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The Israeli Labor Market:

New Unionizations,

Sectors and Guidelines

Israeli labor law is a breathing entity, constantly evolving through new legislation and

labor court rulings. Below we set out a general overview of certain basic rights granted

to employees in Israel under Israeli labor laws, as well as some key recent developments

in Israeli labor relations. For businesses looking to operate in or expand to Israel, the

following laws are among the most important to be familiar with.

Workweek and Overtime:

The Work and Rest Hours Law (1951) establishes the right

of an employee to receive compensation for overtime (defined as working beyond nine

hours a day and all weekly hours beyond 43 hours) and restricts the employment of

an employee on weekly rest days. For the first two hours of overtime, an employee

is entitled to 125% of his hourly salary and for each additional hour thereafter he is

entitled to 150% of his hourly salary.

Payment of Salary:

The Salary Protection Law (1958) provides that an employer shall

pay employee salaries by no later than the ninth day of the calendar month following the

month in which wages were earned.

Annual Vacation:

The Annual Vacation Law (1951) provides a minimum annual leave for

employees ranging from 15 to 28 days, based on seniority. The law provides that up to

a maximum of two years of unused vacation days are redeemable upon termination of

employment.

Sick Leave:

The Sick Leave Payment Law (1976) provides that employees are entitled

to sick leave payment such that one and a half days of sick leave are earned for each

month of employment, up to a maximum of 90 days. The employee is not entitled to

compensation for the first day of sick leave, compensation is set at half pay for the

second and third days, and thereafter the employee is entitled to full pay. Unused

accumulated sick days may not be redeemed.

Convalescence Pay:

According to the General Extension Order Regarding Payment of

Convalescence, employees are entitled to convalescence payments (from five to ten

days per year) based on their seniority.

Israeli labor law is a breathing entity, constantly evolving through new legislation

and labor court rulings.