We would like to update you that on August 18, 2026, an extension order regarding the employer’s participation in recuperation and vacation expenses was published pursuant to Section 25 of the Collective Agreements Law, 1957, extending the applicability of the provisions of the general collective agreement signed on June 22, 2026, between the Presidium of the Business Sector and the New General Federation of Labor. Under the order, the recuperation pay rate for the 2026 recuperation year was set at NIS 451.50 per day.
As a general rule, the extension order applies to all employees and employers in Israel, except for employees whose wages are paid pursuant to collective agreements applicable in the public sector, employees whose wages are paid based on linkage to public sector wage agreements, and employees in sheltered workshops as referred to in Section 17(a) of the Minimum Wage Law, 1987.
We would like to remind you that the Ministry of Labor previously published a position paper in light of questions that arose regarding the update of the recuperation pay rate, clarifying that the relevant consideration is the period in respect of which recuperation pay is paid, and not only the date on which the payment is actually made. Accordingly, where recuperation pay for the 2026 recuperation year was paid based on the previous rate, the Ministry of Labor’s position in that paper was that employees should be paid the difference resulting from the updated rate, in accordance with the number of recuperation days to which each employee is entitled and in accordance with the scope of his or her employment. It was further clarified that it makes no difference whether recuperation pay was paid in a single payment, in several installments, or as part of the regular salary.
Accordingly, employers are now required to examine whether the extension order applies to them; verify whether recuperation pay for 2026 has already been paid and at what rate; and, if payment was made at a rate lower than NIS 451.50 per day, calculate the required differences for each employee based on seniority, scope of employment, and the arrangement applicable at the workplace, and proceed to pay them.
We would be pleased to assist you with any questions or clarifications.
Sincerely,
Labor Law Department
