On Uniform Remuneration System for Government and … to board and council members of public or local government capital companies, port board members and port managers. (2) The following

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Draft

On Uniform Remuneration System for Government and Local

Governments Officials (Employees)

Chapter I 1 General provisions

Article 1 Purpose of the Law The purpose of this Law shall be to establish uniform conditions for determining remuneration for public and local government officials (employees). Article 2 Scope of the Law (1) The Law shall apply to the following government and local government institutions: direct public administration institutions, Cabinet of Ministers, Chancery of the President of Latvia, Saeima (Parliament), State Audit Office, Central Land Commission, Central Election Commission, Ombudsman's Office, Prosecutor's Office, courts, indirect public administration institutions and derived public entities (state higher educational establishments and institutions established by them, local governments and institutions established by them, planning regions), public establishments, National Radio and Television Council, Public Utilities Commission, State Culture Capital Foundation, as well as to board and council members of public or local government capital companies, port board members and port managers. (2) The following persons shall be deemed officials (employees) of public or local government institutions for the purposes of this Law: persons who are employed in the institutions listed in Paragraph (1) of this Article on the basis of an employment contract, are engaged in state service, are elected in office or otherwise carry out certain official (work) duties in a public or local government institution. The Law shall not apply to port managers, employees of public or local government capital companies, except for medical practitioners. (3) Provisions of legal acts governing employment legal relations shall apply to officials (employees) insofar otherwise regulated by this Law.

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Chapter II

Remuneration System

Article 3 Remuneration (1) The following shall be deemed remuneration of officials (employees) of public and local government institutions for the purposes of this Law: remuneration for work, social guaranties and other benefits and payments granted by the employer. (2) The following shall mean remuneration for work for the purposes of this Law: monthly wage and salary, additional payments, bonuses and cash awards. (3) When drafting internal remuneration rules, employers shall consult with employee representatives. (4) The provisions concerning additional payments, bonuses, social guaranties, leave (except for annual leave), as well as other benefits and payments granted by the employer which are subject to the limitations set by this Law shall be deemed as recommendations with respect to state higher education institutions and institutions established by them, local governments and institutions established by them, planning regions. (5) Remuneration may be reviewed within the process of drafting the state budget or its amendments, taking into account state budget possibilities, and evaluating economic situation in the country, changes in gross domestic product, changes in productivity, and inflation and deflation. If economic indicators change, the Cabinet of Ministers shall submit to the Saeima for approval a proposal on indexing the indicator that serves as the peg for monthly salary. The Cabinet of Ministers shall decide on changes in monthly wages and salaries established by the Cabinet of Ministers. Both public and local government institutions shall apply uniform approach to remuneration review.

Chapter III

Monthly Salary Article 4 General principles for establishing monthly salary in breakdown by positions' groups (1) Monthly salaries shall be established by linking them with a coefficient to average wages and salaries of employees in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats:

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1) members of the Parliament and local governments; 2) officials approved and appointed by the Parliament. (2) Monthly salaries shall be determined in the amount and according to the procedure established by the Cabinet of Ministers: 1) by classifying positions in accordance with the Catalogue of Public Institutions Positions and by determining the monthly salary group corresponding to the position, and taking into account the qualification degree of an official (employee): for officials (employees) of direct public administration institutions, employees of Central Election Commission, employees of Central Land Commission, employees of National Radio and Television Council, teachers, employees of Prosecutor's Office and courts, officials (employees) of Money Laundering Prevention Office, employees of Chancery of the President of Latvia, employees of Saeima, employees of State Audit Office, employees of Public Utilities Commission, employees of State Culture Capital Foundation, employees of Ombudsman's Office, for officials of the Ministry of Interior System Institutions and Latvian Prison Administration having special service ranks; 2) according to service ranks and terms of services: for soldiers of professional service; 3) according to classification of capital companies: for board and council members of public or local government capital companies; 4) according to classification of ports: for representatives of port boards and port managers; 5) according to position evaluation: medical practitioners that provide health care services paid for from the state budget in local government education establishments or medical treatment institutions. (3) Monthly salaries shall be established by taking into account value of the position and individual skills and assessment of the official (employee), not exceeding maximum monthly salaries as stated for positions implying similar complexity and responsibility in public institutions: for officials (employees) of state higher educational establishments and institutions established by them, local governments and institutions established by them, planning regions.

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Article 5 Monthly salaries of members of the Saeima and local governments (1) Monthly salaries of members of the Parliament and local governments shall be pegged to average wages and salaries of employees in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats, i.e. wages and salaries in Latvia in the pre-budget drafting year shall be taken into account. (2) Officials of the Saeima shall receive monthly salary calculated by applying the following coefficients: 1) member of Saeima – 4.8; 2) Speaker of Saeima – 8.0; 2) Deputy Speaker of Saeima – 7.4; 3) Secretary of Saeima – 7.4; 4) Deputy Secretary of Saeima – 7.2; 5) Chairman of parliamentary group – 5.5; 6) Deputy Chairman of parliamentary group – 5.4; 7) Chairman of committee – 5.5; 8) Deputy Chairman of committee – 5.4; 9) Secretary of committee – 5.4; 10) Chairman of subcommittee – 5.2; 11) Secretary of subcommittee – 5.1. (3) An official of local government shall receive a monthly salary calculated in accordance with the procedure established by the respective municipal or regional council, without exceeding the following coefficients: 1) member of Riga City Council – up to 3.8; 2) member of a republican city council – up to 3.6; 3) member of regional council – up to 2.1; 4) Chairman of Riga City Council – up to 6.8; 5) Chairman of republican city council – 3.6–6.7; 6) Chairman of regional council– 2.1–6.7; 7) Deputy chairman of municipal or regional council who holds a paid for position – up to 6.2; 8) Chairman of Riga City Council committee – up to 5.4. (4) The respective municipal or regional council shall determine remuneration for members (other than members of local governments) of committees, working groups, councils and other administration units established by local governments.

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Article 6 Monthly salary of officials approved and appointed by the Saeima (1) Monthly salary of President of Latvia shall be pegged to average wages and salaries of employees in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats, i.e., wages and salaries in Latvia in the pre-budget drafting year shall be taken into account. When determining the monthly salary of the President of Latvia, the coefficient 8.3 shall apply. (2) Monthly salaries of a member of the Cabinet of Ministers and a parliamentary secretary shall be pegged to average wages and salaries of employees in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats, i.e. wages and salaries in Latvia in the pre-budget drafting year shall be taken into account. When establishing monthly salaries of members of the Cabinet of Ministers and parliamentary secretaries, the following coefficients shall apply: 1) Prime Minister – 8.1; 2) Deputy Prime Minister – 7.9; 3) Minister, minister for special assignments – 7.7; 4) parliamentary secretary – 4.9. (3) Monthly salaries of officials appointed by the Saeima – State Auditor, Chairman of Public Utilities Commission, Ombudsman, Chairman of National Radio and Television Council, Chairman of Central Election Commission, Chairman of Central Land Commission – shall be pegged to average wages and salaries of employees in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats, i.e., wages and salaries in Latvia in the pre-budget drafting year shall be taken into account. When determining monthly salaries, the following coefficients shall apply: 1) State Auditor – 7.1; 2) member of State Audit Office Council – 5.8; 3) Chairman of Public Utilities Commission – 6.5; 4) council member of Public Utilities Commission – 5.6; 5) Ombudsman – 5.7; 6) Chairman of National Radio and Television Council – 4.4; 7) council member of National Radio and Television Council – 2.1; 8) Chairman of Central Election Commission: in-between elections – 4.2 and during election period – 6.7; 9) Chairman of Central Land Commission – 1.

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(4) Monthly salaries of judges and prosecutors shall be pegged to average wages and salaries of employees in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats, i.e., wages and salaries in Latvia in the pre-budget drafting year shall be taken into account. When determining monthly salaries, the following coefficients shall apply: 1) Chairman of Constitutional Court – 7.7; 2) Deputy Chairman of Constitutional Court – 6.8; 3) Judge of Constitutional Court – 6.2; 4) Chairman of Supreme Court – 7.6; 5) Deputy Chairman of Supreme Court, Chairman of Chamber and Senate who has been granted: qualification category I – 6.5; qualification category II – 6.2; 6) Judge of Supreme Court who has been granted: qualification category I – 5.4; qualification category II – 5.1; 7) senator of Supreme Court who has been granted: qualification category I – 5.7; qualification category II – 5.4; 8) Chairman of Regional Court who has been granted: qualification category I – 5.4; qualification category II – 5.1; qualification category III – 4.8; 9) Deputy Chairman of Regional Court and Chairman of Collegium who has been granted: qualification category I – 5.0; qualification category II – 4.7; qualification category III – 7.5; 10) judge of Regional Court who has been granted: qualification category I – 4.6; qualification category II – 4.4; qualification category III – 4.1; 11) Chairman of district (city) court who has been granted: qualification category II – 4.4; qualification category III – 4.1; qualification category IV – 3.9; qualification category V – 3.6; 12) Deputy chairman of district (city) court who has been granted: qualification category II – 4.0; qualification category III – 3.8; qualification category IV – 3.6;

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qualification category V – 3.3; 13) judge of district (city) court who has been granted: qualification category II – 3.6; qualification category III – 3.4; qualification category IV – 3.2; qualification category V – 3.0; 14) Judge of Land Registry Office who has been granted: qualification category III – 3.4; qualification category IV – 3.2; qualification category V – 3.0; 15) Manager of Land Registry office who has been granted: qualification category III – 3.9; qualification category IV – 3.7; qualification category V – 3.5; 16) Prosecutor General – 7.5; 17) chief prosecutor of department of Prosecutor General's Office who has been granted the following rank: senior justice advisor of the state – 6.2; justice advisor of the state – 5.9; 18) chief prosecutor of division of Prosecutor General's Office who has been granted the following rank: justice advisor of the state – 5.4; senior justice advisor – 5.1; justice advisor – 4.8; junior justice advisor – 4.6; 19) prosecutor of Prosecutor General's Office who has been granted the following rank: senior justice advisor – 4.3; justice advisor – 4.1; junior justice advisor – 3.8; without rank – 3.6; 20) chief prosecutor of court district who has been granted the following rank: justice advisor of the state – 4.6; senior justice advisor – 4.3; justice advisor – 4.1; junior justice advisor – 3.8; 21) deputy chief prosecutor of court district who has been granted the following rank: justice advisor of the state – 4.2; senior justice advisor – 4.0; justice advisor – 3.8; junior justice advisor – 3.6; 22) prosecutor of court district who has been granted the following rank:

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senior justice advisor – 3.7; justice advisor – 3.5; junior justice advisor – 3.3; without rank – 3.1; 23) chief prosecutor of District (Republican City) Prosecutor's Office who has been granted the following rank: senior justice advisor – 3.9; justice advisor – 3.7; junior justice advisor – 3.5; without rank – 3.2; 24) Deputy chief prosecutor of District (Republican City) Prosecutor's Office who has been granted the following rank: senior justice advisor – 3.6; justice advisor – 3.4; junior justice advisor – 3.2; without rank – 3.0; 25) prosecutor of District (Republican City) Prosecutor's Office who has been granted the following rank: senior justice advisor – 3.4; justice advisor – 3.2; junior justice advisor – 3.0; without rank – 2.8; 26) prosecutor's trainee – 2.2. Article 7 Monthly salaries of officials (employees) of direct public administration institutions, employees of Central Election Commission, employees of Central Land Commission, employees of National Radio and Television Council, teachers, employees of Prosecutor's Office and Courts, officials (employees) of Money Laundering Prevention Office, employees of Chancery of the President of Latvia, employees of Saeima, employees of State Audit Office, employees of Public Utilities Commission, employees of State Culture Capital Foundation, employees of Ombudsman's Office, for officials of the Ministry of Interior System Institutions and Latvian Prison Administration having special service ranks (1) Monthly salaries of officials (employees) shall be determined in accordance with the group of position held, its level and official's (employee's) qualification degree in the amount and according to the procedure established by the Cabinet of Ministers. 1) The group and the level of the position serving as the basis for determining monthly salary group shall be determined in accordance with the Catalogue of Public Institution's Positions.

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2) The qualification degree of an official (employee) shall be determined in accordance with performance assessment of the official (employee) in the previous period. (2) Employee's monthly salary shall be determined by head of the institution or an official authorised by him/ her; for head of a direct public administration institution – by the minister; for Head of Chancery of the President of Latvia and Head of Corruption Prevention and Combating Bureau – by Prime Minister. (3) The monthly salary of an official appointed for work in the European Union institutions shall be retained according to the procedure specified by laws and regulations. (4) Monthly salary for an official appointed to the position of cadet shall be determined in the amount of the minimum wages. (5) An official of the Ministry of Interior system's institution and Latvian Prison Administration having a special rank of service that has been temporary appointed, in the interests of the state, to a position of a civil servant in the Ministry of Interior or the Ministry of Justice and fulfils civil servant's duties shall receive monthly salary appropriate for the last position he/she held before appointment to the position of civil servant. Monthly salary of an official shall be reviewed if the rules for work remuneration for officials having special ranks of service have changed and the sum of official's monthly salary and additional payment for the special rank of service is less than the monthly salary established for the respective position of a civil servant. Article 8 Monthly salaries of soldiers of professional service (1) Monthly salaries of soldiers of professional service shall be determined according to the procedure and in the amount established by the Cabinet of Ministers taking into account the rank and length of service. (2) A soldier appointed to a position of a higher rank shall receive an additional payment in the amount of the difference between the monthly salaries for the period of fulfilling the higher position duties. A soldier appointed to a position of a lower rank shall receive monthly salary in accordance with his/her rank of service. (3) A soldier who, in the interests of the state, has been appointed to a position of a civil servant and fulfils duties of a civil servant shall receive soldier's

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monthly salary established in accordance with laws and regulations, rations or its compensation in cash and compensation for rent of a flat. Article 9 Monthly salaries for professional athletes that are employees of a structural unit of the Ministry of Defence and the Ministry of Interior Monthly salaries of professional athletes that are employees of a structural unit of the Ministry of Defence and the Ministry of Interior shall be determined in the amount and according to the procedure established by the Cabinet of Ministers. Article 10 Monthly salaries of state higher education establishments and institutions established by them, local governments and institutions established by them, planning regions Public higher education establishments and institutions established by them, local governments and institutions established by them, and planning regions shall classify positions in accordance with the Catalogue of the Public Institutions Positions. Monthly salary of an official (employee) shall be determined by taking into account value of the position and individual skills and assessment of the particular official (employee) in accordance with the scale of monthly salaries established on the basis of assessment of position groups and levels. The monthly salary of an official (employee) shall not exceed groups of maximum monthly salaries as stated for positions implying similar complexity and responsibility in public institutions. Article 11 Monthly salaries of medical practitioners that provide health care services paid for from the state budget in local government education establishments or medical treatment institutions The Cabinet of Ministers shall establish the lowest monthly salary of medical practitioners that provide health care services paid for from the state budget in local government education establishments or medical treatment institutions that have signed agreements on payment for provided health care services. Article 12 Monthly salaries of board and council members of public and local government capital companies Monthly salaries for board and council members of state and local government capital companies shall be determined according to the procedure and in the amount established by the Cabinet of Ministers considering the classification of the capital company.

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Article 13 Monthly salaries of representatives of port boards and port managers Monthly salaries of representatives of port boards and port managers shall be determined according to the procedure and in the amount established by the Cabinet of Ministers considering the classification of the port.

Chapter IV

Additional Payments Article 14 An official (employee), member of a municipal or regional council who has been elected to a paid for position at the regional or municipal council shall receive the following general additional payments. (1) For performing duties of an absent official (employee), the official (employee) shall receive an additional payment of up to 20% of his/her monthly salary. (2) For performing duties of a vacant position in addition to his/her direct duties, the official (employee) shall receive an additional payment of up to 20% of his/her monthly salary. The additional payment for performing duties of a vacant position in addition to one's direct duties can be determined for up to four months. (3) Where several officials (employees) perform duties of an absent official (employee) or a vacant position, the sum of additional payments to such officials (employees) shall not exceed the monthly salary of the absent official (employee) or the vacant position. (4) For performing extra duties in addition to his/her duties as specified in the position description, the official (employee) shall receive an additional payment of up to 20% of his/her monthly salary. (5) Where an official (employee) receives several additional payments for performing duties of absent officials (employees) or vacant positions in addition to his/her direct duties or for performing extra duties in addition to those specified in the position description, the sum of the additional payments shall not exceed 30% of his/her salary. (6) An official (employee), except for soldiers, shall receive an additional payment of 50% of his/her hourly salary for work at night.

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(7) A medical practitioner providing urgent medical treatment, a medical practitioner working in obstetrics and neonate unit, as well as a driver or urgent medical treatment car shall receive an additional payment of 75% of his/her hourly rate for work at night. (8) An official (employee) shall receive an additional payment of 100% of his/her hourly salary for overtime work or work on public holidays. Overtime hours shall be paid for in accordance with the hourly salary rate of the official (employee), as well as there shall be an additional payment of 100% of his/her hourly salary rate. (9) An official (employee) for whom normal weekly working hours have been established shall receive payment for overtime work for each calendar month in accordance with the data of the working hours register. (10) An official (employee) for whom aggregated working time has been established shall receive payment for overtime work for each four calendar months he/ she has worked. Payment shall be made for overtime hours that have been worked during four calendar months in excess of the sum of normal working hours during the said period of time. The sum of normal working hours shall not include the time when work has not been performed because of valid reasons. (11) Where an official (employee) for whom an aggregated working time has been established is engaged in overtime work to ensure events of particular national importance, to prevent consequences of disasters and Acts of God or to perform other extraordinary tasks and where state budget funds have been specifically granted for this purpose, the payment for overtime work shall be made for the respective period of time when said measures have been carried out. (12) Head of institution shall determine the procedure for granting the additional payments referred to in Paragraphs (1), (2) and (4) of this Article, the criteria for establishing the amount of additional payments and exact amounts of additional payments. Article 15 Special additional payments An official (employee) shall receive special additional payments according to the procedure and in the amount specified by the Cabinet of Ministers.

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Chapter V

Bonuses and Cash Awards Article 16 Bonuses (1) An official (employee), member of municipal or regional council who has been elected to a paid for position, except for other representatives elected by the people and higher officials – heads of independent institutions, may receive the following bonuses: 1) for assessment of annual work and its performance results – once a year. The amount of the bonus shall not exceed 120% of the monthly salary. The Cabinet of Ministers shall determine the procedure for paying the bonus and its amount. 2) for work contribution and work quality when performing the action (work) plan of the respective institution for a particular period, as well as when performing extraordinary tasks that are not specified in the action (work) plan. The amount of the bonus shall not exceed 120% of the monthly salary. When evaluating work results and contribution in accordance with the procedure and criteria for determining bonuses established by head of the institution, the amount of a particular bonus for an official (employee) shall be determined by head of the institution or an official authorised by him/her; for head of the institution – by the industry minister; for heads of education establishments subordinated to the ministries – the ministry; for heads of education establishments subordinated to local governments – by the education department of the local government; for employees of local governments – by the municipal or regional council; 3) the amount of bonus for brave and selfless act when performing job duties in emergency situations shall not exceed 120% of the monthly salary. Upon evaluating the particular case, head of the institution or an official authorised by him/ her shall determine the exact amount of the bonus for the official (employee). (2) A board member of a public or local government capital company may receive a bonus if the company has no tax arrears to state and local government budget and the company has earned profit or if there is no profit but the losses are planned to implement the capital company development (investment) programme and have not resulted from illegal act or omission by the board. The bonus shall be paid once a year after approving the annual report and it shall not exceed 120% of the monthly salary. Council members, representatives of capital share holders and employees in charge shall not receive bonuses.

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Article 17 Cash award Once a year, an official (employee) may receive a cash award the amount of which does not exceed one minimum monthly salary.

Chapter VI Allowances

Article 17 General allowances (1) An official (employee) may receive an allowance for child's birth, but no more than in the amount of the average wage and salary in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats, i.e., based on the wage and salary in Latvia in the pre-budget drafting year using a coefficient 2, for each child born in a single birth. If both parents of the child work in a public or local government institution, only one parent shall be entitled to receiving the allowance. If an official (employee) simultaneously works in two or more public or local government institutions, he/she shall be entitled to the allowance only in one institution. (2) An official (employee) may receive an allowance in case of a death of a family member (spouse, child, parents, grandparents, adopters or adoptees, brothers and sisters) or a dependant, but no more than in the amount of the average wage and salary in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats, i.e., based on the wage and salary in Latvia in the pre-budget drafting year. If several members of the family work in a public or local government institution, only one of them shall be entitled to receive the allowance. (3) In case of an official's (employee's) death, his/her family may receive an extraordinary allowance in the amount of up to one monthly salary of the official (employee). (4) When taking annual leave, an official (employee) may receive a leave benefit of up to one monthly salary. The leave benefit shall be granted once a year. The leave benefit shall be paid to the official (employee) when he/she takes leave for the first time in the particular calendar year. (5) The allowances to officials (employees) of state budget institutions referred to Paragraphs (1), (2) and (3) of this Article shall be paid in accordance with the procedure established by the Cabinet of Ministers.

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(6) Local government officials (employees) shall receive the allowances referred to in Paragraphs (1), (2) and (3) within the framework of the local government budget and in accordance with the procedure and in the amount established by the local government council. Article 18 Dismissal or leave benefit (1) Where work or service relations are terminated due to liquidation of the institution or the position, reduction of the number of officials (employees), health condition inappropriate for the specified requirements, as well as due to reaching the length of service necessary for receiving long term pension, the official (employee) shall be paid a dismissal or leave benefit in the following amount: 1) in the amount of one average monthly salary if the official (employee) has worked with the relevant employer less than 10 years; 2) in the amount of two average monthly salaries if the official (employee) has worked with the relevant employer more than 10 years. (2) If an official (employee) is dismissed due to institution's reorganisation and he/she is offered to continue work after the reorganisation in the same or another institution and if the official (employee) agrees, the dismissal or leave benefit shall not be paid. (3) When a soldier is pensioned off from the active service, he/she shall receive a leave benefit if the pensioning off takes place because of: 1) reaching of the maximum age admissible for active service, early termination of a professional service agreement due to health reasons (trauma, disability or illness acquired during the service, in the course of performing service duties) or because of liquidation (reorganisation, reduction of soldiers' number) of the unit (subordinate unit) and he/she is not offered another position, as well as if the term of the professional service agreement expires before reaching the maximum age admissible for active service – in the amount of the last monthly salary; 2) early termination of the professional service agreement due to liquidation (reorganisation, reduction of soldiers' number) of the unit (subordinate unit) if the soldier refuses from the offered position – in the amount of soldier's monthly wages for last two weeks. (4) A soldier who, prior to pensioning off from the active service, has participated in an international operation or Rapid Reaction Force outside the

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Republic of Latvia territory shall be paid the leave benefit referred to in Paragraph (3) 1) of this Article taking into account the last monthly wages that were determined for the soldier in his/her basic place of service in Latvia. (5) When pensioning off a soldier from the active service due to another reason, he/she shall be paid monthly wages till the day of pensioning off. (6) A single allowance in the amount of two monthly salaries shall be received by: 1) an official approved by the Saeima when resigning after expiry of his/her term in office provided he/she has not be re-elected to that position; 2) a member of the Cabinet of Ministers or a parliamentary secretary after he/she has terminated fulfilment of his/her official duties. The allowance shall not be paid if the member of the Cabinet of Ministers or the parliamentary secretary is a member of the Saeima as at the time of losing his/her position; 3) a member of the Saeima whose mandate expires together with expiry of the Saeima mandate if he/she has not been elected in the next Saeima; 4) a member of the Saeima whose mandate expires due to restoration of the mandate to a member of the Saeima who has suspended it for the period of fulfilling the duties of Prime Minister, Deputy Prime Minister, minister, state minister of for period of maternity and child birth leave, adopter's leave, as well as for paternal leave. (7) a Saeima Member having taken a place in the Saeima pursuant to the procedure stipulated in Article 6 of the Rules of Procedure of Saeima within two months of expiry of the Member's mandate shall receive the benefit in an extent proportional to the period starting from the date of the expiry of his/her mandate as a result of the end of the Saeima’s term of office until the date of his/her becoming a Member of the Saeima of the new convocation. The Member shall receive the benefit payment in monthly instalments which shall not exceed one average monthly salary. The payment shall be terminated on the first day of the month after the month when the person has again become a Member of the Saeima. (8) When a local government Member who has been dismissed from the previous job due to being elected to a paid position in a municipal (regional) council cannot be granted the previous job position within two weeks after he/she has completed the discharge of those responsibilities as a result of the expiry of his/her mandate as a Member, the respective local government shall pay that Member a benefit in the amount of two monthly salaries. The above

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benefit shall also be payable to the Member if dismissed from the office based on a Council decision that is not caused by failure to discharge the responsibilities stipulated by the Law or Regulation of the local government, to implement a decision of the local government Council, to comply with a court judgement or laws or Regulations of the Cabinet of Ministers. (9) A local government Member who has been elected to a paid position in a municipal (regional) council and has been released from the office due to a local government merger, shall receive a lump sum in the amount of two monthly salaries from the budget of the newly-established local government in cases when no equivalent position is offered to that Member. (10) Advisers to ministers, the head of a minister's bureau, aides shall be entitled to a benefit in the amount of one monthly salary upon termination of their employment relations. (11) A Board Member of a state or local government capital company shall receive a lay-off benefit in the amount of two monthly salaries, if the Member has been recalled from the office before the end of the term. Article 19 Benefit in case of an injury, mutilation of an official (employee), with the exception of soldiers, or any other damage to their health When an official has been injured or mutilated when discharging the official (service) responsibilities or other damage has been sustained to his/her health and he/she is unable to discharge the official (service) responsibilities, he/she shall receive a lump benefit in the amount and under the procedure set by the Cabinet of Ministers. Article 20 Benefit in case of an injury, mutilation of an official (employee), with the exception of soldiers, or any other damage to their health sustained when participating in international operations or when on a business visit to a region of an international operation (1) If an official (employee) has suffered an accident in discharge of the official (service) responsibilities when participating in international operations or being on a business visit to a region of international operations and, as a result, has been mutilated or other damage has been sustained to his/her health, yet without causing disability, he/she shall receive a lump benefit: 1) in case of serious health problems – in the amount of five monthly salaries; 2) in case of an average seriousness health problems – in the amount of three monthly salaries;

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3) in case of light health problems – in the amount of one monthly salary. (2) If an official (employee) has suffered an accident in discharge of the official (service) responsibilities when participating in international operations or being on a business visit to a region of international operations and, as a result, has been mutilated or other damage has been sustained to his/her health causing disability, he/she shall receive a lump benefit not exceeding 50 000 lats: 1) category one disability – in the amount of 20 monthly salaries; 2) category two disability – in the amount of 15 monthly salaries; 3) category three disability – in the amount of 10 monthly salaries. Article 21 Benefit in case of death of an official, except soldiers, during discharge of official responsibilities In case of a death of an official (employee) having perished in course of discharging the official (service) responsibilities that involve risks to his/her life and health, the funeral expenses shall be covered from the central government budget and the forced heirs shall receive a lump benefit in the amount of 50 000 lats. Article 22 Benefits in case of health problems caused to a soldier and death of a soldier (1) If a soldier has been acknowledged disabled during the service or within one year of leaving active service, as a result of an injury (mutilation, concussion) sustained during the service, discharging service responsibilities or as a result of an illness caused in relation to the military service (occupational disease), he/she shall receive a lump benefit: 1) category one disability – in the amount of 50 monthly (last month) salaries, but no more than 30 000 lats; 2) category two disability – in the amount of 40 monthly (last month) salaries, but no more than 20 000 lats; 3) category three disability – in the amount of 20 monthly (last month) salaries, but no more than 10 000 lats. (2) If a soldier of conscription military service has been acknowledged disabled during the service or within one year of leaving active service, as a result of an injury (mutilation, concussion) sustained during the service, discharging service responsibilities or as a result of an illness caused in relation to the military service (occupational disease), he/she shall receive a monthly benefit:

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1) category one disability – in the amount of 300 lats; 2) category two disability – in the amount of 200 lats; 3) category three disability – in the amount of 150 lats. Should the disability category of a person referred to under this Section change, the size of the benefit shall be reset according to the newly-established disability category. (3) If health problems have been caused to a soldier when discharging the service responsibilities, without causing disability, he/she shall receive a lump benefit: 1) in case of serious health problems – in the amount of five monthly (last month) salaries; 2) in case of average seriousness health problems – in the amount of three monthly (last month) salaries; 3) in case of light health problems – in the amount of one monthly (last month) salary; (4) if a soldier has become ill when in military service and after treatment has been acknowledged unfit for further active service and therefore has to be dismissed from professional service prior to the expiry of the term of service (contract), the soldier shall receive a lump benefit in the amount of three monthly (last month) salaries. (5) Forced heirs of perished active service soldiers shall receive a benefit in the following amount: 1) when a depot soldier or a reservist has perished during active service when discharging service responsibilities – in the amount of 50 000 lats; 2) if a professional service soldier has perished when participating as part of the Latvian National Armed Forces in an international operation based on a mandate approved by an international organisation or participating in an international operation where participation is authorised by a Saeima decision, or when implementing the instructions of a superior relating to the use of arms or armament and associate with real threats to the health and life of the soldier – in the amount of 120 monthly (last month) salaries, but not exceeding 50 000 lats; 3) If a soldier has perished during the service or has died within one year of leaving active service as a result of an injury (mutilation, concussion) or an illness caused in relation to the military service (occupational disease) – in the amount of 120 monthly (last month) salaries, but not exceeding 50 000 lats.

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(6) If a soldier of active service has perished during the service or has died within one year of leaving active service as a result of an injury (mutilation, concussion) or an illness caused in relation to the military service (occupational disease), the Ministry of Defence shall cover the expenses of the required medical rehabilitation services for his/her family members (spouse, children, parents); (7) If a soldier of active service has sustained an injury (suffered from mutilation, concussion) or an illness caused in relation to the military service (occupational disease) and is treated outside Latvia, the Ministry of Defence shall cover the travel expenses to and from the place of treatment of the soldier and hotel (accommodation) costs for his/her family members (spouse, children, parents, but no more than two persons). Hotel (accommodation) costs may not exceed the limits set by the Cabinet of Ministers. (8) If a soldier has perished during the service or damage to health has been sustained as a result of his/her carelessness and he/she has become disabled but the cause of death or health damage is not directly related to discharge of the direct service responsibilities or to misconduct or improper behaviour, he/she or his/her forced heirs may receive part of the benefit referred to under this Article, the size of which shall be determined by the Minister of Defence on a case-by-case basis. (9) The relation of the cause of the soldier's death or injury (mutilation, concussion) to the discharge of the direct service responsibilities shall be established by a service investigator. The degree of gravity of the soldier's injury (mutilation, concussion) shall be established by the attending physician or the Central Medical Examination Commission of the National Armed Forces following the procedure set by laws and regulations. These decisions may be challenged by submitting a respective application to the Minster of Defence within 10 days of issuing the conclusion to the soldier, his/her family members or, at the soldier's request, to another person representing his/her interests. The decision of the Minister of Defence may be appealed to court. The relation of the cause of an illness to the discharge of the service responsibilities shall be established by the Occupational Disease and Radiation Pathology Centre. (10) The benefits referred to in this Article shall be disbursed to soldiers as an insurance compensation referred to in part (4) of Article 35 of this Law. (11) No benefit shall be paid, when the authority performing investigation establishes any facts as a result of which the accident (health problem) can be considered unrelated to the discharge of service responsibilities.

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(12) Disbursements of the benefits referred to in this Article shall not be made at war time. (13) The procedure for investigating and keeping records or accidents during the service of soldiers shall be established by the Cabinet of Ministers. (14) When a soldier has sustained damage to health or a disease or has perished when participating in international operations, the benefits referred to under this Article shall be disbursed based on the soldier's monthly salary established at the permanent service location of the soldier in Latvia prior to sending him/her on the international operation. Article 23 Transfer allowance (1) If an official transferred to another administrative territory in the interests of service changes the place of residence, he/she shall receive a lump-sum allowance in the amount of the monthly salary established for the new position and in the amount of 50% of the new monthly salary for each family member moving with the official to permanently reside in the respective residence of the official. (2) If hiring of a soldier to professional service as well as moving a soldier in the interests of the service involves a change of residence, after moving to the place of service, he/she shall receive a lump-sum allowance in the amount of one monthly salary and 50% of the monthly salary for each family member also moving to the new place of residence.

Chapter VII Compensations and other expenses covered by the employer

Article 24 Compensation to cover tuition fees (1) Tuition fees of up to 50% of annual tuition fee may be compensated to an official (employee), when the official (employee) is a successful student of an educational establishment (nationally accredited higher education establishment, civil education establishment) without suspending the discharge of the official (service, job) responsibilities, in order to obtained the specialised expertise required for the discharge of the responsibilities. (2) After completing the studies, the official (employee) having received a tuition fee compensation, must continue the work at the institution having granted the tuition fee compensation for three years. If an official (employee), having received a tuition fee compensation, wishes to terminate employment with the respective institution earlier than after three years of receiving the

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compensation, he/she shall reimburse the expenses covered by the institution following a procedure set by the Cabinet of Ministers. Article 25 Covering qualification improvement costs The head of the institution shall evaluate the need for improving the qualifications and provide the official (employee) with an opportunity to raise the qualifications, preserving his/her monthly salary and covering the training costs. The procedure for covering the costs associated with improving qualifications shall be set by the Cabinet of Ministers. Article 26 Compensation to cover transport expenses (1) The following transport expenses shall be compensated to Saeima Members: 1) transport expenses related to the discharge of official responsibilities on the territory of Latvia supported by submitted supporting documents showing the actual expenses, but no more than in the amount of the average wage and salary in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats, i.e., based on the wage and salary in Latvia in the pre-budget drafting year using a coefficient 0.15; 2) transport expenses supported by submitted supporting documents showing the actual expenses, but no more than in the amount of the average wage and salary in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats, i.e., based on the wage and salary in Latvia in the pre-budget drafting year using the following coefficients: a) a Member residing in Riga or within the range of 60km outside Riga – 0.21; a) a Member residing within the range of 60 to 150 km outside Riga – 0.33; c) a Member residing within the range of more than 150 km outside Riga – 0.45. (2) If an official transferred to another administrative territory in the interests of service does not change the place of residence, he/she shall receive a compensation to cover transport expenses based on supporting documents showing the actual expenses. (3) Eligible actual expenses are the costs of intercity public transport and the costs of fuel consumed by a transport vehicle owned by or in temporary possession of a Member or an official, when cash receipts with regard to the respective amount of adequate category fuel issued by fuel stations and supporting the expenses have been submitted. No transport expenses shall be compensated to Member or officials having been granted a car for service use.

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(4) An official of a special service rank, professional service soldiers, depot soldiers and reservists shall receive compensation following the procedure and within the amount established by the Cabinet of Ministers for transport expenses incurred when using public transport (except taxi) to ensure the discharge of service responsibilities. (5) An official of a special service rank when travelling to a medical institution for a health check and back, as well as professional service soldiers, depot soldiers and reservists when using public transport (except taxi) to travel to a treatment and recovery place shall receive compensation following the procedure and within the amount established by the Cabinet of Ministers the public transport (except taxi) expenses. Article 27 Compensation of expenses relating to relocation If an official transferred to another administrative territory in the interests of service changes the place of residence, he/she shall receive a compensation for the expenses relating to relocation based on supporting documents, including the transport costs and costs of moving the belongings of the official and his/her family members (dependants), following the procedure and within the amount established by the Cabinet of Ministers. Article 28 Compensation for housing rental and/or utility services (1) A Saeima Member shall receive a compensation for the renting of residential premises or hotel expenses, if he/she does not live in Riga and the discharge of the Member's mandate requires the renting of residential premises or hotel accommodation in Riga. The expenses for the renting of residential premises or hotel expenses shall be compensated based on the actual expenses incurred, but no more than in the amount of the average wage and salary in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats, i.e. based on the wage and salary in Latvia in the pre-budget drafting year using a coefficient 0.5. (2) A professional service soldier not supplied with residential premises at the place of service may receive a compensation to cover the rent of residential premises and utility costs following the procedure and in the amount established by the Cabinet of Ministers. (3) An official of the Ministry of Interior transferred to a position in another administrative territory for a set period of time shall receive a compensation to

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cover the rent of residential premises and utility costs following the procedure and in the amount established by the Cabinet of Ministers. Article 29 Covering communication costs (1) Communication costs shall be compensated for a Saeima Member following the procedure and in the amount established by the Saeima Presidium, but no more than in the amount of the average wage and salary in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats, i.e. based on the wage and salary in Latvia in the pre-budget drafting year using a coefficient 0.2. (2) An official (employee) to whom a mobile phone for service purposes to discharge official responsibilities is supplied by the institution shall receive a compensation of communication costs in the amount established by the head of the institution. An official (employee) using own mobile phone for service purposes to discharge official responsibilities shall receive a compensation of communication costs following the procedure and in the amount established by the head of the institution. (3) A soldier shall be supplied with the means of communication required to discharge service responsibilities following the procedure established by the Minister of Defence. Article 30 Compensation of material damages (1) Damages sustained to the property or health of an official or his/her relatives (parents, grandparents, children, grandchildren, adopted children, adopter, brother, sister or spouse) due to the discharge of the service responsibilities of the official shall be compensated following the procedure and in the amount established by the Cabinet of Ministers. (2) If a diplomat, a technical staff member of a diplomatic and consular service is exposed to warfare, violence, public disorders or natural calamities at the place of service, the Ministry of Foreign Affairs may decide to compensate the material damages sustained to the diplomat or technical staff member as a result of the above circumstances. Article 31 Covering representation costs (1) The representation costs of the President of Latvia shall be covered in the amount of the average wage and salary in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and

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rounded to full lats, i.e. taking into account the wage and salary in Latvia in the pre-budget drafting year. (2) The representation costs of a Member of Saeima shall be covered in the amount of the average wage and salary in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats, i.e. taking into account the wage and salary in Latvia in the pre-budget drafting year and applying a coefficient 0.2. (3) The representation costs of a Member of the Cabinet of Ministers shall be covered in the amount of the average wage and salary in Latvia as published in the official statistics notification for the previous year by the Central Statistical Bureau and rounded to full lats, i.e., taking into account the wage and salary in Latvia in the pre-budget drafting year and applying a coefficient 0.2. (4) The representation costs of officials of the Central Election Commission shall be covered in the amount of the payment for the previous year by the Central Statistical Bureau and rounded to full lats, i.e. taking into account the wage and salary in Latvia in the pre-budget drafting year and applying a coefficient 0.2. (5) The representation costs of a Member of local government shall be covered in the amount established by the municipal/regional council. Article 32 Compensation for the purchase of clothing required to discharge service responsibilities The officials of the Security Police and State Police shall receive a compensation for the purchase of clothing required to discharge service responsibilities. The size of the compensation and the procedure for granting thereof shall be established by the Cabinet of Ministers. Article 33 Catering compensation Soldiers, officials of institutions of the Ministry of Interior system and Latvian Prison Administration with a special service rank shall receive a catering compensation. The size of the catering compensation and the procedure for granting thereof shall be established by the Cabinet of Ministers. Article 34 Allowances and compensations for service abroad (1) During the time when an official (employee) serves abroad, he/she shall receive the following allowances:

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1) salary allowance for service abroad; 2) subsistence allowance for the spouse abroad; 3) subsistence allowance for the children abroad; 4) allowance to purchase household articles when moving to the place of service abroad; 5) allowance to cover the expenses of transport used for the service purposes. (2) During the time when an official (employee) serves abroad, he/she shall receive compensation for the following expenses: 1) apartment rent and utilities costs; 2) costs relating to signing the contract for apartment rental; 3) travel and relocation expenses for himself/herself and family members; 4) health insurance and accident insurance for himself/herself and family members; 5) school and pre-school fees for children; 6) once a year, travel expenses for himself/herself and family members going on a leave to Latvia and returning to the place of service. (3) The size of the allowances and expense compensations referred to in part (1) and (2) of this Article and the disbursement procedure, based on the specifics of the place of service abroad, shall be established by the Cabinet of Ministers. (4) Soldiers sent to service in headquarters of NATO, military headquarters of the European Union and multi-national headquarters of member states of those organisations and sent on international operations based on decisions of the above organisations shall retain the rights stipulated under part (1) and (2) of this Article, with the exception of the entitlement to salary allowance for service abroad. If family members of a soldier reside in a foreign state from which the soldier is sent on an international operation, the soldier shall receive a salary allowance for service abroad in the amount of 50%. Article 35 Health insurance, accident insurance and paid health care (1) An institution may provide health insurance to officials (employees), with the exception of officials of institutions of the Ministry of Interior system and Latvian Prison Administration with a special service rank. The price of the health insurance policy may not exceed the amount established in laws and regulations on personal income tax. If the price of the health insurance policy exceeds the amount established in laws and regulations on personal income tax, the excess amount shall be compensated by the particular official (employee).

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(2) An official of the Ministry of Interior, national security institutions and Ministry of Defence shall be entitled to compensated health care. The provisions of receiving compensated health care services, types of compensated services and payment procedure as well as health care service types and expenses not compensated shall be established by the Cabinet of Ministers. (3) The Ministry of Foreign Affairs shall provide health insurance to all diplomats, officers and staff of the diplomatic and consular service. The Ministry of Foreign Affairs shall provide accident insurance to members of diplomats, officers and staff of the diplomatic and consular service as well as family members of diplomats, officers and staff of the diplomatic and consular service, if the service or official responsibilities are discharged abroad. The size of insurance shall be established by Attestation Commission within the framework of the Ministry of Foreign Affairs budget. To specialised attaches, insurance shall be provided by the Saeima, line ministry or Bank of Latvia within the limits of their respective budgets. (4) A soldier shall be subject to compulsory state insurance. Compulsory insurance of a soldier shall be invalid in wartime.

Chapter VIII Leave

Article 36 Annual leave (1) An official (employee) shall receive paid annual leave of four calendar weeks, holidays exclusive. (2) Teachers shall receive paid annual leave of eight calendar weeks, holidays exclusive. (3) For a soldier having joined professional service, leave shall be estimated in the first year of service for the period from the day of joining the professional service to the end of the year (2.5 days for each month served). In exceptional cases, leave may be transferred to the next year, but for no more than two consecutive years. (4) For officials of institutions of the Ministry of Interior system and Latvian Prison Administration with a special service rank, in the year of starting the service, the annual paid leave shall be estimated for the day of starting service to the end of calendar year and it shall be granted after that official has served at least consecutive six months at the institution or it shall be transferred to the next year.

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(5) Soldiers (pilots, soldiers of aircraft crew, marine crew sailors and field engineers engaged in actual blasting works) shall be granted a leave of 40 calendar days. (6) The annual leave of officials of institutions of the Ministry of Interior system and Latvian Prison Administration with a special service rank and soldiers shall be extended by three days after each five years of uninterrupted service, but for no more than 15 days in total. Article 37 Additional paid leave (1) An official (employee) may be granted additional paid leave of up to 10 business days. The criteria for granting additional leave, the number of additional leave days meeting the criteria and the procedure for granting additional leave shall be established by the Cabinet of Ministers. The additional leave that has not been used within the calendar year may not be transferred to the next year. (2) Additional leave for a soldier: 1) a soldier that has sustained an injury (concussion) or a serious disease during the discharge of service responsibilities shall be granted an additional paid leave of up to six months for the purpose of out-patient treatment and recovery, based on a conclusion by the Central Medical Examination Commission of the National Armed Forces; 2) a soldier may receive an additional paid leave of up to 10 calendar days for domestic or other serious reasons; 3) a soldier may be granted an additional paid leave during an international operation, if the period of his/her participation in the operation exceeds four months. The additional leave may not exceed 15 calendar days, during which the soldier shall be paid the monthly salary. The travel expenses of a soldier to Latvia or place of service abroad and back to the region of the international operation as well as hotel (accommodation) expenses on the way, if any, shall be compensated. The travel and hotel (accommodation) expenses of a soldier shall be covered pursuant to the regulatory act governing the procedure for reimbursement of employee expenses related to business trips; 4) after returning from an international operation to the permanent place of service, a soldier shall be granted an additional paid leave of 20 calendar days, during which the soldier shall be paid the monthly salary. Additional leave shall be granted within a period of no longer than a month after the soldier returns from an international operation. The time period during which additional leave

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is to be granted shall not include the time spent on recovering from injuries or diseases sustained on the international operation as well as the rehabilitation period. Article 38 Unpaid leave (1) If an official (employee) requires and the circumstances of service (work) permit, the official (employee) may be granted an unpaid leave for a period of up to 30 calendar days within a calendar year. Unpaid leave shall not be included into the period giving entitlement to annual leave. (2) If an official has agreed to run for the Saeima or local government council at elections and if an official having used the annual leave so requires, he/she shall be granted an unpaid leave until the day of elections: 1) Saeima elections – up to two months; 2) local government council elections – up to one month. (3) The Presidium may grant a Saeima Member an unpaid leave for the period no longer than one week once every session, during which he/she may not participate in the work of the Saeima. Article 39 Leave for study purposes (1) When an official (employee) is a successful student of a nationally accredited higher education establishment without suspending the discharge of the official (service, job) responsibilities, in order to obtained the expertise required for the discharge of the responsibilities, the official (employee) shall be granted a leave of up to 20 business days for the purpose of passing the state examinations or defending the graduation paper, preserving the monthly salary. If a piece wage has been set for the particular employee, the leave shall be granted paying the average wage. (2) If an official (employee) requires and the circumstances of service (work) permit, he/she may be granted a paid leave for study purposes for a period of up to 10 business days to pass the semester exams. Article 40 Service pension Pursuant to the Law on Service Pensions, service pensions shall be granted to officials (employees) representing professional categories, where, taking into account the specifics of the work (service), it is impossible to continue work (service) until the age of retirement set by the state, due to health reasons.

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Transitional provisions 1. The delegation to issue respective regulations given to the Cabinet of Ministers in the draft law shall be implemented by 30 June 2010. 2. Until 30 June 2010, special laws and pursuant Cabinet of Ministers regulations shall be in effect, insofar that they are not contradictory to the present Law. 3. The Cabinet of Ministers shall submit the Law on Service Pensions to the Saeima by 30 June 2010. 4. Until 1 September 2010, the monthly salaries of teachers shall be based on the Cabinet of Ministers Regulations No.746 "Regulations for Teachers Wages and Salaries" of 24 August 2004. The Law shall take effect on 1 January 2010. Minister of Finance E. Repše