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Saeima Social Matters Committee approves amendments to overtime pay procedure

RIGA - Saeima Social and Employment Matters Committee today approved amendments to the Labor Law, which stipulate setting overtime pay at no less than 50 percent of the employee's wage if collective agreement has been signed in a given industry, and the amendments will now be reviewed by Saeima in the final reading.

At the same time, the amendments specify that such collective agreements will also have to stipulate a substantial increase in the minimum wage across the industry, which will have to be at least 50 percent higher than the official minimum hourly or monthly wage.

Saeima Legal Affairs Bureau's representatives told the committee, however, that the bureau would not be able to represent Saeima should the amendments be contested in the Constitutional Court, to which the authors of the bill replied that the bill was in line with the Constitution and such a legal dispute was unlikely.

As reported, under the current regulation the extra pay for each hour of overtime work is 100 percent of the standard hourly wage.

According to the Labor Law, a collective agreement in a sector is entered into by employers that employ more than 50 percent of the sector's workforce or whose turnover exceeds 50 percent of the industry's total turnover. The collective agreement then becomes binding on all employers and employees in that sector. The main objective of collective agreements is to improve protection of the interests of employees, encourage competition and development, and reduce the shadow economy.

The new overtime pay procedure has also been approved by representatives of employers and trade unions.

President Raimonds Vejonis last November nevertheless sent the amended Labor Law back to Saeima for a revision. “The state has to guarantee by law equal opportunities for everyone. As we combat shadow economy in one sector, we must not put employers and employees in other sectors in disadvantage,” the president said.

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