Israel: Two New Vacation Days, Six New Sunday Holidays

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By Jenny David

July 25—A law raising the minimum number of paid annual vacation days from 10 to 12 took effect in Israel July 1 following cabinet committee approval of an additional Sunday holiday every two months.

Industry representatives have opposed both moves, saying the growing financial burden may make exporters less competitive on global markets and reduce the profitability of domestic businesses because employers will need to cut production or pay more overtime to keep their businesses operating.

The first extension since annual paid vacation was introduced by Israeli law in 1951, the new legislation will add the first extra day this year, the second in January 2017

Parliament member Rachel Azaria, the bill's sponsor, noted that even with the new entitlement Israel is “still far behind” world averages of 15-20 vacation days annually.

Other Organization for Economic Cooperation and Development member states have raised their minimum vacation periods to three or four weeks as job mobility has become more prevalent, according to the new law.

“Within Israel, there is also a sizable gap between vacation days for unionized and non-union workers,” Azaria said. “This law aims to narrow that gap.”

The amendment also provides for the paid-vacation entitlement to grow to 14 days in an employee's sixth year on the job and 15 in the seventh and adds one more paid vacation day for every year thereafter up to a 30-day ceiling.

Six Long Weekends Proposed

The Ministerial Committee on Legislative Affairs meanwhile approved a proposal to legislate a long weekend. Under the bill, which the parliament referred to a ministerial committee meeting with employers June 29, there will be a long weekend in Israel—from Friday through Sunday—six times a year beginning in 2017. The change will effectively shorten the work week by one hour or 8.5 hours every two months.

Israel's current weekend runs from Friday afternoon to Saturday night to include only the Jewish Sabbath and Muslim Friday prayers. Many Israelis do not work on Fridays, but stores and entertainment venues are generally open a half-day.

As a result, Israelis work an average of 43 hours per week, compared with an OECD average of 40 hours or less.

The six free Sundays will be scheduled during the summer, Passover and Hanukah school vacations, bringing workers more into line with their children's schedules as well as international standards, the legislation's supporters said.

“The move toward long weekends will dramatically change the characteristics of Israeli labor,” according to the legislation's parliamentary sponsor, knesset member Eli Cohen. The Sunday holidays, which he hopes to expand to 12 in coming years, will “reduce worker burnout, improve the work-life balance, quality of life and synchronize vacation days between students and their parents,” Cohen said.

Industrial Employers Propose Productivity Link

Employers called for any additional vacation time to be linked to higher productivity, which has proven consistently low in Israel.

According to a 2014 Finance Ministry report, Israeli labor productivity is 24 percent below the OECD average at about $37 an hour.

Shraga Brosh, president of the Manufacturers Association of Israel, said that the long weekends would cost the economy some 8 billion shekels ($2 billion)–or 1 percent of output.

“The result of increased vacation days will be higher prices for products and poorer labor and business conditions,” Brosh said in a statement.

“It's obvious that we all would like an extra six days of vacation this year, but I need to say that this does not increase equality. It is impossible to take six days of vacation this year and have no one pay for it,” added MAI deputy CEO Ruby Ginel.

“At the end of the day, when businesses operate in a fully competitive and complex market, they either have to increase product prices to compensate for the vacation days or change workers' salaries accordingly,” Ginel said.

More than half of 210 companies polled by the MAI said the initiative would reduce economic activity, and 30 percent said it would encourage them to move their operations outside Israel, Ginel noted.

The Federation of Israeli Chambers of Commerce, by contrast, said the Sundays off would be good for local retailers, since many people will spend the day shopping and at recreational activities. And hoteliers said it would lead to more vacation guests.

Move Could Increase Economic Inequality

The plan could also be hard on low-wage earners, who are most likely to be drafted to work on the Sunday holidays, albeit with overtime pay.

“Children of the poor will have nowhere to go, and their parents will be working at the places where the rich will go for leisure,“ said Michel Strawczynski, a researcher at the Hebrew University and head of the Economics and Society program at the Jerusalem Van Leer Institute. Offsetting higher overtime pay, low-wage service workers will have to pay for more child care, he said.

The salaries of hourly workers, such as cleaners, will also drop as offices and other businesses close for the day, Strawczynski added.

To contact the reporter on this story: Jenny David in Jerusalem at correpondents@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.

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