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Latvian government to pull young parents back to labour market

Photo: pixabay.com.
Latvian Chamber of Commerce and Industry has reached an agreement with Welfare Minister Janis Reirs in the formation of a work group that would search for a solution to provide employment to young parents without them losing 70% of state benefits during parental leave.

The current agreement provides as the first step the development of regulations regarding permissible work load (around a quarter of normal work load) while still preserving state benefits in full amount. This is intended to resolve the topical labour force problem in Latvia. In parallel, the work group will also analyse potential options for longer employment periods during parental leave.

Experts will have to determine how much work load is permissible for how much time depending on chosen periods (year, month, and week) to help employers during vacation season or in times when there is too much work for employees to handle without help.

«During out conversation with the minister, all sides agreed that young people on parental leave represent potential labour force that can be used without causing negative fiscal influence on the budget. This will allow people to work part-time and help reduce grey economy at the same time,» LCCI reports.

«We need a system that would be acceptable for all sides. Initially experts will work on a quarter work load amount with full state support. They will also assess risks and solutions for half the usual work load,» said the welfare minister.

LCCI representatives believe young parents who take care of newborns could serve as a major support for employers by working part-time in situations when, for example, it is necessary to replace a worker on vacation or when there is too much work.

«Many companies invite young mothers and fathers to work part-time during the child care period. However, this is often not beneficial to young parents financially, because it forces them to drop a large portion of state benefits. This means businesses have to search for other employees or pay envelope wages, which only increases grey economy and hurts the state budget,» said LCCI council member Lienīte Skaraine.

The agreement with the minster provides that experts will have to search for solutions in cases when young parents want to preserve their self-employed status, which is something regulations to not permit at the moment. Regulations also do not permit mothers and fathers to start a business while taking care of their children and receiving state benefits.

Members of LCCI say they experience shortage of workers almost every day. In a survey performed in July it was found out that 57% of employers have faced difficulties with attracting workers, 31% of respondents mentioned they have experienced some difficulties, but not anything they could not handle. Sectors experiencing the most serious problems include construction, services and retail trade. LCCI found out that employers are prepared to train workers to adapt their skills to company needs. Employers also said they are prepared to provide flexible work hours.


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