Since 2019, a general agreement (hereinafter - the agreement) has been in force in the Latvian construction industry, setting the minimum wage for those employed in the industry. The committee of the agreement parties[1] adopted amendments to the agreement in points 2.1, 2.2, and 4.2 in September 2023. The essence of the amendments is indicated below:

In brief:

• As of January 1, 2024, the minimum wage in the industry is €930 per month or €5.57 per hour.
• Until December 31, 2024, there is a transitional period during which the salary for the simplest professions may not be increased.

Minimum wage in construction

The amendments stipulate that as of January 1, 2024, the minimum wage in the construction industry will be €930 per month or €5.57 per hour. Accordingly, a 5% qualification supplement has also increased to €46.50 per month. The overtime supplement remains at a reduced rate of 50%.[2]

The amendments provide for a transitional period during which employers have the right to maintain the existing minimum wage (€780) or hourly rate (€4.67) for the simplest job performers (basic group of 9th professions), such as construction workers (profession code: 9313 01), assistant workers (profession code: 9329 09), repair workers (profession code: 9313 02), etc. The transition period is set for one year and will end on December 31, 2024, so from January 1, 2025, the minimum wage for the simplest job performers will also be no less than €930 per month. When applying the reduced minimum wage, the overtime supplement must be paid at 100%.[3] Note that employers can pay a higher minimum wage to the simplest job performers.

Example No.1

In December 2023, an employer employs a construction worker (profession code: 7111 02) during normal working hours with a monthly salary of €780. As of January 1, 2024, the employer must raise the specified monthly salary from €780 to at least €930 to comply with the minimum wage in the industry.

Example No.2

In December 2023, an employer employs a construction project manager (profession code: 1323 05) during normal working hours with a monthly salary of €900 and a qualification supplement of €39. The total monthly remuneration in December is €939 (900 + 39). As of January 1, 2024, the employer must raise the specified monthly salary from €900 to at least €930 and increase the qualification supplement from €39 to €46.50. Thus, the minimum wage for a qualified employee during normal working hours from January 2024 will be €976.50 (930 + 46.50).

Example No.3

In December 2023, an employer employs a construction worker (profession code: 9313 01) during part-time hours (100 hours) with an hourly rate of €4.67. The total monthly remuneration in December is €467 (4.67 * 100). Considering that a construction worker (profession code: 9313 01) corresponds to the simplest job performers (basic group of 9th professions), the employer has decided, from January 1, 2024, to apply the transitional period rules and maintain the hourly rate for the construction worker at €4.67. So, even in January, the total monthly remuneration is €467 (4.67 * 100). In February 2024, the employer agrees in writing to extend the working hours (168 hours). However, this is not enough, and the employer also agrees in writing with the construction worker on overtime work (2 hours). Therefore, the remuneration for the construction worker for February is €793.90 (4.67 * (168 + 2)), and the 100% overtime supplement is €9.34 (4.67 * 2). The total monthly remuneration in February is €803.24 (793.90 + 9.34).[4]

Example No.4

In December 2023, an employer employs a construction worker (profession code: 9313 01) during part-time hours (100 hours) with an hourly rate of €4.67. The total monthly remuneration in December is €467 (4.67 * 100). As of January 1, 2024, the employer raises the hourly limit for the construction worker from €4.67 to €5.57. The total monthly remuneration in January is €557 (5.57 * 100). In February 2024, the employer agrees in writing with the construction worker to extend the working hours (168 hours). However, this is not enough, and the employer also agrees in writing with the construction worker on overtime work (2 hours). Therefore, the remuneration for the construction worker for February is €946.90 (5.57 * (168 + 2)), and the 50% overtime supplement is €5.57 (5.57 * 2 * 0.5). The total monthly remuneration in February is €952.47 (946.90 + 5.57).

Consequences for not paying the specified minimum wages in construction

Employers failing to provide the minimum monthly wages or hourly rates as per the general agreement will face the same legal consequences as for not paying the state-mandated minimum wages, including administrative fines ranging from €400 to €7100.[5]

[1] Committee meeting No. 17 on September 22, 2023. For more information, see: https://lbna.lv/lv/generalvienosanas/komiteja

[2] Agreement points 2.1.-2.4.

[3] Agreement point 4.2.

[4] Part seven of Article 134 and part two of Article 136 of the Labor Law

[5] Fourth part of Article 61 and Article 159 of the Labor Law