The Latvian government has now published the full draft text of its proposed law. While it broadly follows the structure and spirit of the Pay Transparency Directive, it includes several deviations. Although they are broadly nuances rather than fundamental changes, they are details that employers in Latvia need to understand.  

Key takeaways for employers

Latvia has published its draft transposition of the EU Pay Transparency Directive, and it contains several important departures from the Pay Transparency Directive's baseline that employers operating in Latvia should be aware of now.  

• Pay information in job adverts becomes mandatory. Latvia's draft goes further than the Pay Transparency Directive by requiring employers to include pay details in job advertisements, not simply at an early stage of the recruitment process.
• Pay ranges may not be enough. The draft suggests employers may need to provide a specific gross or estimated hourly rate, rather than a pay range. This could significantly affect how roles are advertised.
• Note the 1 June reporting deadline. While the first pay gap report is due by 7 June 2027, all subsequent reports must be submitted by 1 June each year — a tighter recurring deadline that's easy to overlook.
• Fines are capped — but the cap is low. Maximum penalties for corporate employers sit at €14,000, with no enhanced fines for repeat offenders. This could change as the draft develops.
• Latvia's definition of "remuneration" is narrower than the Pay Transparency Directive's definition of “pay”. The draft limits qualifying remuneration to amounts paid on a regular basis, which could leave some forms of compensation outside scope.
• The draft is still evolving. There's time for amendments before finalisation, so employers should monitor progress closely while beginning preparations now.  

Pre-employment pay transparency: stricter than the Pay Transparency Directive

When must pay information be provided?

The Pay Transparency Directive requires employers to share initial pay information at a stage early enough to allow informed negotiation. Latvia's draft is more prescriptive, requiring pay information to be included in the job advert itself, where an employer advertises a vacancy. Although this approach aligns with what many employers already do - and mirrors the approach taken in several US states - it is notable that Latvia has chosen to make this mandatory. Note, however, that where a role hasn’t been advertised but speculative applications are received, the applicant retains a general right to receive pay information before any employment relationship is established.  

What must be disclosed?

The Pay Transparency Directive permits disclosure of "initial pay or its range." Latvia's draft appears to require something more specific: a gross or estimated hourly rate of the total monthly or annual initial remuneration.  

It's not entirely clear from the current text whether pay ranges will be accepted. If they aren't, this could create practical difficulties. An employer who provides a specific estimate but then wants to offer a different package will need to manage that conversation carefully.  

Employers should think now about their communications strategy for recruitment. The importance of involving talent acquisition teams and anyone involved in the hiring process in an employer’s Pay Transparency Directive compliance strategy should not be underestimated. Those employees should understand the importance of their role in justifying pay decisions, with additional training provided where needed.  

Pay reporting: watch the deadline

Latvia's draft aligns with the Pay Transparency Directive's reporting thresholds:

• 250+ employees: Report from 7 June 2027, then annually.
• 150–249 employees: Report from 7 June 2027, then every three years.
• 100–149 employees: Report from 7 June 2031, then every three years.

Although the first reports are due by 7 June 2027, subsequent reports must be submitted by 1 June in the relevant year. That's a week earlier than we expect many employers will assume and could catch them off guard if they're not paying attention.  

After reports are published, employees, their representatives and other bodies can request additional explanations about their pay gap reports. Latvia's draft introduces a mandatory two-month deadline for employers to respond to those queries. The Pay Transparency Directive only requires employers to respond within a "reasonable time."  

Definition of "pay": a narrower scope

One of the most significant deviations is Latvia's approach to defining what counts as "pay" (or "remuneration" in the draft's terminology).  

The Pay Transparency Directive captures "ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind" received in connection with employment. Latvia's draft is narrower. It defines remuneration as "remuneration for work to be paid on a regular basis," including salary, allowances, bonuses, and "any other form of remuneration related to work."  

The requirement for regularity, and the specific enumeration of allowance types, could mean that irregular or non-standard forms of compensation fall outside scope. This is an area where Latvia may under-implement the Pay Transparency Directive, and employers should watch for amendments.  

If Latvia does adopt this narrower definition, employers should consider how it affects their pay reporting strategy, particularly if a significant proportion of total compensation sits outside the scope of "regular" pay.  

Penalties: a potential gap

Latvia's draft sets out a tiered penalty regime. For corporate employers, fines range from €1,100 to €14,000, depending on the offence. Natural persons face fines of €350 to €700. Warnings may also be issued.  

These are fixed-cap fines, not linked to employer size. The Pay Transparency Directive requires penalties to have a "real deterrent effect," and a €14,000 maximum may not meet that threshold for larger organisations.  

The Pay Transparency Directive requires “that specific penalties apply in the case of repeated infringement”. In this respect, there's also a notable gap. Although, in practice, repeat offences are likely to be responded to with larger fines within the fixed range, Latvia’s draft doesn't include specific penalties for repeat offences.

Job evaluation criteria: a subtle shift

The Pay Transparency Directive requires employers to assess roles using core criteria of skills, effort, responsibility and working conditions as well as other factors that are "relevant" to the position. It also includes specific instructions not to undervalue soft skills. Latvia's draft adjusts this. It adopts the same core criteria but then requires employers to account for “other factors that are essential" for the role. This is a narrower standard. Latvia has also replaced the Pay Transparency Directive’s negative duty not to undervalue soft skills with a positive requirement to assess "general skills”.

In practice, this could mean employers have slightly more flexibility in determining which factors shape their pay structures, although they'll need to ensure their job evaluation frameworks still capture what matters in the context of their business.  

What should employers do now?

While Latvia's draft may currently closely follow the terms of the Pay Transparency Directive, but amendments are possible. In practice, it is rare for laws to be implemented in their exact, original form.  

But that doesn't mean employers should wait to begin preparing.

• Audit your current pay data. Understand where you stand on gender pay gaps before reporting obligations kick in.
• Review your recruitment processes. Prepare for the requirement to include specific pay information in job adverts. Consider whether your current approach to communicating pay at the offer stage needs to change.
• Train your people. Talent acquisition teams and hiring managers need to understand their role in justifying pay decisions. This is particularly important if Latvia confirms the requirement for specific pay figures rather than ranges.
• Diarise the deadlines. The first reports for employers with 150 or more employees are due 7 June 2027, but subsequent reports are due by 1 June. Build this into your compliance calendar now.
• Monitor the draft's progress. We'll continue to track developments and update our EU Pay Transparency Directive Hub as the legislation is finalised.

For more on how the EU Pay Transparency Directive is being implemented across Member States, visit our EU Pay Transparency Directive Hub.  

If you'd like to discuss how Latvia's draft, or the broader Pay Transparency Directive, affects your organisation, please get in touch with our team.