Introduction

When managing employees across borders, few things can trip up a business faster than misunderstanding local labour laws. Latvia and the United States, while both market-driven economies, take very different approaches to employment rights, terminations, and worker protections. For any business operating (or planning to operate) in both regions, knowing the key differences isn’t just a legal necessity - it’s a strategic must.

We’ve supported clients who assumed they could mirror their US practices in Europe, only to be met with fines, disputes, or reputational harm. Understanding the employment landscape in both countries helps you build better systems, support your people, and reduce risk.

Quick Tips

• Latvia has far stronger worker protections than most US states - plan accordingly.

• At-will employment is not recognised in Latvia - terminations require valid reason and due process.

• Overtime and working hour regulations differ significantly between the two countries.

• Local employee consultation and notification periods are key in Latvia.

• US labour law varies heavily by state - don’t rely on federal law alone.

Employment Contracts: Mandatory in Latvia, Optional in the US

In Latvia, a written employment contract is mandatory before the first working day. It must clearly outline job duties, pay, working hours, termination terms, and more. Employees are entitled to receive a written contract in Latvian, even in international companies.

In the US, employment contracts are not required in most states. Many roles are covered by offer letters and employee handbooks, and the majority of employment is 'at-will' - meaning either party can terminate the relationship without cause, unless restricted by contract or discrimination laws. While this offers flexibility, it also introduces inconsistency and risk in cross-border teams.

Terminations: A Formal Process vs At-Will Flexibility

Latvia’s labour law requires a valid reason for dismissal and typically mandates a notice period, often up to one month. In many cases, employers must consult with trade unions or justify dismissals with documented performance issues, redundancy needs, or misconduct. Severance pay is also often due.

Compare this with the US, where an employee can usually be dismissed without notice or severance, unless protected under specific laws (e.g. anti-discrimination, FMLA) or a collective agreement. However, certain states (like California or New York) have stricter rules, and missteps around classification or protected characteristics still carry major risks.

For global companies, this difference often causes friction. I once supported a US-headquartered tech firm that issued a sudden redundancy email to its Latvian team, thinking it mirrored US best practice. Within days, the local labour inspectorate was involved. We worked quickly to issue corrective communication, apply appropriate consultation procedures, and ultimately avoid formal penalties.

Working Hours, Leave, and Overtime

Latvia follows the EU Working Time Directive - employees generally work 40 hours per week, with a legal limit of 60 hours (including overtime) in any seven-day period. Overtime must be agreed in writing and paid at a minimum of 100% premium. Employees also enjoy at least four weeks of paid annual leave, in addition to public holidays.

The US, in contrast, has no federal cap on working hours and no statutory paid leave requirement. While the Fair Labor Standards Act (FLSA) mandates overtime at time-and-a-half for non-exempt employees working over 40 hours per week, the practical application varies widely. Many US employers offer 10-15 days of paid time off as a discretionary benefit rather than a legal requirement.

This difference has real-world consequences. One European client I advised insisted on replicating their generous EU leave policy in their newly acquired US branch. While well-intentioned, it created resentment among long-standing US staff with less favourable terms. We restructured their benefits communication to highlight parity in value rather than format - a small shift that maintained fairness and boosted morale.

Final Thoughts

The bottom line? Latvia and the US have fundamentally different views on the employer-employee relationship. While the US model prioritises employer flexibility, Latvia (like many EU countries) puts greater emphasis on security and structured processes.

This doesn’t mean one is better than the other - but it does mean you can’t manage them the same way. Cross-border employment calls for tailored systems that comply with local laws while preserving your company’s core values and culture.

What’s next for your global people strategy?

If you’re operating in both Europe and the US - or planning to - book a free compliance check-in or HR audit with ThinkGlobal HR. We’ll help you navigate differences, align your contracts, and avoid common pitfalls. With bespoke support, multi-language capability, and a key success manager by your side, we make international HR simple, scalable, and sound.