The current law says that an employee must get paid 250% salary for employment on Shabbos. The purpose of that is to discourage working on Shabbos, as no employer will want to pay that unless the work is critical and absolutely necessary.

According to resigning minister Yaakov Litzman, this actually encourages people to work on Shabbos, even when it has nothing to do with pikuach nefesh, and earn more money by doing so. People choose to work on Shabbos, Litzman says, because it is worth it to lose that day off and get paid so much more than on a regular weekday.

Litzman has proposed a law that would have employees of public (i.e. controlled by the government) companies will only earn the regular wages on Shabbos and not the 250% value. Litzman says this will take away the benefits of working on Shabbos and people will not agree to give up their day off for no benefit.
source: Kikar and Haredim10

This is not a bad idea but it will only work if employees have the "choice" to work or not work on Shabbos. If they do not really have a choice, and I do not mean they are being forced by the employers which is illegal, they will continue to work anyway but will lose the salary. Litzman (apologies but I am not sure if he is called MK or Minister right now) might be hurting the employees rather helping them and hurting than the employer. Meaning, if the Rail Authority, for example, is going to have the work being done on Shabbos, some employees will choose to work anyway - maybe they have nothing else planned or they want the additional day of wages. The Rail Authority, for example, is going to get the work done anyway.

There is no shortage of workers who will work. The Rail Authority, for example, will just have to pay less for that work, while the employees will earn less for the same work.