Employers welcome Latvia's revised guest worker salary rules

Two months ago, rules were adopted that employers can pay guest workers the average wage in the sector, instead of the national average, as was previously the case. Employers welcome the government's decision but admit that the effect will only be felt in the coming months, Latvian Radio reported April 10.

With the government's decision of January this year, employers are allowed to pay foreign workers a wage that is not less than the average gross monthly wage of Latvian workers in the sector in the previous year or equivalent to the minimum wage set by the sector's general agreement.

Employers interviewed by Latvian Radio admit that the change in the regulation was long awaited, but the effect is not yet felt in real life. There are two reasons for this. Firstly, the most active period of employment of foreigners is still ahead, and secondly, not all employers have noticed that the government has adopted changes to the law.

"This also shows that the legislator lives in a bubble and the industry lives in a bubble, and the moment there is a change in legislation, it is often the case that nobody even notices. I still see signs that maybe they don't believe that this is the case, that now instead of 1.5 thousand you can pay 930 euros," said Normunds Grīnbergs, President of the Latvian Builders' Association.

Those working in the construction sector should take into account the fact that there is a general agreement and, according to Grīnbergs, not everyone understands this fact either:

"I have to explain a lot that now after these changes we can pay the minimum wage set in the general agreement - €930. And that's more than €500 less than it was before. This is a significant relief for importing labor, bringing their pay conditions roughly in line with what we pay local professionals."

The fact that attracting foreign workers will become more and more important with the summer season is also acknowledged by those working in the hospitality sector. Sandis Solims, director of the hotel "Gutenbergs", says that only one young Ukrainian woman is employed in the hotel he manages, but Ukrainians do not have the status of guest workers in Latvia.

He estimates that the hotel business will soon see pay changes, but the sector is not doing well this spring: 

"This spring has not been very flattering for tourism. I don't remember the Old Town being so empty in the last 25 years. The situation is quite serious, tourism is down. But the season is about to start and then we will start looking for more and then attracting foreign workers will be very important again."

Lauris Aleksejevs, owner and chef of the restaurant 36. līnija and vice-president of the Latvian Restaurant Association, says that Latvians are going abroad to work and it is difficult for local caterers to compete with this level of salaries. "This means that we have to look for people from other countries - Uzbekistan, Kazakhstan, maybe something closer."

Aleksejevs says he has not yet started looking for staff for the summer season, including foreigners, so he is not yet experiencing the new pay system. He points out that not all caterers will be affected by the new pay rules.

Aleksejevs added that the next battle the industry needs to fight is about seasonal workers and the reduced tax regime: "A potato planter can work 90 or 100 days a year under the reduced tax regime, but a potato peeler cannot."

The law on seasonal workers and reduced tax regime does not yet apply to the hospitality sector, but Aleksejevs points out that the catering sector also needs workers who work, for example, two days a week.

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