Planned Amendments to the Labour Law: What Should Employers Prepare For?

Currently, intensive discussions are taking place in the Saeima and among social partners regarding extensive amendments to the Labour Law. Although the Ministry of Welfare has developed a compromise version, the latest information indicates that as of February 2026, the debate has gained new momentum. The Free Trade Union Confederation of Latvia (LBAS) has approached the Saeima with strong objections to several proposals crucial for employers.

How will this uncertainty affect your business, and what are the main "hot spots" to keep an eye on?

1. Overtime Pay: Law vs. Collective Agreement

Currently, the Labour Law mandates all companies to pay an overtime premium of no less than 100%. The essence of the discussion is where exactly a lower premium (50%) may be specified.

• Employers' Proposal: To allow a general provision in the Labour Law for a 50% payment option if the company has a collective agreement.

• Trade Union (LBAS) Objection: They categorically disagree with such a reduction becoming a general norm within the law itself. LBAS believes that each such deviation must be agreed upon separately within a collective agreement, strengthening the role of trade unions in negotiations, rather than simply including it in the main text of the law as a universally available option.

What does this mean for the employer? Until the final version is adopted, it remains unclear whether the 50% premium will be "easier to achieve" (written into the law) or if it will require tough negotiations with trade unions to conclude a collective agreement.

2. Idle Time: When Will It Be Allowed to Pay Less?

The initial draft of the amendments provided that in the event of idle time, after the fifth day, the employer could pay 70% of the salary. However, in February 2026, LBAS emphasized that such flexibility should only be allowed in cases of force majeure or extraordinary circumstances beyond the employer's control.

Why is this important for the employer? It is essential for a company to develop a clear internal action plan for crisis situations. This helps not just to "save" money, but to:

• Preserve jobs: Utilize legal mechanisms so the company can survive short-term difficulties without dismissing the team;

• Ensure transparency: Employees will know the course of action and payment procedures if work cannot be continued for reasons beyond the employer's control;

• Mitigate legal risks: Clearly defined idle time conditions protect the company from disputes with supervisory authorities or trade unions.

3. Stricter Requirements for Failure to Meet Payment Deadlines

The initial draft provided for the employee's right to terminate employment immediately if the payment of wages is delayed for more than two weeks. A crucial nuance from the trade unions: In February 2026, LBAS called on legislators to expand this concept from "wages" to "remuneration." For employers, this implies a much higher level of responsibility:

• Broader scope: Termination could be submitted not only for base salary delays but also for delays in bonuses, premiums, allowances, or vacation compensation.

• Unified deadlines: It is also proposed to set a unified 3-year statute of limitations for claims regarding any type of unpaid remuneration or cases of discrimination.

4. Protection of Trade Union Members (Section 110)

One of the anticipated changes was to simplify the procedure for terminating employment contracts for trade union members in cases of staff reduction. However, the coordination process between social partners on this issue is still ongoing.

What should employers take into account? Since LBAS strongly advocates for maintaining the current status quo, it is safer for companies to operate under the assumption that the protection guaranteed by Section 110 will remain at its current level. This means:

• When planning staff optimization, it remains critical to ascertain employees' trade union membership in a timely manner;

• Employers must anticipate the need to obtain trade union consent for termination unless the final version of the amendments stipulates otherwise.

5. Collective Agreement Benefits – Only for Trade Union Members?

LBAS has come forward with a radical proposal: to stipulate that additional benefits defined in a collective agreement (e.g., health insurance, additional leave, or allowances) should apply only to trade union members, rather than automatically to all company employees.

What does this mean for the employer? If this proposal is supported, it will require a fundamental shift in current HR management practices. Accounting and HR systems will need strict employee segmentation to accurately distinguish which employees are entitled to specific bonuses and which receive only the legal minimum. This will create an additional administrative burden in tracking changes in employee status.

Why is it important to follow the process right now?

Since the amendments have not yet been adopted in the final reading, the current period is a "gray zone" for planning. Any mistake in drafting employment contracts or initiating collective agreement negotiations at this stage could create legal risks in the future.

Our team will help you:

• Navigate the labyrinth of the draft law and the latest Saeima decisions;

• Identify risks and opportunities presented by the planned amendments;

• Maintain an organized and secure payroll process, regardless of the pace of legal changes.

Wait or act? Currently, the right decision is awareness and readiness for various scenarios. We will help you make informed decisions while legislators are still debating.

Contact us, and we will take care of your peace of mind today!