One phone call on a Monday morning -- "I will not be in today, I am ill" -- sets a chain of financial and administrative obligations in motion that most Latvian employers only half understand. Day one is unpaid. Days two through nine fall on the employer's budget. Day ten shifts the burden to the state. Miss a step, miscalculate a day, and VID or VSAA will notice.

Roughly 38% of employees in Latvia take at least one sick leave period annually. For a company of fifty, that means twenty or more separate sick-leave events per year, each requiring correct calculation and timely reporting.

Who Pays What -- And When

Latvian sick leave operates on a three-tier payment structure:

| Period | Who Pays | Rate | |--------|----------|------| | Day 1 | Nobody | Unpaid (waiting day) | | Days 2-9 | Employer | Not less than 75% of average earnings | | Day 10 onward | VSAA (state) | 80% of average contribution wage |

The transition from employer to state responsibility is sharp and absolute. If an employee is ill for 8 days, the employer pays 7 days (days 2 through 8). If the illness extends to 12 days, the employer still pays only days 2-9, and VSAA covers days 10-12.

The Employer's Payment: Days 2-9

The employer must pay at least 75% of the employee's average daily earnings for these 8 calendar days. Some collective agreements or internal policies set this at 100%, but the law requires a minimum of 75%.

Calculation of average daily earnings:

The average is computed from the employee's earnings over the previous 6 calendar months before the month in which the illness began. Total gross earnings for those 6 months divided by the number of calendar days in those months (minus any days the employee was on sick leave, vacation, or otherwise absent).

Example: An employee earning EUR 2,000 gross monthly falls ill in April 2026. Average daily earnings from the previous 6 months:

Total earnings (October 2025 - March 2026): EUR 12,000
Calendar days in period: 182
Less: 10 vacation days, 0 prior sick days = 172 effective days
Average daily earnings: EUR 12,000 / 172 = EUR 69.77

Employer sick pay per day: EUR 69.77 x 75% = EUR 52.33

For 8 employer-paid days (days 2-9): EUR 52.33 x 8 = EUR 418.60

This amount is subject to IIN and employee VSAOI, just like regular salary.

(In practice, we find the 6-month lookback catches employers off guard when the employee had significant overtime or bonuses in that period -- the sick pay base ends up higher than expected.)

Documentation: The Sick Leave Certificate

The employee must obtain a sick leave certificate (darbnespējas lapa) from their physician. Since 2020, these are issued electronically through the e-health system. The employer accesses them via VID EDS.

Employer obligations upon receiving sick leave notification:

Record the first day of absence
Within 5 working days of the employee's return (or the end of the employer-paid period), submit the calculation to VID
Pay the employer's portion with the next salary payment

The employer does not need to "approve" sick leave. If a physician has issued a certificate, the leave is legitimate. Refusing to honor it, or pressuring employees to work while on certified sick leave, violates the Labour Law and can result in penalties from the State Labour Inspectorate.

VSAA Payments: Day 10 and Beyond

From day 10, the State Social Insurance Agency (VSAA) pays sickness benefit at 80% of the employee's average contribution wage. The average is calculated from contributions made during the 12 months ending two months before the illness began.

The maximum duration of state-paid sick leave is 26 weeks within any 3-year period for the same diagnosis, or up to 52 weeks if the illness is continuous.

The employer's role after day 9:

None, financially. VSAA pays the employee directly.
However, the employer must still reserve the position for the employee during the sick leave period.

Sick Leave and VSAOI: What Employers Miss

Employer-paid sick leave (days 2-9) is treated as income for VSAOI purposes. The employer pays 23.59% VSAOI on top of the sick pay amount. For the EUR 418.60 example above, that means an additional EUR 98.75 in employer contributions.

Total employer cost for one 9-day illness at EUR 2,000 gross monthly: approximately EUR 517.35 (sick pay + employer VSAOI on sick pay).

Multiply this across a workforce, and it becomes clear why some employers invest in wellness programs -- not from altruism alone, but from arithmetic.

Common Situations That Complicate Sick Leave

Employee falls ill during vacation. The vacation is interrupted. Sick leave days are not counted as vacation days, and the unused vacation must be rescheduled. The employer recalculates vacation pay and sick pay separately.

Part-time employees. The calculation method is the same, but the average daily earnings reflect the part-time schedule. No proportional reduction applies to the number of employer-paid days -- it is still days 2-9 regardless of contract type.

Probation period. Sick leave rules apply identically during probation. The employer cannot terminate the contract because the employee is ill (though the probation period is extended by the duration of the illness).

Repeated short absences. Each new sick leave certificate starts the count from day 1 again. An employee who is ill for 3 days, returns for a week, then falls ill again for 5 days triggers two separate employer payment periods. The waiting day (day 1 unpaid) applies each time.

Sick Leave Administration Without the Headache

Tracking sick leave calculations, managing documentation through VID EDS, and ensuring VSAOI compliance on sick pay -- these are exactly the payroll details where errors accumulate. CORVUS ACCOUNTING & TAX manages the full sick leave process as part of our payroll services, so your team stays compliant without spending hours on arithmetic.

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Sick Leave in Latvia: Employer Obligations and Calculations