Finance Minister Avigdor Liberman (Yisrael Beytenu) on Wednesday afternoon announced that minimum wage will be raised from 5,300 NIS per month to 6,000 NIS per month.
Under a new agreement between the Finance Ministry, the Histadrut labor union, and lead employers, minimum wage will rise by 100 shekel in April 2022, after which it will rise in four additional stages until it reaches 6,000 NIS in December 2025.
In addition, an agreement has been reached to add one vacation day per year, so that the minimum number of mandatory vacation days, not including federal holidays, will be 13. It has also been agreed that the calculation of overtime hours will be made on a per-month, and not per-day, basis.
In addition, salaries in the public sector will be frozen for 1.5 years, and no new agreements will be signed until the beginning of 2023. Any agreements which are set to expire before then will remain in effect until early 2023.
Another change will affect how overtime hours are calculated for the entire economy: Instead of calculating overtime by how many hours an employee works per day, it will be calculated on a per-month basis so as to reduce costs to employers. Due to concerns that weaker employees will be harmed, the plan will only apply to employees who earn over 8,000 NIS ($2,551) bruto each month.
"Thirty-seven years have passed since an agreement to stabilize the economy was made, during the crisis of hyper-inflation," Liberman said at a press conference. "I suggest that you see what was written in the media following the previous agreement - today, we know how important it is. I'm not fooling myself - there are many challenges ahead: Next year, we will need to renew the collective agreements. Exporters are suffering from the fact that the dollar is low, and the Governor [of the Bank of Israel] will take care of that. The self-employed need unemployment and a safety net."=
Governor of the Bank of Israel Amir Yaron said, "The package creates certainty for the economy's activity, and it is gradual and proportional. Demonstrating the ability to cooperate for the sake of the economy will contribute to the advancement of additional processes in the coming years."
Histadrut Chairman Arnon Bar-David responded, "Raising minimum wage, without strikes when the dollar drops - that's a tremendous accomplishment."