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The Knesset Labor, Welfare and Health Committee yesterday approved the second and third readings of a bill that would levy fines and even prison time on employers who withhold wages from employees. If the law is passed employers could be fined NIS 35,000 for failing to pay wages on time. If workers are not paid for more than three months the fine could continue to rise and employers could face up to six months in prison.

Notably, criminal proceedings against an employer would not prevent an employer whose wages were withheld from suing their employer through the labor courts.

The bill's approval completes a series of 12 laws that were included in the economic "package deal" reached earlier this year among the union, the government and employer representatives. The chairman of the committee, MK Haim Katz (Likud), said that the approval marks an important advance in the area of labor rights in Israel.

"After lengthy discussions, all the parties have emerged satisfied. We did not force a government coalition majority, but worked realistically to produce the optimal law, which will substantially improve labor rights in Israel and eradicate the incidence of withholding wages," Katz said.

MK Shelly Yachimovich (Labor) said that the bill signals enormous progress for labor rights. MK Orly Levy Abekasis said that the legislation process would result in a balanced, acceptable law that protects the rights of workers.