In December, the prime minister came under fire after a watchdog group obtained expense reports showing heavy spending on scented candles and floral arrangements at his official residence.
Earlier last year, a TV station reported that Netanyahu spent $127,000 in public funds for a special sleeping cabin on a five-hour flight to London. Netanyahu was also forced to stop buying ice cream from his favorite Jerusalem parlor after an Israeli newspaper discovered his office was spending $3,000 a year for the treat.
Some of the criticism of the family has bordered on the personal. The Israeli media has sometimes targeted her for her appearance and choices of clothing. Recently Netanyahu's oldest son made waves after it was discovered that he was dating a Norwegian student who is not Jewish.
In a statement, Netanyahu's office called Naftali's lawsuit "blackmail and outrageous." It noted that Naftali filed the lawsuit after his request to receive a permanent position on the staff was rejected. "If it was so bad for him at the prime minister's residence, why did he ask to work there permanently?" it said.
But speaking on Army Radio, Naftali's lawyer, Naomi Landau, said she could prove all of the allegations.
"The examples that were raised are an iota of what happened in practice," she said. "I could not believe that such professional harassment exists, this kind of nuisance, this kind of unreasonable behavior, to say the least, to treat an employee as a slave."
Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.