Whilst playing out different legal scenarios in my mind, I’ve come across one which will not leave until it has been addressed in an article. Say I work in Latvia, but my colleagues in France earn more, or I work in a smaller regional town like Rēzekne, but my colleagues from the state capital Rīga earn more. Is geography-based pay difference even legal?
By Edgars Riņķis, Sorainen Latvia Senior Lawer
Geographical pay differences are adjustments employers make to salaries depending on where an employee lives or works. The idea behind this is pretty straightforward – if you live in a place with higher living costs, the employer adjusts the salary accordingly to offset them. It is, however, easy to see that this may also be used to optimise labour costs. The new pay transparency legislation raises quite a few legal concerns for employers.
Payment differences due to employment in different states, counties or cities are not something new. There have been numerous articles and discussions whether such payment is fair, for example, in 2024 the pay differences in different regions of Latvia were explored by journalists of the Radio of Latvia. However, in Latvia, the focus has been on general fairness aspects rather than on legal preconditions or implications of such remuneration practices. Thus, we have now arrived at the objective of this article, which is to take a look at the legal side of this remuneration practice, keeping the new pay transparency legislation in mind.
Read the whole article here.
