Minimum wage rises to NIS 4,852, vacation days increase

The increase is part of a series of wage hikes the government agreed to on threat of a Histadrut strike last year and will continue rising incrementally to NIS 5,300.

June 30, 2016 17:59
2 minute read.

Deal reached to raise the minimum wage in Israel. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

Unskilled workers woke up to a wage increase Friday, as the minimum wage rose to NIS 4,825 (or NIS 25.94 an hour) from NIS 4,650 a month.

The increase is part of a series of wage hikes the government agreed to last year following a threat of a Histadrut labor federation strike.

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The wage then was NIS 4,300, and it will continue rising incrementally to NIS 5,000 on January 1, and NIS 5,300 in 18 months.

In addition, the first stages of a law increasing vacation days will go into effect, increasing vacation days for workers in their first four years on the job to 11, followed by 12 in the fifth year, 14 the sixth, 15 the seventh, and adding one more for every year thereafter until a cap of 20 is reached. (A separate scale will apply to those who work a six-day week).

Thought the news is welcome for workers, some business groups are concerned about the spate of new regulations that, they say, will make it more difficult for businesses to be profitable. For example, in addition to higher minimum wages and more vacation days, the Knesset is considering a bill that would create a banking holiday on Sundays once a month.

Groups such as the Manufacturers Association of Israel say that the burden is increasingly falling on the employers, who may become less competitive in global markets or have to shed workers.

If the latter is the case, it will come at a time of labor market strength. The May unemployment rate fell to a historic low of 4.8 percent, even as more have entered the labor force.

The labor market is one of the bright spots in Israel’s current economic situation.

In addition to new labor regulations, the Knesset Labor, Social Welfare and Health Committee approved on Thursday regulations that will make it possible to more easily import dry food stuffs such as cereals and pasta. These types of products, which are unlikely to become infected with pathogens, must come with official documents testifying to their high quality. The cutting of red tape is expected to result in reduced prices. The regulations had to be approved not only by the Finance and Economics Ministries but also the Health Ministry. Called the “cornflakes reform” (but not involving only cornflakes), the regulations speed up procedures for allowing the food to enter the country, said committee chairman MK Eli Alalouf. “It will be faster, cheaper and more efficient, and help open this food sector to competitors and new products.” The regulations will be published officially and come into effect next week.

The program had originally been approved with a delay at the request of Health Minister Yaakov Litzman (United Torah Judaism), but after a spat with Finance Minister Moshe Kahlon (Kulanu), Kahlon decided this week to move up the implementation date.

Judy Siegel contributed to this report.

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