Navigating the complexities of employment regulations in Israel demands thorough understanding and meticulous attention to detail. As a legal employer in Israel, and a partner of our global clients, CWS Israel is dedicated to managing these intricacies, ensuring full compliance with Israeli employment law. This guide underscores our commitment to uphold every aspect of employer responsibility, thereby safeguarding your interests and those of your employees.
Core Employment Responsibilities
- Notification of Employment Terms: Employers must provide employees with a written notice of employment terms within 30 days of employment commencement.
- Employee 101 Form: It is crucial to fill out and update the Employee 101 Form annually or when employment terms change, to ensure all tax credit points are accurately recorded.
- Minimum Wage Compliance: Employers must adhere to the statutory minimum wage, currently set at 32.31 ILS per hour, or a minimum wage at 5,880.02 NIS Gross per month.
- Pension Contributions: Contributions to pension plans are mandatory, providing security for your employees’ future. Contributions are allocated to a Pension Fund (6.5%), a separate Severance fund (8.33%), both mandatory, and an optional Education Fund (7.5%), which is a saving fund too, with attractive tax relief implications.
- Overtime Payment: Compensation for overtime must comply with legal limits, ensuring no employee works beyond the stipulated hours without appropriate compensation. Overtime is calculated on a daily and weekly basis, to ensure Employee’s wellbeing, avoiding exploitation and burnouts.
- Travel Expenses: When Employees are required to travel to and from work are entitled to reimbursement based on the cost of regional or national monthly passes. Maximum allowance per day (of work) – 22.6 NIS, unless the Employer provide a transport solution to the Employee, e.g. Car or Shuttles.
- Recreation Pay: After one year of employment, employees are entitled to annual recreation pay. The payment amount is calculated annually, based on the tenure of the Employee with the workplace. The daily amount currently stated as 418 NIS per day. Employees in their first year are entitled to 5 days’ pay; in their second and third year – 6 days, and so forth.
- Annual Leave: Employers must ensure employees take their statutory annual leave, encouraging a healthy work-life balance. Although the Employee doesn’t have to use their Annual Leave allowance, their Employer must enable and encourage their employees to use at least 7 consecutive days of leave per annum.
- Sick Days: Compliance with laws governing sick leave compensation is essential. Employees are entitled to accrue 1.5 days per month, up to 90 days in total. The law doesn’t mandate payment from the first day of absence, but many Employers allow full payment from the first day of illness.
- Public Holidays: As the universal hub for the 3 main monotheistic religions, Employees enjoy the freedom to choose their faith’s holidays, on top of the mandatory Public Holidays as prescribed by the Israeli Law.
- Election Day Leave: Employees are entitled to leave on election days, National and Municipal alike, ensuring their democratic right to vote is upheld.
- Work Hours and Breaks: Employers have the authority to set work hours and breaks based on the type of work and daily work hours. Some employees’ roles are exempt from the law of Work and Rest, especially in managerial and higher paying jobs.
- Leave Records and Work Hours Documentation: Keeping accurate records of leave and work hours helps in maintaining transparency and compliance.
- Timely Salary Payments: Salaries must be paid by the 9th of the following month, along with a detailed payslip. Employers can face Criminal Charges for withholding salary payments, or payments later than the 9th day of the month.
- Provision for Severance Pay: Employers are required to process severance pay within 15 days of termination. The Employer is required to release the funds from the Fund Management institution, providing the Employee with direct access to the funds.
- Pre-termination Hearings: Termination of employment by the Employer is a complex matter. The Israeli legal framework is leaning toward the Employees, ensuring their rights are upheld. One of the most important steps in any termination process, is conducting a fair hearing before making any termination decision. It is madatory to provide the employee with a hearing report within a reasonable timeframe (no longer than 48 hours), advising on the final decision – to Terminate or not to terminate.
Foreign Workers’ Rights
Foreign workers in Israel are entitled to the same employment rights as Israeli citizens, including health insurance, fair lodging, sick leave, and annual leave. They are also covered under the National Health Insurance and are entitled to pension contributions.
- Employment Documentation: Proper documentation for foreign workers must be maintained, including health insurance and a work contract.
- Specific Account Contributions: Regular contributions for legally employed foreign workers must be deposited into a designated bank account.
- Penalties for Non-compliance: Employers who fail to comply with regulations regarding the employment of infiltrating foreign workers face significant fines and potentially criminal charges.
Since 2018, foreign workers in non-caregiving sectors are entitled to 1.5 tax credit points, with caregiving workers entitled to 2.75 points.
Conclusion
At CWS Israel, we uphold a steadfast commitment to ensuring all employment-related responsibilities are managed with the utmost precision and in strict accordance with legal requirements. Our dedication to maintaining a compliant and supportive workplace not only fosters a positive environment but also secures the interests of all parties involved. Should you need detailed guidance or support regarding these legal obligations, we encourage you to contact us at your convenience.