Knesset Approves Increase in Minimum Wage

Monthly salaries will rise to minimum of $1,270 a month by 2017; Histadrut: This is huge news for the 25% of salaried employees who will be affected.

Zvi Zrahiya
Zvi Zrahiya
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The Knesset, October 27, 2014.
The Knesset, October 27, 2014.Credit: Emil Salman
Zvi Zrahiya
Zvi Zrahiya

The Knesset gave final approval Wednesday to legislation that will gradually increase the minimum wage to 5,000 shekels ($1,270) a month over two years.

The first stage in the increase will come on April 1, when the minimum will rise from its current rate of 4,300 shekels a month to 4,650 shekels.

The law also provides that the minimum will not fall below 47.5% of the average wage as of April of the same year, even if that results in an increase beyond the sums provided in the law. The full increase will go into effect as of January 1, 2017.

“An increase in the minimum wage is huge news for 25% of salaried employees in the country,” said Histadrut labor federation chairman Avi Nissenkorn. “This Knesset did too little for the weak and because of the election, the discourse has changed,” he said in reference to the Knesset election on March 17.

Prior to the final vote, Prime Minister Benjamin Netanyahu, who since December has been acting finance minister and social affairs minister, ordered that 100 million shekels be allocated in the 2015 budget for recipients of so-called special service government benefits. This includes the severely disabled.

The additional funding is designed to allow them to deal with the added expense that they will incur in payment to caregivers as a result of the hike in the minimum wage at which many caregivers are employed. It was also decided that elderly recipients of nursing care stipends will get increases as the minimum wage goes up between now and 2017.

Knesset Labor, Welfare and Health Committee chairman Haim Katz (Likud) reached an agreement with Nissenkorn over the increased benefits for the disabled. The two also resolved to set up a team with representatives from the Finance Ministry, National Insurance Institute, social affairs and justice ministries and the Histadrut to develop criteria by February 26 relating to compensation payments.

The session leading up to the final Knesset vote on the bill was marked by a confrontation between Economy Minister Naftali Bennett (Habayit Hayehudi), who submitted the bill, and former Histadrut chairman MK Amir Peretz (Hatnuah).

“For years,” Bennett said, “the Histadrut protected the strongest [workers] committees, because they became members in their masses of the Labor Party,” which in the upcoming election is running on a joint ticket with Peretz’s Hatnuah. “Instead of really seeing to the needs of the weak population, as usual you talked and we acted.”

“There’s a limit,” Peretz shot back. “With all of your chutzpah, you are attacking the Histadrut, without which [the bill] wouldn’t have happened. You’re insolent, manipulative and are spouting lies. Three months ago you voted against a similar bill that I presented.”

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