Histadrut secures groundbreaking wage increases in hospitality and construction

In a landmark moment for Israel’s labor market, two newly signed sector-wide extension orders will significantly improve wages, benefits, and working conditions for hundreds of thousands of workers in the hospitality and construction industries.

The agreements, brokered by the Histadrut and signed by Labour Minister Yoav Ben Tzur, extend collective bargaining agreements to all workers in these sectors. These deals arrive at a critical time, as Israel grapples with a post-war labor shortage and rising living costs.

A New Standard for Hospitality Workers

The first agreement will enhance pay and job security for thousands of hospitality and catering employees, from chefs and kitchen assistants to waitstaff and dishwashers.

Key Benefits for Hospitality Workers:

Higher Minimum Wages:
From April 2025, the industry wage floor will rise 10% above Israel’s national minimum wage, with phased increases reaching 16% above the minimum wage by 2028.
Employer Contributions to Training Funds:
By 2028, workers will be entitled to employer-funded professional development contributions, reaching 5% of base salaries.
Retention Bonuses & Performance Incentives:
Employees will receive annual loyalty bonuses, which can be converted into merit-based awards or skills training grants.
Holiday Allowances:
Workers will receive Rosh Hashanah and Passover gift vouchers, reaching 230 NIS ($63) per year.

Histadrut Chairman Arnon Bar-David hailed the agreement as a “game-changing victory for hospitality workers,” stating: “For too long, these essential workers have been underpaid and overworked. This agreement ensures that they receive fair wages and the professional recognition they deserve.”

Construction Sector Overhaul: Better Pay, Safer Conditions

The second agreement restructures the construction industry, addressing wage stagnation, job safety, and labour shortages in a sector still reeling from the departure of 80,000 Palestinian workers after the October war.

Major Reforms in the Construction Industry:

Significant Pay Increases:
Base salaries will rise to 6,300 NIS ($1,750) by December 2025.
Senior-level roles will increase to 8,000 NIS ($2,220)—a 22% pay rise.

Streamlined Wage Progression:
The number of pay grades will be reduced from eight to four, allowing faster promotions and clearer career paths.

Higher Salaries for Site Managers:
Starting wages for construction site managers will be 10,000 NIS ($2,780), rising to 16,000 NIS ($4,450) within five years.

Mandatory Safety Training for Career Advancement:
Workers will be required to complete certified safety training to qualify for promotions.

Expanded Employee Benefits:
Employers will provide meal subsidies, holiday bonuses, and upgraded workwear allowances.

The agreement aims to attract more Israeli workers to the construction sector, addressing the ongoing labour shortage while prioritizing safety and skills development.

Labour Minister Yoav Ben Tzur described the agreement as “a strategic move to strengthen Israel’s workforce and safeguard economic growth.”

Histadrut’s expanding influence in Israeli labor policy

These agreements signal the Histadrut’s growing influence in shaping Israel’s labor policy. By leveraging government support and employer cooperation, the trade union has secured substantial pay increases and job security measures that could serve as a model for future agreements across other industries.

Histadrut Chairman Arnon Bar-David framed the deals as “a defining moment for Israeli labor rights,” adding: “Our goal is clear: to raise employment standards across the entire Israeli workforce. These agreements prove that fair wages, job security, and professional development are not only possible but necessary for a stable economy.”

A New Labour Market Paradigm?

As these agreements take effect, pressure is mounting on other sectors to follow suit. With Israel’s economy adapting to post-war realities and global labor market shifts, the question remains: Will more industries embrace similar collective agreements to retain talent and enhance working conditions? For now, the Histadrut’s success in hospitality and construction and last week’s historic agreement for reform in public sector psychology salaries are signaling the way forward for the future of labor in Israel.