law, which are expected to be discussed in the coming months.
In light of the intense discussions during the meeting, Minister of Economics Viktors Valainis called for all parties to submit a detailed assessment of each of FICIL's proposals for the next session. Additionally, a broader understanding of labor law practices in other countries is needed. “The international perspective is notably lacking,” Valainis noted.
FICIL also suggested allowing deductions from the final paycheck if an employee leaves the company without returning work equipment and other items.
The Human Capital Development Council, chaired by the Minister of Economics, includes the Ministers of Education, Science, and Welfare. It was established to implement coordinated interagency cooperation and make decisions on planning, developing, implementing, and overseeing necessary labor market adjustments, fostering human resource development in alignment with future labor market demands and structural shifts in the economy toward higher added value, benefiting society as a whole.
In order to improve the management of human capital development issues and enhance dialogue among all stakeholders, amendments to the Council’s regulations were approved at a Cabinet meeting on August 20. Going forward, representatives from Latvia’s largest and most influential business associations and trade unions—including the Free Trade Union Confederation of Latvia, FICIL, the Latvian Employers' Confederation, the Latvian Exporters Association "The Red Jackets," and the Latvian Chamber of Commerce and Industry—will participate in the Council with advisory rights.
