Every worker in Israel is entitled to receive a base salary that is not lower than the minimum wage, and every employer must pay the minimum amount at the very least. The minimum wage level in Israel is calculated according to the employee’s age, scope of employment and other indices.
The purpose of the article is to explain what the minimum wage is, who is entitled to receive, how much money per hour or day and more.
What is a minimum wage?
Minimum wage (In Hebrew: Schar Minimum, שכר מינימום) is the lowest wage (salary) an employee is entitled to receive from his employer in the workplace. The right to a minimum wage for an employee is the duty of the employer, so that an employer may not pay a lower base salary than the minimum wage in Israel.
Minimum wages in Israel are calculated by month, by hour and by day, which means that the right to receive the wage that is not low is at the level of each of the calculations. In other words, it is mandatory that the salary is not lower than the monthly wage, or the daily wage or the hourly wager.
However, this does not mean that this is the salary the employer has to pay and of course it is wrong to think so. That is, the employer cannot pay less, but it is clear that he can certainly pay higher wages.
Regarding the level of wages, it should be noted that there are salary components since they can be included within the minimum wage and there are salary components that must not be included in the salary and in this case the employer is required to pay the same components as an additional payment.
An employee who works part-time or is absent on some days is entitled to receive the relative salary. As well, an employee who is a teenager (child, young person) is entitled to receive a minimum wage based on his age. Finally, a disabled worker is eligible to receive an adjusted minimum wage for him based on his earning capacity.
The Minimum Wage Law instructions require every employer to pay wages, even if they are a manpower contractor (Koah Adam) and even if the employer is the state of Israel itself. In addition, the obligation may be imposed on both the actual employer and the service provider. It should also be noted that the non-payment of wages constitutes a criminal and administrative offense and the verdict is fines and even imprisonment.
Target population – Who is eligible to receive a minimum wage?
The employee’s right to receive at least the minimum wage is enshrined in the Israeli minimum wage law. In fact, the right to pay is for those who meet the following conditions:
- Employee Age – An employee over 18 years of age.
- Scope of employment – An employee who is employed full time, as is customary in his workplace.
In addition, eligibility in these cases:
- Part-time employee – eligible to receive a minimum wage calculated by his / her part-time position.
- Employee who was absent from work – is entitled to a minimum wage at a proportionate rate of his or her absence. Unless he is entitled to payment for his absence under any law.
- Youth worker / minor – entitled to a reduced minimum wage adjusted for youth according to their age.
- Employee with a disability – entitled to a minimum wage adjusted according to his / her work ability.
- Employee receiving wages by commissions or bonuses less than the minimum wage – is eligible to receive the minimum wage supplement at a minimum.
Minimum wage level
The minimum wage amount for an updated salaried employee as of today is:
- Monthly minimum wage – NIS 5,300 per month.
- Hourly minimum wage – NIS 29.12 per hour (according to the calculation of 182 working hours per month).
- Daily minimum wage – one of the following:
- An employee who is employed for a 6-day work week – NIS 244.62 per day (1/25 of the minimum wage per month).
- An employee who is employed for a 5-day work week – NIS 212.00 per day (1/21 and 1/3 of the minimum wage per month).
The latest monthly minimum wage update date was December 2017, and the hourly salary update date was April 2018 along with a 42-hour work week cut (instead of 43) and a base calculation of 182 work-hours per month (instead of 186).
It is important to note that the minimum wage (monthly, hourly and daily) is calculated up to 42 hours of work per week, because every hour beyond is an additional hour of paid overtime.
Note: The basic amount by law is NIS 4,816.02 as of 01.04.2018, which the employee would have been entitled to without the time order, as updated every April 1st.
Minimum wage additions
The minimum wage as previously written is the wage that the employer is required to pay at least to an employee, for a regular work day as is customary in the workplace.
The salary components that are included in the minimum wage calculation are:
- Basic wage or combined wage.
- Cost of living increment (if not included in the combined wages) – Tosefet Yoker in Hebrew.
- A permanent supplement paid to the employee for his work.
- Other wage components determined under a labor contract, collective agreement or collective or personal arrangement that they will not include in the minimum wage calculation (as of 1.4.2015).
The salary components that are not included in the minimum wage calculation are:
- Family increment.
- Seniority increment.
- Remuneration for shift work.
- Premium – measured, agreed upon, fixed or group.
- Thirteenth salary.
- Overtime hours.
- Grant on an annual basis.
- Reimbursement of expenses (economy, food sleep accommodation, travel allowance).
If the employee is entitled to non included salary components, he will be entitled to them in addition to the minimum wage payment.
Deductions from the minimum wage
The minimum wage is calculated as gross wages and before any deductions under other laws and regulations.
That is, from the minimum wage the employer has to deduct payment of income tax, social security contributions, health tax, compulsory pension contributions and other expenses.
Minimum wage for youth
The provisions of the law also protect the rights of an employee who is a minor or teenager or apprentice, so that he is also entitled to a minimum wage. However, a teenager is entitled to a reduced minimum wage based on his or her age calculated from the regular minimum wage. Also in youth, a regular job is 173 hours a month or 40 hours a week.
For more information, read the article on minimum wage for youth.
Minimum wage for a disabled employee
An employee who is a disabled person is entitled to all the rights as a non-disabled employee is entitled, including the right to a minimum wage. Such an employee has a reduced and low work capacity and therefore entitled to a partial salary payment.
The salary of such an employee is calculated from the normal minimum wage, in accordance with the ratio of the employee’s output to less work due to the disability, and the output of an unrestricted employee performing the same tasks.
For more information, read the article on Adjusted Minimum Wages.
Minimum wage notice
The law requires every employer to present in the conspicuous place in the workplace a minimum wage notice that sets out the main rights under the law. In some cases, the employer is also required to physically provide such notice to each employee.
Minimum wage level in Israel – past data
Below is the history of updating or raising minimum wages in Israel in recent times.
|Period||Monthly minimum wage||Hourly minimum wage (based on 42 weekly hours / 182 monthly hours)||Hourly minimum wage (based on 43 weekly hours / 186 monthly hours)||Daily wage by 5 working days (1 divided by 21 and two-thirds by the minimum wage)||Daily wage by 6 working days (1 divided by 25 by the minimum wage)|
|April 2018 onwards||5,300 NIS||29.12 NIS||–||244.62 NIS||212 NIS|
|December 2017 – March 2018||5,300 NIS||–||28.49 NIS||244.62 NIS||212 NIS|
|January 2017 – November 2017||5,000 NIS||–||26.88 NIS||230.77 NIS||200 NIS|
|July 2016 – December 2016||4,825 NIS||–||25.94 NIS||222.69 NIS||193 NIS|
|April 2015 – May 2016||4,650 NIS||–||25.00 NIS||214.62 NIS||186 NIS|
|October 2012 – March 2015||4,300 NIS||–||23.12 NIS||198.46 NIS||172 NIS|
Exercise of entitlement – How to get the right to a minimum wage?
The right to receive wages that are not lower than the minimum wage should automatically be reached by the employer. The law requires every employer, including a workforce contractor, an actual employer and even offers a service by which the employee is entitled to this minimum wage. Of course, it does not matter if the employer is an exempt dealer, licensed dealer or company ltd.
An employee, whose employer does not pay a minimum wage, can do one of the following ways:
- To file a complaint, to the Registry and Enforcement Administration, in the Ministry of Labor, Welfare and Social Services.
- To sue the employer in the Labor Court and even compensation for remuneration (minimum wage remuneration).
Of course, the employee can also sue the actual employer or service provider, for example if he is employed by a manpower contractor.
For such a violation, a penalty of one year’s imprisonment or a fine of up to NIS 226,000 can be imposed.
- In no case should the minimum wage be reduced.
- Minimum wages may change from time to time according to additions and updates.
- An employee who is entitled to favorable conditions under a collective agreement, an extension order or a personal employment contract – will be entitled to them if their conditions are superior to the provisions of the law.
- Employees who earn a minimum wage calculated at 186 hours or NIS 28.49 per hour should contact the employer to address the deficiencies.
- An employee is entitled to receive holiday pay, convalescence allowance, sick pay, vacation pay and other payments in addition to the minimum wage.
- An employer may not injure the wages, promotion of work or conditions of employment, nor may he dismiss an employee because of a complaint or claim he filed, or because he helped another employee submit.
- Average wage in the economy – how the average wages are calculated today