Israel's Defense Ministry Replaces Bonus System with Permanent Salary Increases

The Israeli Ministry of Defense, along with the Treasury, the Histadrut labor union, and employee representatives, has signed a new collective agreement set to last until August 2030. This landmark deal replaces the long-standing "incentive" or bonus system with permanent salary additions that are recognized for pension calculations. The agreement also introduces new incentives for non-absenteeism and excellence awards, while restructuring salaries to better reflect current job requirements within the ministry.

The new agreement specifically benefits administrative, research, engineering, and technical staff with a 14.3% permanent salary increase. Social workers will see raises between 10.73% and 15%. Annually, 25% of eligible employees will receive excellence awards amounting to thousands of shekels. Additionally, senior employees in grades 42-44 and above will receive a fixed monthly raise, and students employed by the ministry will be eligible for performance-based grants.

Ministry of Defense Director-General Maj. Gen. (res.) Amir Yifrah stated that the agreement is a crucial part of the ministry's strategy to empower its human capital, fostering change, innovation, and excellence. He emphasized the shift from a "fragile bonus system" to "solid, pension-protected salary components," aiming to create a more motivated and rewarded workforce.

Histadrut Chairman Arnon Bar-David hailed the agreement as historical justice, replacing outdated compensation methods with a stable, advanced, and fair model that secures employees' pension futures. He affirmed the Histadrut's commitment to supporting the workers with strong backing and economic security.

Efi Malkin, the Treasury's wage commissioner, noted that the agreement abolishes the incentive pay, addressing long-standing difficulties in its adaptation and updates, as previously highlighted by the State Comptroller. He welcomed the innovative solutions found to resolve longstanding disputes and praised the new structure, including the non-absenteeism incentive and excellence awards.