Waiters Rights- Bailey Spitz
There are thousands of restaurants in Israel employing tens of thousands of waiters and waitresses across the country. The Minimum Wage Law of 1987 set the standards to ensure that all employees receive a minimum standard of compensation, which as of 2024 is 30.7 NIS per hour. According to precedent from cases like Adir Tzemed Ltd. v. The National Labor Court[1]. This standard applies to restaurant workers as well, regardless of the tips they may earn. Tips received directly by employees are considered additional income and cannot be regarded as fulfilling minimum wage obligations. However, tips collected and pooled before distribution can be considered part of income.
All restaurant staff should have an employment contract specifying a salary that complies with minimum wage. Only centrally collected tips that become part of the restaurant profit can be used to pay that salary and comply with the minimum wage laws. Additionally, tips are not considered part of the employer’s contribution to social benefits. They can only contribute to the employee's salary. The employer must still pay social security and other mandatory benefits of Bituach Leumi, social security, vacation time, sick days, overtime pay, travel allowance and more, all based on the employees’ wages and not from tips. These rights and benefits are instituted to protect employees rights, and the restaurant owners must comply with them. Moreover, tips are taxable income for employees and must be reported as such.
The minimum wage must be paid for each day worked, so if a waiter does not receive tips on a particular day, the employer is still responsible for compensating the minimum wage. Excess tips from another day cannot be used as salary for days when tips are below the minimum wage. Minimum wage is allotted every month so as long as monthly salary rates comply, this is considered following the law.
In conclusion, it’s important for both employers and employees in the restaurant industry to understand the regulations surrounding minimum wage and tip income. Ensuring compliance with these laws not only protects the rights of employees but also contributes to fair and ethical business practices within the industry.
[1] Adir Tzemed Ltd. v. The National Labor Court, HCJ 5164/11, Judgment of 17 February 2013 (Isr.).
