The Knesset approved a bill protecting workers in Katyusha-affected areas from layoffs and unpaid wages during the declared state of emergency, the Industry, Trade and Labor Ministry said Tuesday. Workers staying home due to Homefront Command instructions now would be ensured timely payment by their employers of the gross wages and social benefits, not including one-time payments, yearly payments and overtime hours, the employers will receive as a result of the compensation for indirect damages agreement approved for the business sector earlier this week. Other absences - including sick leave, reserve duty and vacations - would be deducted from vacation time at a rate of one day for every five days of leave. The earlier approval of compensation for indirect damages suffered by the business sector also included wages employers pay to absent workers. Although the law currently only applies to July wages, it authorizes Industry, Trade and Labor Minister Eli Yishai to extend the order into August, as well, once approval is received from Finance Minister Avraham Hirchson and the Knesset Finance Committee. Laying off workers absent due to Homefront Command instructions or security constraints related to the confrontation with Hizbullah would be illegal and subject to both criminal and civil sanctions, the ministry said. This part of the legislation would expire August 15. The legislation applies to employees living or working in the same parts of the North covered by by-laws passed earlier by the Finance Committee on compensation for indirect damages. Yishai thanked the Knesset for allowing the government to "tangibly demonstrate solidarity ... with the residents of the North - both employees and workers - in the form of paying wages and giving compensation, and not declarations alone." Separately, Finance Minister Avraham Hirchson told a special session of the socioeconomic cabinet - held Tuesday in Haifa - that the ministry had set up a task force to begin work towards rehabilitating the North "the day after the war." The team would help "return the North to its regular agenda, give [the region] a boost, and allow it to recover quickly and get back to routine," Hirchson said. Stressing the importance of holding the session in Haifa, Hirchson announced that he would hold office in the city during the crisis. Yishai has been holding office in Sderot for the past month. "We must be near to the residents of the North and their leaders," Hirchson said. In Haifa, the cabinet decided to allocate NIS 100 million in additional funding to the region's local authorities - on top of an earlier NIS 50m. lump sum - to be divided among municipalities on the front-line by a committee headed by the director-general of the Interior Ministry and including representatives of the Finance Ministry and the Prime Minister's Office. Hirchson urged the committee to complete allocation of the funds quickly. Noting the low level of activity at the Haifa port, Hirchson said he would promote efforts to bring the port back "to full activity as quickly as possible the day after the war." Port representatives, however, emphasized the recent upturn in operations at the facility, calling attention to the arrival Monday of four ships that unloaded 4,000 containers. Separately, business sector representative Shraga Brosh praised Hirchson's initiative to set up a fund to provide loans for small- and medium-sized businesses to get through the crisis period. "It is very important to create a speedy mechanism through the fund to help businesses in real time," Brosh said, calling on the fund to provide NIS 1.2 billion in loans. Every business with a yearly volume of up to NIS 30m. should be able to benefit from the fund, he added. Brosh estimated that 75,000 businesses in the North are suffering financial damages related to the war, totalling about NIS 3.3b., thus far. Business Data Israel, meanwhile, said Tuesday that payment reliability suffered in July and was expected to decline "even further over the coming months due to the war in the North." "The damages of the war in the North, in addition to the law on credit limits, which took effect recently, will lead to worsening [of business conditions] in various indices," said BDI co-CEO Tehila Yannai. In coming months, services, tourism services, hotels and agricultural production are expected to be "significantly" hurt, while building and infrastructure contractors are expected to improve their standing, the business research group said. In July, clients paid suppliers 12 days later on average than the agreed average deadline of 86 days, effectively extending the actual credit period to 98 days from 96 days in June. The closure of businesses of all descriptions in the North for "such a long period of time" would have a negative impact "not only on the businesses themselves, but on their entire business environment, like a domino effect," Yannai said. Israel Export Institute chairman David Artzi, however, expressed optimism that exports to the US could still grow 14 percent to some $8.5 billion by the end of 2006 "if the war ends soon."