Who’s Going to Pay Workers in Quarantine? As Deadline Looms, No Decision’s Been Made

A court ruled in July that employers should not have to cover the growing cost, but the question of who will remains unsettled

Empty offices in a Tel Aviv high-tech center amid the coronavirus pandemic, June 16, 2020.
Empty offices in a Tel Aviv high-tech center amid the coronavirus pandemic, June 16, 2020.Credit: Eyal Toueg

Hundreds of thousands of Israelis face the possibility they will have to foot the bill for their coronavirus quarantine starting in October, unless the government acts over the next three weeks.

The High Court of Justice ruled in July that the state could no longer compel employers to pay workers ordered into quarantine by deeming it sick pay when COVID-19 is only suspected but not diagnosed. The order goes into effect October 1, so unless the government steps in to cover sick day costs, quarantined workers will receive no money for the two weeks they are in insolation.

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The number of Israelis being put into quarantine has been rising in the second wave of the pandemic, from about 14,200 at the start of June to 80,500 as of August 31, according to the Manufacturers Association trade group, drawing on Health Ministry statistics.

The Manufacturers Association estimates that since the onset of the coronavirus in February, employers have paid out some 2.6 billion shekels ($780 million) in sick pay to employees in quarantine. But the growing number of people in quarantine in recent weeks is causing the bill to rise and with the start of the school year this week, the number and the cost will probably grow further, it predicts.

Israel is an outlier in terms of sick pay policy for quarantine. The Organization for Economic Cooperation and Development estimates that on average, employers in member countries cover just 30% of the cost while governments pay the rest. Until the High Court ruled, Israeli employers paid everything.

A bus in Tel Aviv, July 8, 2020.Credit: Moti Milrod

In mid-August Economy Minister Amir Peretz and Labor Minister Itzik Shmuli appealed to Finance Minister Yisrael Katz to call a meeting with employers and union officials to agree on a solution. Although it’s the Labor Ministry that sets policy on matters like this, without the treasury’s support for a budget to cover the costs no new policy can be implemented.

The treasury said a team, headed by director general Keren Terner Eyal, has been working over the last several weeks on proposals, but the team is not believed to include representatives from any other ministries. “The team is expected to present its conclusions soon,” the Finance Ministry said, without setting a date.

In any case, with just over three weeks left till the court deadline, the delay and lack of information have left businesses, especially small businesses, without the means to cover sick pay, unsure what their obligations will be.

“In spite of the importance of the matter and its direct impact on the broad public, the government has yet to set up a framework to pay for worker quarantine time ordered by the state,” Ron Tomer, the Manufacturers Association president, said in a letter last week to Katz and other relevant officials.

“We won’t agree to any delay beyond the date established by the High Court for any reason. We refuse to let employers continue paying for quarantine days, which puts a huge cost on their shoulders,” he said, noting that every day of delay added to the burden since employers are continuing to pay the costs until the deadline.

One option is for the government’s National Insurance Institute to cover the costs out of its own budget. But assigning it the responsibility would involve special legislation and then giving it extra money out of the state budget.

A man wears a mask as he walks through Jerusalem, July 2, 2020Credit: Ohad Zwigenberg

Right now, Israeli law doesn’t recognize quarantine as a reason to qualify for NII sick benefits. The Histadrut labor federation is interested in changing that because it would expand the current narrow definition of sickness for purposes of sick pay, which applies only in cases where a worker can’t perform his or her functions for health reasons. A wider definition would give workers the right to get sick pay for such things as an annual physical.

The labor federation cited the quarantine issue as one reason why it declared an official nationwide labor dispute last week.

“Ensuring sick day payment for workers ordered into quarantine is one of the most burning issues for the economy right now – it has important economic implications for the working public,” said the Histadrut in a statement, accusing the Finance Ministry of foot-dragging.

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