Video Games Company Sega Fined for Delayed Wage Disbursement to Israeli Employees

Supreme Court of Israel strikes down appeal by electronic games company, slapping them with a penalty for dragging their feet on paying several minimum-wage workers.

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Any employer failing to pay its employees minimum wages, on time, will face a stiff fine, the Supreme Court ruled week. In overruling an appeal filed by Sega Enterprises after it was ordered to cough up penalties by two lower courts, Israel's highest judicial body ruled declared that companies in violation would be liable for us to NIS 202,000 per worker.

Four employees of Sega, working at its electronic games site at the Bat Yam mall, claimed that the employer had repeatedly put off paying their minimum-wage salaries. After examining the case, the Ministry of Commerce, Industry and Labor filed a lawsuit against Sega. The District Court overruled Sega’s lawyer, who claimed that the law regulating minimum wages does not stipulate the dates of payment and that no breach of contract occurred as long as the salaries were eventually paid. The court ordered Sega to pay a fine of NIS 727,000 for nine breaches of contract, amounting to 40% of the maximum allowed per each case (NIS 202,000).

Sega appealed at a higher court but lost again, after admitting paying the outstanding amounts after a two-month delay. The fine was however reduced since the lawsuit itself had been filed after a long delay.

Sega then appealed to the Supreme Court, which also ruled against it. Justices Elyakim Rubinstein, Hanan Melcer and Zvi Zylbertal explained that the term "minimum wage" implies not only an amount, but also a fixed time frame for payment.

By not paying by the ninth of each month, the company could not be considered to have paid the minimum wage set by the law,” they argued. Irregular or delayed payment, according to the justices, does not constitute proper disbursment of minimum wages

How economically free is Israel? Well, moderately free.Credit: Tali Shani

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