For Israeli Workers, a Year of Hard-earned Progress

The minimum wage rose, workers received more vacation days and the self-employed finally got some attention.

MK Rachel Azaria.
Emil Salman

The past year was a good one for the Israeli worker. A number of new laws making things easier for the working public were passed by the Knesset or are in advanced stages of legislation. The minimum wage was raised – to 4,825 shekels ($1,283) this coming July, rising to 5,300 shekels by December 2017 – and a framework agreement signed that grants public sector employees about a 7.5% raise. As part of the agreement, the employees will receive a 2,000-shekel, one-time bonus. It was later decided to give contract workers the bonus, too.

At the same time the wage agreement was reached, a pilot project began that will, for the first time, allow government employees to work from home; internal tenders for civil service jobs were abolished; and a Knesset committee was established to discuss raising the retirement age for women.

The “Sunday reform,” in which employees will get a Sunday off once a month – and therefore get another 12 days of paid vacation annually – was also reintroduced and put back on the government’s agenda.

Self-employed workers got their share of legislation, too, and the Finance Ministry recently proposed new recommendations for unemployment compensation and pensions for non-salaried workers.

One of the more interesting laws passed this past year was the amendment to the annual paid vacation law, which was sponsored by MK Rachel Azaria (Kulanu). This law raised the minimum number of annual paid vacation days to 12, up from the previous 10.

Azaria says the economy can only benefit from the law, since a worker’s well-being is directly connected to their productivity. The two additional vacation days will be added in two stages: the first on July 1, 2016; the second on January 1, 2017.

An amendment sponsored by MKs Tali Ploskov (Kulanu) and Aliza Lavie (Yesh Atid), changing the calculations for maternity leave pay, will have a big effect, too. The amendment corrects a long-standing distortion in which maternity leave allowances were set according to the mother’s salary over the three months before giving birth.

The sponsors said calculating the maternity pay according to the months before the birth was unfair to the self-employed, who were often forced to reduce their working hours during pregnancy. Under the change, the calculation will use either the year preceding the birth or the calendar year of the birth – whichever is higher. The law came into effect last month.

Another new amendment benefiting mothers, whether they work or not (and again sponsored by Lavie), concerns women suffering a stillbirth. The National Insurance Institute used to grant these women full rights to birth allowance and entitlement to maternity leave from the 26th week, but this has now been lowered to 22 weeks. This law also took effect last month.

Nursing hours for fathers, too

In addition to the laws already passed, the coming Knesset session will see votes on other proposed legislation: A proposal for paternity leave, sponsored by MK Tamar Zandberg (Meretz), has been approved for its first reading by the Knesset Labor, Welfare and Health Committee. This would allow fathers to miss five days of work after the birth of a child – three days would come at the expense of annual vacation, while two days would be considered paid sick days.

Under the proposed law, new fathers and fathers-to-be will also be given three paid vacation days (at the expense of their paid sick leave) to accompany their spouses for various treatments or examinations – and not just life-threatening tests, as the present law allows. These days will come in addition to the day of the birth itself, which is already a day of legal paid vacation.

Another proposed law intends to aid equality in parenting. The bill, sponsored by Azaria, was approved by the labor committee for its first reading in the Knesset.

The law would let parents divide between themselves the “nursing hour” – the one hour a day currently granted to mothers in the first four months after they return from maternity leave. The law would change the term “nursing hour” to “parenting hour,” and “maternity leave” to “birth and parenting period.”

Another bill, sponsored by MKs Merav Michaeli (Zionist Union) and Roy Folkman (Kulanu), is named “Sick pay – absence due to a child’s illness.” It has already passed its preliminary reading in the Knesset.

If passed, this law would grant a couple paid leave starting from the first day of absence from work because of the illness of a child, and they could split the burden of caring for the child.

The present version of the law often causes only one parent to take care of a sick child, since payment – at the expense of the employee’s paid sick leave – only starts on the second day of absence, and the law requires only half-pay for the second and third days of the child’s illness. On the fourth day, payment is in full, but again at the expense of the employee’s own sick leave.

Pensions for the self-employed

Other changes made over the past year include some that benefit the self-employed, as well as small businesses.

One limits the time that public bodies have to fulfill their financial commitments.

The Economy and Industry Ministry’s Small and Medium Businesses Agency – along with the Lahav organization representing the self-employed and small businesses – initiated the law, which will require government ministries, municipalities, institutions of higher education and HMOs to pay up within set time frames.

In addition to dictating a payment schedule, the bill levies sanctions for not paying on time, too. Invoices will have to be paid within 30 days after the end of the month they are submitted, or, at the latest, within 45 days of the submission of the invoice. In certain cases, such as engineering work, the supplier will be paid within 70 to 85 days at the latest.

A short time before the Passover holiday, the Finance Ministry signed an agreement in principle on providing mandatory pensions for the self-employed. Under the proposal, self-employed workers will pay 4.45% of their salaries – up to a ceiling of half the average wage (about 4,500 shekels a month) – for a pension plan; above this amount, they will pay 12.55% of their salaries into the pension plan.

This means a self-employed person who makes about 7,000 shekels a month would pay 513 shekels of this into their pension plan. This would include a number of tax benefits, as well as a minimal pension on retirement.

The issue of unemployment compensation for the self-employed will henceforth be handled as part of this agreement.

Opening up civil service jobs

Another achievement – albeit for a more limited, but not insignificant group of workers – is the ending of internal tenders for job positions in the civil service. Previously, public service jobs were open only to employees of the ministry where the job was; if the job couldn’t be filled by an internal candidate, it was then opened to all civil service employees in a tender. And only then, if no one had still been found, was the job opened to the general public.

The elimination of these internal tenders, which was included in the framework agreement signed this year between the Finance Ministry and the Histadrut labor federation, and is expected to take effect in January 2017, will also shorten the process for filling government positions.

Other good news includes the discussions focusing on the retirement age. Finance Minister Moshe Kahlon appointed a committee, heading by the treasury’s budgets director, Amir Levy, to discuss raising the retirement age for women. The panel, which is also studying the possibility of automatically raising the retirement age for men and women according to changes in life expectancy, is expected to present its recommendations by the end of August.

89% support for organized labor

A survey by the Social Economic Academy, ahead of Sunday’s International Workers’ Day, reveals that about 70% of the Israeli public believes the state should provide more social services to its citizens, even if this means higher taxes. And some 89% of respondents see the growth of organized labor as a positive thing that contributes to reducing social inequality.

In addition, 43% of the Israeli public feels a right-center government can promote greater social justice than a left-center government. About 35% feel a left-center government could promote social justice and reduce inequality, while 11% think a unity government could do so. The survey sampled 60 people, using questionnaires and telephone surveys.

“Ideas that previously were on the margins of the public debate, such as returning natural resources that were privatized to state ownership, strengthening organized labor and a more just system of taxation, are no longer threatening to the public,” said Rami Hod, executive director of the Social Economic Academy.

“A quiet but significant revolution is ongoing in Israeli public opinion on issues of society and economics, even if we don’t see it translated into clear political expression yet,” added Hod.