Employee Rights to Overtime Compensation in Israel
Israeli law defines overtime as any work performed beyond the daily limit established by the Hours of Work and Rest Law. The purpose of the law is to protect employees’ health by limiting extended working hours.
If an employee starts work before the official start of the day or continues after the official end — and exceeds the daily limit — those hours are considered overtime and must be compensated accordingly.
Legal Basis and Case Law
The law limits the working day to eight hours in a six-day workweek or nine hours in a five-day workweek. Overtime is only allowed in exceptional cases under specific legal conditions:
- Unforeseen events requiring task completion
- Shift-based work
- High-demand periods (e.g., holidays, inventory checks)
- A general permit granted by the Minister of Labor under Section 11 of the law
In Supreme Court case Cr.A. 4784/12, the Court confirmed that overtime pay is an addition to the base salary, not part of it. The base salary must meet at least the minimum wage requirement.
How Is Overtime Calculated?
Overtime is calculated on a daily or weekly basis, not monthly (unless flexible hours are contractually agreed).
Calculation steps:
Total hours worked per day
Check against the daily/weekly legal threshold
Apply the following compensation rates:
-
- 125% of the hourly wage for the first 2 overtime hours per day
- 150% for each hour thereafter
- 175%–200% for rest day or holiday work
Work performed on Saturday night (Motzei Shabbat), beyond 42 weekly hours, may also qualify for overtime pay.
If a collective agreement or expansion order provides better terms — the more favorable terms apply.
No Waiver of Rights
Employees cannot waive their right to overtime compensation or accept payment below legal thresholds. Employers who fail to comply are in violation of the law and may face legal action. Complaints can be filed with the Labor Law Enforcement Unit.
Legal Guidance
Attorney Yaakov Shnitman, based in Jerusalem, is recognized as a leading expert in labor law, representing both employees and employers in labor courts across Israel, including the National Labor Court.
