Convalescence pay 

 

Many years ago, when people didn’t travel abroad every holiday for vacation, it was customary to go on vacation to convalescent homes. The State, as part of protecting employees’ rights, issued a regulation that obligated employers to participate in employees’ annual vacation expenses. This payment is known as Convalescence Pay.

Since most of us go on vacation during the summer, the convalescence pay was usually paid on August (though there are employers who add the payment at different times).

Times have changed and convalescent homes are no longer a favorite destination, so most of us enjoy convalescence pay as a nice addition to our pay.


Who is entitled to receive convalescent pay?

All salaried employees who completed a year in the workplace are entitled to receive convalescent pay. Periods of absence (such as maternity leave, reserve duty, sick days, etc.) are also considered in order to calculate seniority, which influences the amount paid.


How much do we get?

The convalescent pay is usually determined according to the company’s policy. However, the regulations state that the employee’s seniority directly affects the sum of convalescent pay, as detailed below:

As to 2018 –
for the first year of employment – five days.
For the second and third year – six days.
For the fourth and fifth year – seven days.
For the 11th – 15th year – eight days.
For the 16th – 19th year – nine days.
For the 20th year and onwards – ten days.

Employees working part-time, are entitled to convalescence pay according to the proportion of their position.

Hourly workers are also entitled to receive convalescence pay according to the proportion of their position (the average number of monthly hours per year divided by 182 multiplied by the sum of convalescent pay to which the employee is entitled).


And now, the million dollar question – how much is a convalescent day worth?
As of 2018, a convalescent day in the private sector is worth 378 NIS per day, and in the public sector it is worth a little more than 426 NIS per day.


And the payment?

Employers usually pay the convalescent pay in one payment (usually it is added to August pay), but there are additional alternatives for payment, one of which is dividing the annual convalescent pay to monthly payments throughout the year. Another alternative is funding a vacation, but such an option requires the employee’s approval and the cost of the vacation must be compared to the value of the convalescence pay, to make sure that the payment is at least the amount due to the employee as convalescence pay.

 

It should be noted that in cases where an employee is no longer working in the Company (at his or her initiative or that of the Company), the final salary must include the partial amount to which the employee is entitled. The amount is calculated from the last payment date until the last date of employment (the date in which the employer-employee relations were canceled).

So, see you at the convalescence home?

Written by: Assaf Vardimon, CFO and team leader at Brooks-Keret