Changes in salaries for employees from third countries

18.03.2024 Karina Katz, lawyer

On February 8 this year, amendments to the Regulations Regarding the Amount of Financial Means Necessary for a Foreigner and the Determination of the Existence of Financial Means (hereinafter referred to as the Regulations) came into force, which provide for changes to the minimum salary for employees from third countries as of April 1, 2024.

For a long time Latvian employers have been asking for simplification of requirements for attracting foreign labor. Taking into account the labor shortage in sectors important to the state economy, such as manufacturing and construction, the Latvian government has relaxed a number of requirements for foreign workers. The changes have also affected salaries.

If until recently the salary of a foreign employee was tied to the average gross salary of workers in Latvia for the previous year (until February 8, this amount was 1373 euros), now when inviting third-country citizens to work in Latvia, the minimum salary will be tied to the average gross wages in the industry in which the employee is employed, or to the average wages in all industries (which now amounts to 1537 euros).

If wages in a particular sector (we are talking about industries such as information technology, finance, insurance, legal services) are above average, then the average wage in all sectors is now taken as the minimum (i.e. 1537 euros). If wages in an industry (for example, in education or catering) are below the average, then the minimum “reference point” will be the wage in this particular industry.

Let’s look at a specific example. For example, a company works in the hotel business and wants to hire a foreigner. Before the Regulations came into force, the employer had to pay such an employee a salary of at least 1373 euros, but now, starting from April 1 of this year, the employer will have to pay only 993 euros, since the average gross salary in the hotel and catering industry is exactly that much.

New amendments to the Regulations will make it easier to attract workers from third countries to industries where wages are below average. In addition to the above-mentioned sphere of the hotel business, these include, in particular, the sphere of education (average gross salary is 1247 euros), art and entertainment (1286 euros), retail and wholesale trade (1365 euros), transport (1477 euros). At the same time, in industries where the average monthly gross salary exceeds EUR 1,537, such as information and communication services (EUR 2,549), financial sector (EUR 2,678), electricity (EUR 1,972), etc., the minimum monthly wage will remain tied to the average salary in the country (i.e. will be 1537 euros).

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