Update on Minimum Wage and First Extension Order in the Catering Industry

We are pleased to present you with a brief update on the recent increase in the minimum wage, the publication of an extension order in the catering industry and the changes to legal provisions affecting engagements with service providers in the catering, security, and cleaning sectors.

If you have any questions about the topics covered in this update, please feel free to consult with us individually.

• Effective April 1, 2025, the minimum wage in the general economy will increase to NIS 6,248 for a full-time position. The increase will also impact the minimum wage costs for service providers in the security, catering, and cleaning sectors.

• A new Extension Order for the catering industry has come into effect, granting workers with rights that exceed the previous statutory working conditions. This change will also result in an increase in the minimum wage costs for catering workers.

• The amount of the gift given to cleaning industry workers for Passover and Rosh Hashanah has been updated to NIS 249.94.

A. Effective April 1, 2025: The Monthly Minimum Wage Will Be NIS 6,248

1. The Minimum Wage Law, 5747-1987 mandates that employees are entitled to a wage not less than the minimum wage set by law. The purpose of the law is to ensure a basic standard of living for all employees. This law is binding and not subject to conditions. The monthly minimum wage set by law also affects the daily and hourly minimum wage.

2. According to the automatic update mechanism in the Minimum Wage Law, which stipulates that the minimum wage will be 47.5% of the average wage in the economy, and following the Minister of Labour’s announcement in the Official Gazette, the monthly minimum wage for a full-time employee is expected to increase to NIS 6,248 (NIS 34.33 per hour) effective April 1, 2025. This is an increase from the current monthly minimum wage of NIS 5,880 which has been in effect since April 2024.

3. Therefore, as of April 1, 2025, the wages of employees earning the minimum wage must be updated. Additionally, in accordance with the Wage Protection Law, 5718-1958, it must be ensured that the updated minimum wage is reflected in the employees’ pay slips.

4. It is also recommended to assess the implications of the expected increase in the minimum wage on engagements with service providers, such as those in the cleaning and security sectors.

B. First Extension Order for the Catering Industry

5. On March 19, 2025, the first extension order for the catering industry was published in the Official Gazette and came into effect.

6. The order expands the provisions of the General Collective Agreement for the Catering Industry, signed on January 4, 2022, between the Tel Aviv and Central Districts Chamber of Commerce and the Histadrut New General Workers’ Union. It significantly updates the wages and employment conditions for workers in the catering industry.

7. The main provisions expanded within the new order include: the payment of the industry minimum wage (derived from the minimum wage in the general economy); deposits to the study fund; holiday gifts; work uniforms; and a perseverance grant.

8. Overall, the working conditions detailed in the new extension order exceed those that applied to the catering industry before it came into effect, thereby increasing the minimum wage cost for catering workers.

9. Consequently, the new extension order requires those utilizing services in the catering industry to make appropriate adjustments. These adjustments involve both amending existing agreements with catering contractors and implementing changes in preparation for new engagements.

C. Update to the Value of Holiday Gifts Given in the Cleaning Industry

10. In accordance with the mechanism set out in the Extension Order for the Cleaning Industry and considering the changes in the January 2025 Index, the amount of the holiday gift for service providers in the cleaning industry must be updated to NIS 249.94 for each holiday (Rosh Hashanah and Passover). This change increases the minimum wage cost for cleaning workers, requiring adjustments from those who utilize services in the cleaning sector.

We are happy to assist you with any questions regarding these matters and to help you implement the provisions of the extension order in the catering industry for existing or future engagements, as well as the changes to the minimum wage and holiday gift rules.

As always, we will continue to keep you updated on developments in the field of labour law.

As we approach the Passover holiday, we extend our warmest wishes to you and your families. May this season bring you joy, cherished moments together, and peaceful, restful days ahead.

Labour Law Department

Herzog Fox Neeman