According to the Pay Transparency Directive 2023/970 (“Directive”), the concept of work of equal value covers four aspects: skill set, accountability, necessary effort and working conditions. As the Directive is to be implemented by June 2026, these aspects have become topical. This article deals with the legislature’s guidance.
The concept of “value of work” was implemented in the Latvian legislation back in 2002, when the Labour Law came into force. In the European Union (EU) framework, this concept has been topical since the 1970’s1 and has also been widely assessed in EU case law2.
Although the concept of “value of work” is not new, employers are only analysing it now in the light of the coming into force of the Pay Transparency Directive. Judging the value of the work, employers have come to the realization that they do not really know how to calculate it. This can be understood because job value estimates have not been at the top of employers' priority list before. It is true that the EU legislature has assessed this issue fairly broadly3, allowing an insight into the future and a sufficiently reliable forecast of what aspects will need to be considered.
A skill comprises the knowledge, abilities and attitudes required to do the job. The three most important skills concern learning:
The International Labour Organisation4 states that these skills can be assessed through an analysis:
There is formal and informal accountability, and both types need to be assessed, as responsibility is often not always assumed by the formally accountable person. Actual accountability requires knowledge of the way a task is carried out and often involves physical effort or activity. There can be different types of accountability for:
Effort is the reaction of an employee to the workload assigned to them. The term “workload” means all effects to which people are exposed at the workplace. In addition to physical strain, mental and emotional strain must also be assessed.
4. Working conditions
This criterion includes all characteristics of the work process (e.g. the task to be performed, the means required to perform the work, the work results, etc.) as well as the effects on the environment of the person performing the task. In addition, the discomfort caused by the work, the physical, psychological and social environment and the risk of injury and illness caused by the tasks or the working environment, as well as the duration of the effects of these factors, should be taken into account, provided that workers comply with existing occupational health and safety regulations.
If you have any comments on this article please email them to lv_mindlink@pwc.com
Ask questionIn Latvia, medical costs are very high for many people, especially for patients with serious illnesses, and the state does not cover them in full. Employers can support their employees financially, but the existing regulation makes this financially disadvantageous. The bill, which is in its 3rd reading in Parliament (Saeima), proposes significant changes that could change this system and allow employers to cover medical costs without an additional tax burden. This article informs you about the expected changes and the consequences for employers and employees alike.
Today’s business often spreads across several countries, making it difficult to tax business income properly. A key challenge for companies is to determine whether they have a permanent establishment (PE) abroad. The situation is complicated further by countries possibly applying different PE criteria and interpreting PE rules in their double tax treaties differently.
Electrical vehicles (EVs) are gaining traction. According to the Auto Association, Latvia set a record in new EV registrations in 2023: 8.8% of total registered new passenger vehicles were electrical. Episode 41 of our podcast features Viktorija Lavrova, a PwC tax manager, and Aleksandrs Afanasjevs, a tax consultant, explaining what tax aspects should be considered if a company buys an EV, and whether the employer can reimburse EV charging costs if it’s being used for private as well as business purposes.
We use cookies to make our site work well for you and so we can continually improve it. The cookies that keep the site functioning are always on. We use analytics and marketing cookies to help us understand what content is of most interest and to personalise your user experience.
It’s your choice to accept these or not. You can either click the 'I accept all’ button below or use the switches to choose and save your choices.
For detailed information on how we use cookies and other tracking technologies, please visit our cookies information page.
These cookies are necessary for the website to operate. Our website cannot function without these cookies and they can only be disabled by changing your browser preferences.
These cookies allow us to measure and report on website activity by tracking page visits, visitor locations and how visitors move around the site. The information collected does not directly identify visitors. We drop these cookies and use Adobe to help us analyse the data.
These cookies help us provide you with personalised and relevant services or advertising, and track the effectiveness of our digital marketing activities.