Minimum salaries increase

IMPACT – MEDIUM

What is the change? Israel raised its 2018 minimum gross monthly salary from 5,000 Israeli new shekels (about US$1,450) to 5,300 shekels, effective Jan. 1.

What does the change mean? The increase directly affects the salaries of foreign employees on SEA/STEP visas who must be paid the minimum gross monthly salary. Foreign employees working on a B-1 work permit must be paid twice the average salary (to be announced later this month).

• Implementation time frame: 2018.
• Visas/permits affected: SEA/STEP visas.
• Who is affected: Israeli employers.
• Business impact: Employers should budget for the 6-percent increase in the salary minimum.

Background: In addition to the increase in the minimum gross monthly salary, the government announced it will not change the minimum mandatory pension payments of 6 percent for employees. The employer contribution will remain at 6.5 percent. The government also announced that processing fees for 2018 will be slightly higher than 2017. The new government fee for a B-1 work visa will be 9,675 shekels (not including fees paid to the Ministry of the Interior’s Work Permit Unit).

BAL Analysis: Companies should plan for the new salary minimums for SEA/STEP visas for 2018.

This alert has been provided by the BAL Global Practice group and our network provider located in Israel. For additional information, please contact your BAL attorney.

Copyright © 2017 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.