Latvian unions warn of €146 million wage loss as labour law overhaul sparks political crisis

Key facts

• LBAS has around 60,000 members across its constituent organisations.
• The proposed amendments would halve overtime pay from 100% to 50% of the regular wage.
• LBAS estimates workers would lose €146.3 million in wages in 2026 if the changes pass.
• The ETUC executive committee adopted a statement on 11 March urging Latvian MPs to reject the amendments.
• A meeting with President Edgars Rinkēvičs is scheduled for 15 May to discuss the Labour Law amendments.
• The Saeima Social and Labour Affairs Committee has already backed several proposals that unions say worsen workers' conditions.

Unions take Labour Day fight to the streets and the president's office

Latvia’s Free Trade Union Confederation (LBAS) used the annual Labour Day celebrations on 1 May to counter what it calls a deep public misunderstanding of union work, even as a far more consequential battle over the country’s labour code moves toward a climax. LBAS deputy chair Gita Oškāja told the crowd gathered in Uzvaras Park from 11 a.m. to 2 p.m. that unions are too often associated only with problems and disputes, when their core mission is to secure normal working hours, rest periods and wage negotiations. Oškāja acknowledged that many Latvians remain sceptical of collective action, attributing the reluctance to a cultural legacy of isolation. “Historically, Latvians have been ‘single-farmstead people’,” she said, suggesting that a deep-seated aversion to forming communities hampers union recruitment. Yet the stakes of that disengagement are about to become starkly visible.

Proposed labour law rewrite targets overtime pay and collective agreements

The package of amendments now before the Saeima Social and Labour Affairs Committee would cut overtime compensation from the current 100% premium to just 50% of the regular wage – a change the LBAS says amounts to a redistribution of income at the expense of workers. The draft also limits the so-called ultra-activity of collective agreements, meaning that once a collective contract expires, its terms would no longer remain in force, and removes the requirement for an employer to obtain union consent before dismissing a union member. The Latvian Employers’ Confederation supports the changes, arguing that collective agreement provisions should not survive the contract’s end and that the union-consent clause for dismissals should be eliminated. Employers also back the 50% overtime floor, which they see as a reasonable compromise.

LBAS warns of €146 million wage loss and €100 million tax shortfall

the overtime-pay reduction alone would cost Latvian workers €146.3 million in lost wages in 2026. The knock-on effect on state revenues would be severe: the social security, basic and municipal budgets would together lose more than €100 million in tax receipts. The union federation has repeatedly insisted that overtime must remain compensated at 100% and has accused the government of trying to cut costs on workers’ backs. The European Trade Union Confederation (ETUC) has weighed in forcefully. Its executive committee adopted a statement on 11 March calling on Saeima deputies to reject the amendments, warning that the changes would undermine labour standards and worker protections across Latvia.

The political calendar: 15 May meeting with President Rinkēvičs

The next decisive moment comes on 15 May, when representatives of unions, employers, ministries and the Saeima Social and Labour Affairs Committee will meet with President Edgars Rinkēvičs for a broader discussion on the Labour Law amendments. Oškāja confirmed the meeting, which follows weeks of committee work that has already advanced several proposals the LBAS considers detrimental to workers’ welfare and legal position. The committee has backed changes not only to overtime pay and collective agreement duration but also to provisions that unions say weaken protection against discrimination in dismissal cases. The LBAS argues that union involvement is critical not just at the end of an employment relationship but throughout its duration, to ensure that employers provide a decent working environment.

Cultural barriers and employer resistance complicate union outreach

Oškāja noted that while some employers have established a good dialogue with unions, scepticism and resistance remain widespread. “It doesn’t change very quickly,” she said, but expressed hope that both sides would eventually realise they can help each other improve the working environment for everyone’s benefit. The LBAS deputy chair stressed that informing the public about the existence and role of unions is a huge task, one that is as much about culture as about law. With only about 60,000 members in LBAS-affiliated organisations – and additional non-affiliated unions operating in large companies and banks – the union movement remains a minority voice in a country where the instinct to organise collectively is weak. The coming weeks will test whether that voice can still sway the legislative process.

Outlook: a defining test for Latvia’s social dialogue model

The Labour Law amendments have become a flashpoint for broader questions about the balance of power between capital and labour in Latvia. The ETUC’s intervention elevates the dispute to a European stage, putting pressure on Rinkēvičs and the Saeima to consider international labour standards. The LBAS’s estimate of a €146 million wage loss gives the debate a concrete, measurable stake that goes beyond abstract principles. Whether the 15 May meeting produces a compromise or a confrontation will determine not only the fate of the current bill but also the credibility of Latvia’s social dialogue framework for years to come. For now, the unions are betting that a combination of street-level education and high-level lobbying can reverse a legislative train that has already left the station.

The bottom line

• The Saeima committee has advanced amendments that would halve overtime pay, cap collective agreement duration and remove union consent for dismissals.
• LBAS estimates workers would lose €146.3 million in wages in 2026, with state budgets losing over €100 million in tax revenue.
• The European Trade Union Confederation issued a statement on 11 March urging rejection of the amendments.
• A high-level meeting with President Edgars Rinkēvičs is set for 15 May to discuss the reforms.
• Union membership in Latvia remains low, with LBAS representing about 60,000 workers, partly due to cultural resistance to collective action.
• The outcome will test the strength of Latvia’s social dialogue and its alignment with European labour standards.