Employers, Unions, Government Agree to Increase Minimum Wage, Paid Vacation

Bloomberg Law for HR Professionals is a complete, one-stop resource, continuously updated, providing HR professionals with fast answers to a wide range of domestic and international human resources...

By Jenny David

Nov. 20— The Israeli cabinet agreed Nov. 1 to add a fourth stage to a two-year agreement to increase Israel's monthly minimum wage, approving a hike to 5,300 shekels ($1,360) effective Dec. 1, 2017.

The increase supplements an earlier agreement between the Economy Ministry, the Histadrut National Labor Federation and the Manufacturers Association of Israel to gradually raise the minimum wage from 4,300 shekels ($1,110) on Jan. 1, 2015, to 5,000 shekels ($1,290) on Jan. 1, 2017.

Economy Minister Arye Deri said the step would help ensure that working people would not remain below the poverty line.

“The situation in which people work and remain poor cannot exist in an enlightened society,” Deri said. “This amendment will give certainty to workers and employers, and I believe it will pull all workers' salaries upward.”

Vacation Days Also Set to Rise

The ministry, Histadrut and MAI also laid the groundwork for a gradual increase in the minimum number of vacation days provided Israeli workers. The collective wage agreement, which must still be approved by the cabinet and then legislated, raises the minimum vacation time by one day starting in 2016 and adds another day in January 2017 for employees with less than two years in the workforce. Workers with three to four years of seniority will receive one additional vacation day.

Israelis, who work relatively long hours by international standards, currently start their employment with a minimum 10 days of annual vacation time for those working a five-day workweek and 12 days for those working a six-day week. The Economy Ministry said experience will be measured cumulatively so employees will not need to “reset” their benefits every time they change jobs.

“We are correcting an historical injustice,” Deri said at the signing ceremony, adding that “an employee must receive a fair wage and suitable working conditions.”

Agreement Falls Short of Parliamentary Proposal

Member of Knesset Rachel Azaria, who previously introduced a bill that would have approximately doubled annual vacation time, called the lesser agreement “an important first step” toward matching the OECD's minimum of 15 to 20 annual vacation days. In Israel, “the number of vacation days has not changed in 64 years,” Azaria said, “and the time is now. Today's workers deserve to receive the same conditions that the law granted their parents.”

MAI President Shraga Brosh, who signed the new agreement on behalf of the private sector, had strongly opposed Azaria's legislation, saying it would cost the economy billions of shekels and place a heavy additional burden on employers already adjusting to the increase in the minimum wage.

Histadrut chairman Avi Nissenkorn, the third party to the new agreement, also criticized Azaria's proposal saying “raising the number of vacation days for workers cannot rely on one-sided legislation.”

To contact the reporter on this story: Jenny David in Jerusalem at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For More Information

For more information on Israeli HR law and regulation, see the Israel primer.

Request Bloomberg Law for HR Professionals