The leave without pay plan recently approved by the Knesset states that in the private sector only workers who have been absent from work for at least ten days will be entitled to partial compensation from the state. This is by contrast with the public sector, where the state has spread a more comprehensive and more generous safety net.

The employer organizations are furious, and say that thousands of workers who receive their wages towards the end of this week will discover that their pay has been cut sharply because of their absence from work in the first week of the war. The employer organizations estimate that at least 250,000 workers will be affected.

The day after the legislation was completed, Prime Minister Benjamin Netanyahu signaled to the employer organizations that he would enter the picture. They said that Netanyahu expressed surprise at the gaps between the sectors and promised to intervene. So far, however, the problem remains as it was, with no breakthrough or understandings on the amount of compensation that will be transferred to business owners and employees.

Late last week meetings took place between Histadrut (General Federation of Labor in Israel) chairperson Arnon Bar-David and Dubi Amitai, president of the Presidium of the Business Sector, Shachar Turjeman, president of the Federation of Israeli Chambers of Commerce, and Fox Group CEO and controlling shareholder Harel Wiesel. The sides tried to formulate a plan that would reduce the gap between the sectors, following sharp criticism from the employers, claiming that the agreements signed did not contain an adequate solution for private sector workers.

Bar-David proposed allocating NIS 150 million from the "budget box" - a mechanism born during the Covid pandemic in the public sector wage agreement in force until 2027 - to finance the first few days in which private sector workers were left without compensation. The budget was originally intended to provide a solution in exceptional situations and for ad hoc needs, by agreement between the government and the Histadrut.

The employer organizations argue, however, that this will not be sufficient. They say that the Histadrut’s proposal also stems from considerations of its image, and an attempt by Bar-David not to appear as caring only about the public sector. "That harms the Histadrut," the organizations say, adding that they expect the Ministry of Finance to provide a further NIS 100 million to close the gap and compensate businesses that have been harmed.

In last year’s Operation Rising Lion against Iran, the cost of ten days absence without leave in the private sector was estimated at NIS 300 million. The sum now proposed by the Histadrut is intended to close only part of the gap, mainly the initial days for which the state is not prepared to bear the cost, but without the Ministry of Finance’s participation it is doubtful whether it will be possible to reach a general solution.

For the Finance Ministry, the matter is closed

Meanwhile, the Ministry of Finance is prepared to shorten the qualifying period for compensation for leave without pay to ten days from the fourteen originally proposed, but refuses to bear the cost of the first days, which are the main bone of contention. The result is that the gap between the sides remains as it was, and the negotiations are stuck.

Against this background, the pressure from the private sector is growing. The Federation of Israeli Chambers of Commerce warns that unless a solution is found within the next few days, it intends to distribute an open letter critical of the ministers and members of Knesset who supported the current plan. According to the sources, the letter will be published within four days, a move intended to create public and political pressure on the decision makers.

At any rate, even if the prime minister wants to intervene on the plan, he has very little room to act at this stage. The legislation has been passed, the Knesset is in recess, and the timetable is short. The workers are due to receive their wages in the coming days, under the existing plan. Any change involves reopening the decision, and legislation, or at least arranging a budget alternative, none of which can be done quickly under current conditions.

The next discussion, set for April 14, is also not expected at this stage to include operative steps. So even if the political will to intervene is there, it’s almost mission impossible to do anything practical by the end of the week.

Published by Globes, Israel business news - en.globes.co.il - on April 6, 2026.

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