Minimum-wage Q&A / Salary Deal Means Nothing, for Now

Who is affected by the rise in the minimum wage?

It's not yet clear whether the agreement will even be implemented: The Finance Ministry is fiercely opposed, and unless the cabinet approves it the increase won't affect anyone.

If the agreement is indeed approved and implented, it will affect all the 500,000 or so Israeli workers making minimum wage (NIS 3,850 a month, or NIS 20.70 an hour ) or less.

This includes people working in a range of sectors, including small workshops, non-unionized factories, farmworkers, cleaning and maintenance workers, food and beverage industry waitstaff and those who work for employment agencies.

Will the deal also affect those earning more than minimum wage?

Not technically, but after those on the bottom achieve wage parity with workers slightly ahead of them on the salary ladder it's expected that a cycle of pressure to hike wages farther up the ladder will be created. That will benefit all workers, or hurt all employers, depending on how you choose to look at it.

I earn minimum wage and work part-time. Will the new wage agreement apply to me?

The two-phase addition to the monthly minimum wage (NIS 250 starting in July 2011 and another NIS 200 from October 2012 ) refers only to people who work full-time, that is from 43 to 45 hours a week. Part-time workers will receive a salary increase commensurate to the number of hours they work.

I was just hired by a government ministry, and I earn minimum wage. Two months ago the Histadrut labor federation and the Finance Ministry agreed on a 6.25% salary increase, as well as an NIS 2,000 one-time bonus, that applies to me. Will these benefits be subtracted from pay increase resulting from the rise in the minimum wage?

No, there's no connection between the two agreements and you'll get all the benefits.

I'm the owner of a struggling small factory with 15 employees. I've persuaded my workers to accept less than the new minimum wage, temporarily. Will I get in trouble?

Even if your employees agree to work for less than minimum wage, you're breaking the law if you don't pay them the legal minimum. Think carefully about what you are proposing before you take action.