Understanding Recuperation Pay in Israel: A Guide for Employers

Introduction

Recuperation (sometimes referred to as Convalescence) pay, commonly known as “Dmei Havra’ah” in Hebrew, is a mandatory benefit for employees in Israel. It offers an opportunity for employees to unplug and rejuvenate, helping boost their overall productivity and job satisfaction. Recreation fees are an additional compensation given to employees beyond other salary components. The origin of this benefit goes back to a time when industries were primarily dependent on physical labour. Historically, these fees enabled workers to take restorative breaks during summer, to return to work rejuvenated.

In 1998, the entitlement for recreation fees was formalised as part of the general collective agreement regarding employer contributions towards recreation and vacation expenses. This was later extended to all employers and employees, except for special cases in the public sector and specific workplaces.

Per the expanded regulations, employees who complete a year at a workplace are entitled to receive recreation fees. If the employee has not completed a year at the time of payout, they will receive it during the subsequent year, also accounting for the prior year’s work.

Eligibility Criteria

Employees who have completed at least one year (12 months) at their workplace are entitled to recuperation pay. Their tenure at the company determines the amount. Till now (March 2024) in the private sector, the base rate stands at ₪ 418 per day, while for the public sector, it was ₪ 471 per day.

Non-Negotiable Rights

It’s important to note that employees cannot waive their right to recuperation pay, either in full or in part. Additionally, certain contractors and employees in specific industries may receive more favourable conditions than the general employee base.

Retroactive Payment

After completing a year at the workplace, the employee is eligible for retroactive recuperation pay, starting from their first day of employment.

Calculations and Adjustments

The payment of recuperation fees (’employer’s participation in recuperation and vacation expenses’) is not conditional on the employee actually staying on vacation or at a recuperation facility. The recuperation fees are calculated according to the employee’s tenure at the workplace, in line with the scope of their role and the duration of their employment that year. The amount of recuperation fees per day in the private sector usually updates in July, in accordance with the rise in the general consumer price index, within the framework of an extension order. The amount of recuperation fees in the public sector usually updates in June, according to the announcement from the wage commissioner.

How Many Recuperation Days Are Granted?

Here’s a breakdown by tenure:

– First Year: 5 days (₪418 x 5)

– Second & Third Year: 6 days (₪418 x 6)

– Fourth to Tenth Year: 7 days (₪418 x 7)

– Eleventh to Fifteenth Year: 8 days (₪418 x 8)

– Sixteenth to Nineteenth Year: 9 days (₪418 x 9)

– Twentieth Year and beyond: 10 days (₪418 x 10)

Calculation of Partial Recuperation Fees

Recuperation fees are calculated relatively according to the fraction of the role and relatively to the period of partial employment during the year. Example: An employee who started working at a new workplace and worked for a year and a half at 50%— For the first year, he will receive recuperation fees for two and a half days (5 days x 50% role). For the second half of the year, he will receive recuperation fees for a day and a half (6 days x 50% role x 1/2 year).

Conclusion

Understanding and implementing recuperation pay goes beyond mere legal obligations; it’s a critical component of prioritising your team’s well-being and fostering a positive workplace culture. Stay updated with announcements from the Ministry of Labour to ensure you’re always in compliance and supporting your team effectively.