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Industry Minister Eli Yishai will soon submit a proposal to the cabinet under which the government would pay full salaries to employees of businesses in the Gaza area who have been absent from work during the past two weeks because of Qassam rocket fire.

According to existing law, thousands of employees in Sderot and other nearby communities are not entitled to wages for the days they were absent, regardless of the reason for their absence. Accordingly, employees who were afraid to go to work and either stayed at home or left the area may not receive full salaries for the month of May.

The Knesset Finance Committee approved a package of benefits for Sderot and other Gaza border towns at its last meeting. It included a 50 percent discount on municipal tax (arnona) for businesses, full exemption from payroll tax for nonprofit organizations helping area residents, and government grants for companies that are suffering financially. In addition, it stipulated, factories, businesses and gas stations in the area, as well as Sapir College), will receive compensation for indirect damages incurred due to the security situation.

However, the benefits package did not include compensation for employees of these organizations - unlike the arrangements made to address the damages of the Second Lebanon War, which ensured full salaries for employees absent from work during July and August 2006, less 20 percent of their accumulated vacation time.

The Histadrut labor federation urged the government yesterday to grant residents of the south the same compensation granted to residents of the north during that war.

Employee attendance has declined by an estimated 40 percent since the recent rocket barrages on southern Israel began, as many employees decided either to remain with their children at home or to leave the area entirely.

In addition, many businesses are having trouble obtaining credit from the banks. However, not all businesses have suffered equally from the rocket fire: Companies both large and small that invested in protective reinforcement say that their efforts have borne fruit over the past few weeks, reporting far lower rates of absenteeism, of around 6 percent. Association President Shraga Brosh called on the government to finance the reinforcement of businesses in the area.