Israel's Defense Ministry Replaces Outdated Bonus System with New Salary Model

A new collective labor agreement has been signed at Israel's Ministry of Defense, replacing an outdated bonus system that had been in place for decades with a new model that includes fixed salary increases, performance incentives, and other benefits. The agreement, effective until August 31, 2030, was negotiated between the Histadrut labor union, the Ministry of Finance, the Ministry of Defense, and employee representatives.

The new model replaces the "encouragement pay" or "premiums" system with fixed salary additions that contribute to social benefits and pensions. It also introduces excellence awards, performance bonuses for students, and a monthly incentive for perfect attendance. This change aims to align the salary structure with the current work environment at the Ministry of Defense, addressing issues previously highlighted by the State Comptroller.

Under the new agreement, administrative, research, engineering, and technical staff will receive a 14.3% salary increase. Social workers will see a raise between 10.73% and 15%. Annually, 25% of eligible employees will receive thousands of shekels in excellence awards. Senior employees at grade 42 and above will receive a fixed monetary increase, and students employed by the ministry will be eligible for thousands of shekels in performance-based bonuses.

Officials from the Ministry of Finance, the Histadrut, and the Ministry of Defense expressed satisfaction with the agreement. They emphasized that the new model provides greater stability, fairness, and pension security for employees, while also linking compensation to contribution and performance. The agreement is seen as a significant step in enhancing human capital within the Ministry of Defense.