RIGA, Nov. 9 (Xinhua) — Latvian President Raimonds Vejonis on Friday returned to the parliament amendments to the labor law allowing employers to reduce overtime pay in sectors where the minimum hourly wage is substantially increased, the president’s spokespeople said.
According to the new regulation which the president has refused to sign into law, the hourly overtime pay will have to make up at least 150 percent of the standard hourly wage in those sectors where employees have concluded general collective agreements.
In sectors without such collective agreements employees will be entitled to an overtime pay that is twice as high as their standard hourly wages.
The new regulation was drawn up to eradicate unreported business activity and under-the-table wages in industries like construction and food industry. The Latvian parliament passed the amendments to the labor law on November 1, 2018.
However, President Vejonis believes that these efforts to fight shadow economy in particular sectors leaves entrepreneurs in other sectors in disadvantage, which is unacceptable.
“As we fight shadow economy in one industry, we must not put employers and employees in other industry in an unfavorable situation,” the president said.
Ombudsman Juris Jansons, the Latvian Chamber of Commerce and Industry, (LCCI), Foreign Investors’ Council in Latvia (FICIL) and a trade union of pediatric surgeons have also called for a revision of the overtime pay regulation and the parliament legal office questioned its compliance with the Latvian constitution.
The LCCI had proposed paying 150 percent of the standard hourly wage for the first two overtime hours in all sectors of the economy, but that proposal was rejected.