Private and public-sector workers to get higher vacation allowance payments

Israel’s Histadrut labor federation and the private-sector employers’ umbrella group signed an agreement on Monday to raise the daily rate of vacation allowance, known as dmei havraah, for private-sector workers. The new rate will be 451.5 shekels per day, up from 418 shekels, an increase of about 33.5 shekels per day. Officials said the change could amount to several hundred shekels a year for each worker, and between 2 million and 3 million employees are expected to benefit.

The deal follows two years of frozen rates and a reduced vacation allowance day during the war in Gaza, known in Israel as the “Swords of Iron” war. For the agreement to apply across the economy, it must still be signed as an extension order by Labor Minister Yariv Levin, after the document was sent to the Ministry of Labor. The extension is needed, in part, because of consumer price inflation and the cost of living over the past two years.

In parallel, the public-sector vacation allowance rate was updated in line with the consumer price index to 511.6 shekels per day, compared with 471.4 shekels over the past three years. Histadrut chairman Arnon Bar-David said workers in Israel had carried the burden during the war and that it was time to give something back. He said the agreement would help workers “adjust the rate according to the rise in the index and the cost of living,” and would ease household expenses, even if only slightly.

Business sector president Dovi Amitai called the deal a correction of an injustice toward private-sector workers, saying they were “under the stretcher” throughout the war and kept the economy running in the hardest periods. He said the updated allowance reflects recognition of their contribution and thanked Bar-David for the cooperation. Vacation allowance is a legal entitlement for all workers, calculated by days and based on seniority and employment conditions. The agreement will take effect after the minister signs the extension order.