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Latvian employers will be allowed to pay 70% of wages to keep afloat

The government supported amendments allowing employers to pay their employees 70% of their wages through the end of the year, according to the Ministry of Economics on April 28.

The amendments to law On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19 aims to help employers keep their employees and have more flexibility in organizing work at their businesses.

“The state has to offer broader and more diverse support so that entrepreneurs can hold on to highly qualified specialists who will be the basis for fully renewing operations in the next months,” said Economics Minister Jānis Vitenbergs (KPV LV).

Companies who meet the In-depth Cooperation Programme criteria and have been impacted by the Covid-19 crisis will be able to:

  • Decrease an employee's pay to 70% of the amount mandated by the Labour Law
  • Grant an employee their yearly paid leave

Employees who don't agree to part-time employment have the right to terminate their contract, without observing the mandatory month's notice and still receive severance.

The amendments still have to pass the parliament. Other countries have adopted similar measures, for example, Lithuania has decreased the amount that must be paid during the crisis to 40%.

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