Labour law6 min read8/15/2026

“Everything Is Included in the Salary”: When Overtime Pay Can Be Claimed in Israel

A contractual clause stating that the salary covers all work does not, by itself, resolve the issue of overtime. The actual duties, a separately stated global allowance, working-time records, and the employer’s ability to rebut the schedule reconstructed by the employee are all important.

Numbers and facts

•125% of the wage — the first two overtime hours
•150% of the wage — subsequent overtime hours
•15 hours per week — threshold for shifting the burden of proof
•60 hours per month — alternative monthly threshold
•200 shekels globally — example of a separate allowance in a collective agreement

A Salary Does Not Automatically Override the Law

The Hours of Work and Rest Law, 5711–1951, provides for payment for overtime work, but it does not apply to certain categories, including employees in managerial positions, employees in positions requiring a special degree of personal trust, and employees whose working conditions do not permit supervision of their working hours. Therefore, defining a position as “manager” or working in an office does not yet provide a conclusive answer: the actual duties and the possibility of supervision are examined. The Knesset Research and Information Center noted that employers often rely specifically on the exceptions concerning managerial positions and a special degree of personal trust. If entry and exit times and duties are in fact monitored, a claim that monitoring is entirely impossible requires particularly careful examination.

The Difference Between a Global Allowance and the Phrase “Everything Is Included”

A global overtime allowance may exist as a separate salary component, but its name alone is insufficient. It must be determined whether it appears separately in the contract and payslip, which hours it is intended to cover, and whether it corresponds to the actual working time. One example is a special collective agreement from 2016: it separately set a global allowance of 200 shekels for the listed positions, while overtime pay was regulated in a separate clause, according to the law or on a global basis. This illustrates why not every allowance is considered payment for additional work. A collective agreement or personal contract may also grant an employee rights exceeding the statutory minimum.

How the Underpayment Is Calculated

A document from the Knesset Research and Information Center stated that the first two overtime hours are paid at 125% of the regular hourly wage and subsequent hours are paid at 150%. The calculation is tied to overtime work, not merely to whether the monthly salary appears high. The same document also noted the requirement to obtain the employer’s approval for overtime work; accordingly, a supervisor’s instructions, schedules, correspondence, and knowledge of late work are important. If the global payment is lower than the payment due for the overtime actually worked, the dispute generally concerns the difference, rather than automatically disregarding the entire amount paid.

What to Do if the Employer Did Not Maintain Working-Time Records

The employer must regularly document ordinary working hours, overtime hours, weekly rest, and the corresponding payments. The records must be kept by mechanical, digital, or electronic means; if kept by another method, the employee must sign them daily and the supervisor appointed for that purpose must approve them. In the absence of proper records, the employer must prove that the employee was not at its disposal during the disputed hours. In overtime claims, this special rule regarding the burden of proof applies up to 15 hours per week or 60 hours per month. The record can be reconstructed with the help of a diary, work correspondence, entry logs, file transmission times, shift schedules, travel, and a consistent day-by-day self-prepared table.

For What Period Can Money Be Claimed?

The official materials provided describe in detail the recording of hours and the allocation of the burden of proof, but they do not specify the period for which a particular employee may claim underpayment. Therefore, they cannot reliably establish a uniform period in years. The absence of working-time records also does not mean that money will automatically be awarded for the entire employment period: the claim period and the scope of hours that can be proven are separate issues. In practice, it is advisable to prepare a monthly chronology without delay, retain payslips, and separately verify the applicable limitation period and the possibility of special periods.

FAQ

Is a contractual clause stating that “overtime is included in the salary” legal?

This clause alone does not resolve the dispute. The applicability of the Hours of Work and Rest Law, the actual duties, whether the global payment is presented separately, and the number of actual hours are examined.

Can overtime pay be claimed without working-time records?

Yes. The absence of working-time records does not, by itself, prevent a claim. If the employer does not produce the required records, it bears the burden of rebutting the disputed hours, up to 15 overtime hours per week or 60 hours per month.

What evidence can replace working-time records?

Messages from a supervisor, email, a diary, entry logs, shift schedules, reports, file history, and travel can help. It is preferable to compile the data in a table using precise dates, stating the start and end times of work, breaks, and the source of verification.

Is an employee whose position is defined as “manager” entitled to overtime pay?

The job title does not replace an examination of its substance. The law excludes certain managerial positions and positions requiring personal trust, as well as work whose hours cannot be monitored, but the applicability of the exception depends on the actual circumstances.

For how many years can a claim be filed?

This period is not stated in the sources provided, so an exact number of years cannot be established on their basis. The limitation period must be checked separately according to the employment dates and the types of payments claimed, without delaying the collection of documents.

What to do next

The contract, payslips, attendance reports, and correspondence should first be collected, and the hours should then be reconstructed separately for each working day. The actual overtime should be compared with the global allowance, and it should be determined whether the position genuinely falls within the law’s exceptions. It is advisable to verify the claim period separately before initiating formal proceedings.

Sources

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