Employers are advised to prepare for the forthcoming amendment
to the Employment Contracts Act concerning non-competition
agreements.
All non-competition agreements become subject to
compensation
The government is preparing an amendment to the law, according
to which the employer's obligation to pay compensation for
non-competition agreements after termination of employment would be
extended to all non-competition agreements, regardless of the
duration of the non-compete restriction. Under current law, the
obligation to pay compensation applies only to non-compete
restrictions lasting more than six months. The amendment is
expected to take effect on January 1, 2022.
The amount of compensation to be paid to an employee for a
non-compete restriction would be based on the employee's salary
and the length of the non-competition agreement. If the non-compete
restriction lasts up to six months, the employer would have to pay
a compensation equal to at least 40% of the
