Holiday pay: who is entitled, how much, and what to do when it is not paid

Service page: Payslip review by a lawyer and CPA.

There is no “holiday pay law”: the right is set in an extension order

Many people search for a “holiday pay law”, but no such law exists. Employees paid by the hour or by the day have a right to payment for holidays. It was set in a general collective agreement between the Coordinating Bureau of Economic Organizations and the Histadrut (General Federation of Labor). An extension order under the Collective Agreements Law, 5717-1957 (חוק הסכמים קיבוציים, התשי״ז-1957) applied it to the whole economy. This is the Extension Order for the Framework Agreement (Work Week, Holidays, Mourning) (צו ההרחבה להסכם המסגרת (שבוע העבודה, חגים, אבל)). It came into force on 1 July 2000. Section 7 of the order is the source of the right, and this is its wording:

Alongside the order, section 18A of the Law and Administration Ordinance, 5708-1948 (פקודת סדרי השלטון והמשפט, תש״ח-1948) defines the holidays themselves as days of rest. The Hours of Work and Rest Law, 5711-1951 (חוק שעות עבודה ומנוחה, תשי״א-1951) sets what is paid to someone who works on them anyway. In some sectors (guarding and security, cleaning, manpower companies and others), sector-specific extension orders apply that may be more favorable to the employee. Check which order applies to you.

Who is entitled to holiday pay: the three conditions

• A wage that is not monthly. The right belongs to an employee paid by the hour, by the day or by output. A monthly-salaried employee is not entitled to a separate payment. Their salary is paid in full even in a month with holidays (section 7(b) of the order).
• Three months of work at the workplace. Not a year, as many people think. The scope of the position is not a condition. An employee in a part-time position is also entitled, provided that the holiday falls on a day on which they were supposed to work.
• Attendance close to the holiday. The employee was not absent on the day before the holiday and the day after it, except with the employer’s consent. Absence with consent includes an approved vacation day and the weekly rest day. It also includes a day that is not one of your regular working days, or a “bridge day” that the employer itself declared.

There are two exceptions. Under the wording of the order, a holiday that falls on the Sabbath does not give a right to payment. And a holiday that falls on a Friday does not give a right to someone who does not work on Fridays anyway. Someone for whom Friday is a regular working day is also entitled for a holiday that falls on it. The case law adds two points. An employee on rotating shifts (24/7) is also entitled to holiday pay when their monthly quota of hours was not reduced because of the holiday. And an employee whose regular work schedule includes work on the Sabbath is entitled to holiday pay even for a holiday that falls on the Sabbath. Other rights that build up already in the first months are set out in the article on employee rights in the first year.

Which nine holidays are included?

Section 7 lists nine days. They are two days of Rosh Hashanah, Yom Kippur, and two days of Sukkot (the first day and Simchat Torah). Then two days of Passover (the first day and the seventh day of Passover), Shavuot and Independence Day. The intermediate days of the festivals (Chol HaMoed), holiday eves, Purim, Hanukkah, Memorial Day and Tisha B’Av are not on the list. Payment for them depends on a collective agreement, a sector-specific order, the contract or the custom at the workplace.

Under section 18A of the Law and Administration Ordinance, an employee who is not Jewish may choose between the holidays of their religion and the Jewish holidays. The employer may not interfere in the choice. Some employees choose the holidays of their religion, while the workplace is closed on the Jewish holidays. They do not receive double payment: the days of closure are arranged as vacation or by agreement.

How much is paid: the formula and a numerical example

Holiday pay equals the wage the employee would have received had they worked that day as usual, without travel expenses. For an employee with fixed hours, the calculation is simple: the hours of the working day × the hourly rate. For an employee with variable hours, an average number of daily hours is calculated over a period before the holiday. In practice, an average of the last three months is common, and some employers calculate over twelve months. There is no binding ruling on this, so it is worth setting the method in the employment agreement. In some workplaces, the method was not set and the gap builds up over years. There, legal support in the employer-employee relationship saves litigating over each holiday separately.

Example: an hourly employee at a rate of NIS 40 an hour, eight hours a day, five days a week, with one year’s seniority. On a holiday that falls on a Tuesday she does not work, and receives 8 × 40 = NIS 320 in holiday pay. In a year in which all nine holidays fall on working days: up to 9 × 320 = NIS 2,880. A holiday that falls on the Sabbath drops out of the calculation. Income tax and National Insurance (Bituach Leumi) are deducted from holiday pay as usual, and the employer must also make pension insurance contributions on it.

Worked on a holiday? 150%, plus holiday pay

The holidays are days of rest. Section 18A(b) of the Law and Administration Ordinance applies to them the weekly rest provisions of the Hours of Work and Rest Law. So section 17 of that Law requires payment of at least 150% of the regular wage for working hours on a holiday. It also requires an alternative day of rest. The question that occupied the courts for years is whether an hourly employee who worked on a holiday also receives holiday pay. Under the case law, some employees worked on a holiday out of necessity, that is, the employer scheduled them. They are entitled to holiday pay in addition to the 150% wage, 250% in total. The scheduling may have taken the employees’ requests into account. As long as the employer approves the actual work schedule, this is necessity and not a voluntary choice. The employer bears the burden of proving that the employee chose to work on the holiday voluntarily. The article on overtime explains the calculation of pay for work during the weekly rest and for overtime. The article on shift work explains the rules on shift work.

A monthly employee who worked on a holiday is entitled to an extra 50% for the working hours. Their salary already includes the 100%. They are also entitled to a paid alternative day of rest. Overtime pay and pay for work during the weekly rest, day by day: overtime calculator under section 16.

An “all-inclusive” wage, a waiver in the contract, and the end of employment

Holiday pay is “wages” under section 1 of the Wage Protection Law, 5718-1958, which expressly lists “payments for holidays”. So it cannot be waived. An employee may have signed a contract in which they agreed to waive holiday pay. Or they may have been told that the hourly rate “includes everything”. They remain entitled to it. An employer that claims the holiday pay was paid will have to show it on the payslip, as a separate, identifiable component. If the component does not appear in the holiday months, it will be hard for the employer to prove that it paid. This is what payslip review by a lawyer and CPA looks like.

When the employment ends, there is no “redemption of holiday pay” and no proportional annual calculation. The right is to each holiday that fell during the period of work after the first three months and was not paid for. You can claim it even after you have left. This is different from payment for unused leave (vacation redemption), where the law sets a redemption mechanism at the end of the employment.

Frequently asked questions

I work part-time, three days a week: am I entitled to holiday pay?

Yes, if you have completed three months of work and you are paid by the hour or by the day. The scope of the position is not a condition of entitlement. The condition is that the holiday falls on a day on which you were supposed to work under your regular schedule. A holiday that falls on a day on which you do not work anyway does not give a right to payment. Sometimes the working days are fixed. Then a day before the holiday that is not one of your working days counts as an absence with the employer’s consent. It does not cancel the right.

I fell ill the day before a holiday: have I lost my holiday pay?

The extension order requires that you were not absent on the day before the holiday and the day after it “except with the employer’s consent”. Absence because of illness, with a medical certificate, is generally regarded as a justified absence that does not cancel the right. But there is no binding ruling of the National Labor Court on this. Keep the sick note and tell the employer in time. An employer that refuses to pay will have to prove that the absence was without its consent.

I’m a monthly employee and I worked on Yom Kippur: what am I entitled to?

The monthly salary already includes payment for the holidays, so a monthly employee has no separate holiday pay line on the payslip. For the working hours on the holiday, an extra 50% is due (150% in total) under section 17 of the Hours of Work and Rest Law. A paid alternative day of rest is also due, and it is not deducted from the annual leave quota.

For which holidays is work paid at 150%?

This applies to working hours on the Jewish holidays that are fixed days of rest under section 18A(a) of the Law and Administration Ordinance. These are the two days of Rosh Hashanah, Yom Kippur, and the first day of Sukkot and Shemini Atzeret. Then the first and seventh days of Passover, and Shavuot. Section 18A(b) applies the weekly rest provisions to them. So pay of at least 150% is due for them (section 17 of the Hours of Work and Rest Law). For someone who is not Jewish, the provisions apply to the Jewish holidays or to the holidays of their community, as they choose. Independence Day is a day of rest under the Independence Day Law, 5709-1949 (חוק יום העצמאות, תש״ט-1949). Separate provisions govern work on it (section 2(b) of that Law). Chol HaMoed, holiday eves, Purim and Hanukkah are not such days of rest. An extra payment for them depends on a collective agreement, a sector-specific extension order, the contract or custom.

Is holiday pay due in the first three months of work?

No. The right starts after three months of work at the workplace (section 7(a) of the Extension Order for the Framework Agreement). A holiday that falls before you have completed three months does not give a right to payment. A holiday that falls after that does, even if you are in a part-time position. The condition is that the holiday falls on a day on which you were supposed to work.

Can you claim holiday pay for previous years?

Yes. Holiday pay counts as wages, and a claim for it becomes time-barred under the Prescription Law, as a rule after seven years (section 5(1)). Compensation for late payment of wages on it becomes time-barred much sooner (section 17A of the Wage Protection Law). The deadline is one year from the day the wages became delayed, or 60 days from receiving the wages, whichever is earlier. The claim is filed in the Regional Labor Court.