11% of Israeli workers earn less than minimum wage

payslip  picture: Tamar Matzapi

The minimum wage in Israel has risen steeply, from NIS 4,300 in 2015 to NIS 5,300 today.

429,550 workers - 11% of the workforce in Israel - do not receive the legally mandated minimum wage. This emerges from a report by workers' rights organization Kav LaOved based upon a survey of data for the years 2016-2019 from the Regulation and Enforcement Administration, and on data from the National Insurance Institute and the Central Bureau of Statistics.

Despite the widespread violations of the Minimum Wage Law by employers, warnings and sanctions for breaches of the law were issued to only 0.09% of employers in 2018 and 0.05% in 2019.

The minimum wage in Israel is NIS 5,300. A series of agreements between the Histadrut (General Federation of Labor in Israel) and the employers' organizations raised it from NIS 4,300 in 2015 to the present level. The rise in violations of the Minimum Wage Law may be partly attributable to the steep rise in the minimum wage.

The Regulation and Enforcement Administration is responsible for enforcing labor laws in Israel. It is currently part of the Ministry of Labor and Welfare. Under the coalition agreement for the formation of a new government, it will be transferred back to the Ministry of Economy. The Administration has both administrative and criminal powers. It can issue an administrative warning or impose a financial sanction of between NIS 5,120 and NIS 35,800, and it can also institute criminal proceedings. Its budget has steadily fallen, and in 2019 it had a budget of just NIS 12.2 million, 37% less than in 2016.

The rate of non-compliance with the minimum wage has risen from 9.5% in 2012 to 11% currently. The groups that suffer particularly from failure to pay the minimum wage are very young and very old people, women more than men, people with a low level of education, Arabs, haredim (ultra-Orthodox Jew), and unskilled workers.

Published by Globes, Israel business news - en.globes.co.il - on May 3, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

payslip  picture: Tamar Matzapi
payslip picture: Tamar Matzapi
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018