Business, Latvia, Markets and Companies, Taxation

In opinion of the LRA, these amendments are anti-Constitutional and will only increase the number of people living on welfare.

Martins Bondars, the head of the LRA parliamentary faction, has sent a letter to the Latvian president, asking him to return to the parliament for revision the amendments to the law on state social insurance. The amendments will increase labor taxes and result in a surge in the number of people receiving social benefits, Bondars said.

He said the amendments had caused uncertainty about the future among both employers and employees and would create an extra burden on the budgets of local governments which would have to pay social benefits to the part-time employees, who will lose their jobs because employers could not afford to comply with the new rules that required them to pay the social tax on the full minimum wage which those part-time employees even had not earned.

The LRA leader said the new rules would hit hard mostly rural regions and small companies which often employed several part-time employees "One comes in early in the morning to make products, the second employee is selling them to customers during the day and the third one arrives in the evening to clean the premises," Bondars explained.

"This is no way for the government to treat its people," he said. Demanding larger social insurance contributions would result in more people claiming social benefits or leaving Latvia to work abroad.

Several business organizations also have said that the new rules would require employers to make a tough choice between firing employees and paying them unofficially.