June to September months are good times for most of the employees in Israel, because, during this period, a convalescence pay (Dmey Avraa) of thousands of shekels is paid. Eligible employees receive the payment in accordance with the provisions of the order.
The purpose of this article is to explain the concepts of who is entitled to receive, the calculation of the amounts, the date, and method of payment and other important information.
What is convalescence pay?
Convalescence payments (Convalescence pay) (in Hebrew: Dmey Avraa, דמי הבראה) are funds that employers must pay to employees in order to participate in vacation and recovery expenses. This is an additional pay component to other pay components that employees are entitled to receive from the employer or the workplace.
Originally, a convalescence pay (also known as recovery allowance) is money paid to employees for financing their stay in a recovery home or guest house so that they can return with new forces to work. As previously recall, the industry was more about manual labor and physical labor. In addition, employees previously had to present receipts as a condition for receiving these funds.
Today, the convalescence payment (Dmey Avraa) is cut off from the source, at least partially. Indeed, the pay is still paid to employees as a recreation and vacation, but employees do not have to go on vacation and rest and do not have to present receipts for the expenses.
In fact, a convalescence pay is intended to be used by the worker during the summer period (usually) as a means of financing vacation and rest expenses, to return with new forces to the workplace.
Convalescence pay is usually paid as one amount, but there are cases where they are paid each month according to the monthly ratio and with the employee’s consent.
It is also important to note that these funds are considered as work income and are therefore charged with income tax, national insurance contributions, and health insurance contributions. However, convalescence pay is not considered money for the purpose of calculating salary for pensions.
Target population – who is eligible to receive a convalescence pay?
An employee is entitled to a convalescence pay (Dmey Avraa) if he meets the following eligibility conditions:
- Seniority at work – The employee works for at least one year with the employer.
- Types of employees – All the general public, but with the exception of these employees (who are entitled to another right):
- Employees who have physical or mental limitations employed in factories are protected by the Minimum Wage Law.
- Employees whose wages are paid according to the provisions of the collective agreements applicable in the public sector.
- Employees whose wages are paid by linkage to public service wage agreements.
In addition, a general expansion order does not apply to employees and employers, for whom priority provisions apply regarding the payment of a convalescence pay or other participation or under a provident fund (recovery industry) under a collective agreement.
An employee who resigns or is fired from his / her job is eligible to receive a convalescence pay if his employment actually ended after the end of one working year (even if the prior notice of dismissal or resignation happened before the end of one working year).
However, if the employer decides to terminate an employee’s immediate employment and pay wages for the advance notice, then the termination of employment is considered immediate, and therefore if the employee has not completed one year of work, he or she will not be eligible for a convalescence pay.
Date of receipt of convalescence pay
When do you get a convalescence fee (Dmey Avraa)? The convalescence pay is paid by the employer on a single pay mainly during the summer months of the year, ie from June to September each year. However, the employee may receive in another month if otherwise agreed or by the usual date in the workplace.
The convalescence pay is given in the same manner and at the same time as the wages of the months mentioned above are paid and the convalescence pay clause will appear in the payslip (payroll) in the designated month.
At the same time, an employee and the employer can stipulate in the employment agreement that the convalescence pay will be paid each month according to their ratio in that year, so that the annual pay is paid each month according to its partiality. Of course, all of this is provided that a special clause appears in the payslip regarding this.
Number of convalescence days
How many days of convalescence does an employee receive? The number of recovery days that entitled to the employee depends on the seniority there is in the workplace. The greater the seniority, the greater the number of recovery days.
The following table shows the calculation of convalescence days for employees in the private and business sectors in Israel.
|Years of seniority of the employee in the workplace||Number of convalescence days|
|First-year (up to one year)||5|
|Second and third years (two to three years)||6|
|4th year to 10th year||7|
|11th year to 15th year||8|
|15th year to 19th year||9|
|20th year onwards||10|
In the case of public sector employees or employees to whom an expansion order or a (better) collective bargaining agreement is entitled, the number of days is bigger. You can read the “Additional extensions” section of this article at the end.
An employee has worked for an employer for 3 years, how many days of recovery is he entitled to?
If the employee has already completed 3 years, then this is his number four working year at the employer and therefore will be entitled to 7 days of recovery.
Here are other cases that are important to emphasize:
1. Convalescence days for a part-time employee
A part-time employee is entitled to a convalescence pay according to the part-time (scope of position). In addition, an employee who worked part of the year is entitled to a recovery allowance according to the part of the working period in that year.
For example An employee who is employed 50% of the job is entitled to a 50% payday convalescence according to this table, so that he/she is entitled to receive 2.5 days for one (first) working year.
2. Convalescence days for an employee who did not complete a work year during the pay month
An employee who did not complete a work year in the month in which a convalescence pay is paid will be entitled to receive the convalescence allowance in the following period and on condition that he completes one working year. On the date of payment of the Convalescence pay, the calculation will also be made for the previous period.
For example Employee began work on April 1, 2019, when the allowance is paid for each month of June. Because at the end of June 2019 he worked for 3 months, he will receive together with the salary of June 2020 in such a way: 5 days of convalescence for the first year and 1.5 days for the rest of the year (6 days of convalescence * 25% – because this is 3 months out of 12).
3. Absence for the purpose of calculating the eligibility period
When calculating the number of convalescence days, it is important to note that there are absences that affect the eligibility period. these are:
- An absence that taken into account to calculate the eligibility period:
- Period of birth and parenting (maternity leave).
- An absence that not taken into account to calculate the eligibility period:
- Unpaid vacation (Chufsha lelo tashlum – “Chalat”).
- Other absences where no working relationship exists.
Employee (female) works for her 3rd year at the employer, who has been on 2 months of unpaid leave and 3 months of maternity leave. How many days of recovery are you entitled to receive?
An ordinary employee who is absent is entitled to receive 6 days for a full 12 months’ work. But that worker didn’t work for a full year and so in this example:
- Unpaid vacation for 2 months – not counted.
- Maternity leave 3 months – yes counted in the calculation.
In other words, the employee is entitled to 10 out of 12 months, with a 6-day recovery period. That is, she will be paid for 5 days and not 6.
Monetary value of convalescence day
The monetary value of convalescence day for private-sector employees may change from time to time by updating the expansion order on the issue. For the public sector, the amount varies according to an annual update and, among other things, according to changes in the consumer price index.
The following table shows the level of recovery fees in Israel this year and in previous years.
|Year||Private Sector||Public Sector|
|convalescence pay 2020||378 NIS||429 NIS|
|convalescence pay 2019||378 NIS||432 NIS|
|convalescence pay 2018||378 NIS||426 NIS|
|convalescence pay 2017||378 NIS||424 NIS|
|2016||378 NIS||421 NIS|
|2015||378 NIS||425 NIS|
|2014||378 NIS||427 NIS|
|2013||378 NIS||423 NIS|
The public sector convalescence pay (Dmey Avraa) is updated on June 01 every year.
However, there are other sectors such as guarding, security, cleaning, and more where there are more convalescence days or generally higher convalescence pay value, some additional extensions can be found on this page.
An hourly worker is entitled to receive a convalescence pay according to the employee’s weekly working hours divided by 42 in accordance with an extension order for shortening weekly working hours. For before April 2018 it was calculated according to 43 weekly hours.
This is the same according to monthly calculations when the number of monthly employee hours is calculated by division to 182 as of April 2018. For before April 2018, it was calculated by 186 monthly hours.
Calculate convalescence pay
Suppose an employee starts working on January 1, 2018, how much of a convalescence pay is he entitled to receive in 2020 if they are paid in June’s salary?
At the end of June of this year, the employee has seniority of two and a half years and is therefore entitled to 6 days of recovery. The cost per recovery day is NIS 378, so the recovery fee he is entitled to be NIS 2,268.
Financing of recreation instead of convalescence pay
An employer may finance the holiday in lieu of the payment of a convalescence pay (Dmei Avraa), provided that the employer has notified it in advance and on condition that the employee has agreed to it. In this case, if the vacation cost is lower than the amount of the convalescence pay that the employee receives, the employer must complete the difference.
Convalescence pay – pension and compensation
The compensation regulations prescribe the components of wages that are taken into account in the payroll in respect of compensation payment. Components include basic salary, seniority supplement, cost-of-living supplement, family supplement, departmental supplement, and professional supplement.
Convalescence payments are not included in any of these components and therefore the payment is not taken into account for calculating the compensation payment of the employee. The determinant salary for compulsory pensions is the same as the determinant for compensation payment and therefore, a convalescence pay is not taken into account.
Convalescence pay – taxes and insurance
Convalescence pay (Dmey Avraa) is work income in accordance with Israeli insurance and tax laws. This means that when receiving a convalescence pay in the workplace, the employee is required to pay income tax (according to income tax steps), national insurance contributions, and health insurance contributions (health tax).
A convalescence pay is a gross and not net amount, as there are a tax and insurance payment.
Public sector employees, recipients of budgetary pension allowances, Local Government Center workers, or employees employed in safeguarding, security, cleaning, halls and event gardens, or other employees to whom an expansion order or collective bargaining agreement is entitled are entitled to an increased payment or increased days.
- An employee cannot waive convalescence pay or part of them. If the employee is forced to give up or agrees to waive the amounts due to him regardless of the cause – this agreement does not have a binding legal effect.
- An employee who has not received a convalescence pay for previous years can claim the employer in retrospect for up to 7 years from the time the convalescence pay should have been received. The same is true for workers who have been fired or resigned.
- Non-payment of convalescence pay is a violation of the law.
- An employee who is on maternity leave in the month in which the employer pays a convalescence pay must receive the payment that month along with the other employees.
- Although the default is to use the amount of money for recreation, vacation, and leisure, the money can be utilized for equally important needs. You can utilize them for pensions and get a tax refund, deposit in attractive savings plans, and more.