Client updates /  Labor Law

The Freeze and Reduction of Convalescence Pay Law was approved in 2025.  As in 2024, employers will be obligated to reduce the convalescence pay payable to their employees and to transfer the reduced sums to the tax assessor, accordingly. The purpose of this law is to redirect these sums for the provision of benefits to reservists.

The account-settling must include wage components based on seniority, actual work (like overtime or rest-day work), and qualifying events.

A new extension order signed in March 2025 applies to employees in the construction, infrastructure, heavy equipment, public works, civil engineering and renovation sectors and came into effect on April 1.

The minimum wage in Israel is rising by 6.25% to ILS 6,247.67 per month as of April 1, 2025 (compared to ILS 5,880 last year). The update comes into effect on April 1, 2025.

Employers may require a medical exam only in cases of suspected sick leave misuse, such as working elsewhere or following a hearing summons.

A new extension order for the institutional catering sector took effect on April 1, 2025, applying the 2022 collective agreement to all employers and employees in the industry. The order improves conditions for one of the most underpaid and overworked groups in the labor market.

The payment of wages to private-sector employees in Israel who were absent from work due to the war will be regulated under a new collective bargaining agreement, subject to the issuance of an extension order governing its provisions. This arrangement will also apply to employees placed on unpaid leave due to the war.

Omicron is taking control of the labor market in Israel. Many employees are stuck at home in quarantine (or are ill). At the same time, there is still plenty of work. As a result, and in order to enable the Israeli economy to contend with the drastic drop in the number of available employees in the labor market, the government issued a new special permit on January 16, 2022, extending permitted overtime hours