Work disability insurance אובדן כושר עבודה

Loss of work ability is a serious problem and usually results in a sudden and drastic loss of income as well. All salaried employees in israel are protected against a loss of work ability situation by The national social security (Bituach Leumi). In order to receive a stipend a form needs to be filled out and submitted. The form needs to include the employee’s salary information and payroll information for the months preceeding the loss of work ability, as well as the employer’s signature confirming the salary information. Employee’s with pension plans, these usually have loss of work ability insurance built in to the policy. This will usually cover 70% of the employee’s gross pay. Bituach Leumi and pension plan for loss of work ability payments offset each other. An employee can purchase additional coverage so that it will not offset at additional cost. Speak to your pension plan company for more details.

The criteria for payment of loss of work ability insurance are the following:
1. 75% or more of loss of work ability. Approved by employment doctor for as long as this condition continues or the policy ends, which ever comes first. There usually is a waiting period when an employee joins a pension plan until they can file. If the loss of work ability occurs before then, the employee will only receive payment after the waiting period is over.
2. Complete coverage in case of acts of terror.
3. During the period of payment for loss of work ability, the employee is exempt from contributions to the pension plan.

How and where to file a complaint on infringement of labor laws

In case of suspicion of violation of labor laws, one can file a complaint with the regulation and enforcement administration of the Ministry of Labor and social affairs Ministry (which has been incorporated into the Ministry of Economics).

It is important to stress that during the filing of a complaint, it may be requested that the complaint remain anonymous and during investigation the employee’s details will not be revealed.

Filing a complaint with the regulation and enforcement administration is

    not in place of a filing a suit in labor court.

In general, complaints are meant to be the cause of an investigation into the allegations, which if found to be substantial can lead to fines and usually will ensure correction of this behavior in the future by the employer. It has been found to be effective in deterring employers from continuing to disregard the law regarding employee’s rights, this due to extensive fines, in recurring cases, and even imprisonment for the CEO / owner, as well as prosecution of offending employers, who if found guilty will have a criminal record !
The names of all fined employers is on the Ministry’s website for all to see:

http://economy.gov.il/Employment/WorkRights/WorkRightsEnforcement/FinancialSanctions/Pages/default.aspx

As stated clearly on the Ministry’s website: The process of a complaint and ensuing investigation against an employer is not meant to turn back the clock and make things right, nor is it meant to award the complaning employee any form of compensation, statement or monetary award, but rather to bring the employer to comply with the existing labor laws, avoid violation of other labor laws or recurring violations of the same nature. During the course of the procedure the employee will be contacted by an employment inspector who will take a statement from the employee, which serves as a basis for legal proceedings against the employer. During such proceedings the employee may be called upon to testify before the court. (If the complaint was filed anonymously, the employee can ask that his testimony be given secretly).

To receive his rights an employee may sue the employer in labor court. The ministry of labor and regulation and enforcement administration are not partial to any such lawsuits, nor do they file suits on behalf of employers or employees.

Filing a complaint does not prevent a civil suit and filing a civil suit does not prevent filing a complaint. These are two separate procedures, each with a set purpose.

There are several labor laws that the administration deal with specifically: Women’s employment law, youth employment law, work and rest hours law and employment agencies law.

How to file a complaint

Complaints to the regulation and enforcement administration can be done via one of the following methods:

1. Online (Hebrew only): https://forms.gov.il/forms/Resources/DowloadSetup/AGFormsDownloadToolbar.htm?formid=pikuach21%40moital.gov.il
(works only in Internet explorer – version 11 at least)
2. Email: report.achifa@economy.gov.il
3. Fax: 03-6828690
4. Phone: 03-7347839/40/49/50 or *2570
5. Voicemail: 1800-354-354

You must state: your first and last name, your phone number (for contact purposes), the employer’s details (name, address and tax i.d. number as they appear on your payslip, as well as the Boss’ name and the employer’s phone number) and a short description of the reason for your complaint. Be precise and to the point, no need to elaberate.

Loss of work ability – rights and benefits

An employee who loses his ability to work due to illness or accident may find himself in a situation of loss of income and livlihood. In order to avoid this scenario all residents of Israel are insured against loss of work ability due to illness or accident by Bituach Leumi (Israel’s social security), this via their mandatory monthly contributions via their payslip. These contributions cover many different types of social security: unemployment, old age stipends, child stipends, employer bankrupcy, reserve army duty, maternity leave – just to name some of them).

In addition to Bituach leumi, many employers insure their employees in loss of work ability insurance, although it’s not mandatory. Employees can also purchase loss of work ability insurance privately. All pension plans also include loss of work ability insurance built in to the policy.

It is extremely important that you understand the implications on this subject so that if one finds themselves in this situation they know where to turn and what to do in order to minimize the beaurocracy and ensure they receive what they are eligible for.

    So, what is loss of work ability?

Loss of work ability is when an employee loses their ability to work and earn income due to injury as a result of illness or accident.

Loss of work ability can be temporary (usually up to 3 months – 90 days, after which the employee recovers and returns to work at full capacity) or permanant (non reversable and the employee will not be able to return to prior ability) and may occur in several situations:

1. Complete loss of work ability: the employee is unable to work in any type of work due the injury he/she has incurred.
2. An employee who, due to injury, his/her ability to earn income has declined and his/her pay has reduced considerably.
3. An employee who cannot continue to work in a position that fits his profession or knowledge and education due to injury.

It is important to note that insurance companies include explicit definitions for loss of work ability in the profession of the employee who is insured in the policy.

    Bituach Leumi

The coverage is dealt with by several departments, depending on the type and severity of the injury.
General disability dept

Via a monthly stipend to employees injured due to illness or accident and as a result their income earning ability has been reduced by at least 50%, or by 60% if permanent loss of work ability or 45% if temporary loss of work ability.

    Work related accidents dept

Employees who were injured during the course of work or due to a work related illness (one recognized as a profession causing illness).

    accident dept.

Employees injured in accidents that are not work related (traffic accidents that were not on the way to or from work, household accidents, etc) and as a result are unable to work. This type of injury usually will enable employee to receive monetary compensation for up to 90 days. If the damage is not remedied after 90 days, the employee will need to file for general disability stipend.

Note: The amount of compensation is not based on the employee’s actual income, but rather defined in the Bituach Leumi law and equal for all employees. Someone who had a high income may find he gets less compensation than his/her salary was, sometimes substantially. In addition, Bituach leumi usually pays stipends to those eligible between the 17th and the 20th of the month for the previous month (as opposed to salaries which are paid by the 9th of the month).

    Private insurance policies

Private insurance policies, whether via a collective policy for employees by the employer or via a personal insurance policy the employee took out privately, usually include a waiting period of 3 months prior to eligibilty for compensation. Many policies will include a clause under which the insurance company commits to a retroactive payment for the first three nmonths when the injury is prolonged. There is a provision that excludes monthly contributions in case of a claim on the policy due to loss of work ability. There usually is a separate clause committing to payments according to the policy in addition to Bituach Leumi stipends. The payment from the insurance policy is at least 75% of the average wages in the year previous to the injury (as opposed to Bituach Leumi which is different and much lower).

In short, an employee who has been injured and as a result loses work ability is eligible for money from Bituach Leumi and if insured via a loss of work policy via an insurance company, he would be eligible for money from them as well. If the injured employee is totally dependant on a family member for daily routine (dressing, bathing, eating. etc) the family member may also be entitled from Bituach Leumi and the tax authority. This applies in case of death of the employee as well.

In all cases, it is highly recommended to consult with a certified and professional insurance agent or lawyer who deals with labor laws and loss of work ability. The above advice does not replace the need for such professional advice, is not legal advice and may not be applicable to all cases. It is merely a post with basic knowledge to help employees understand the issue better.

Special ways to hand out payslips

In the past I have been asked many times whether sending a payslip via email or posting it on a website is legal. It never reached the court system for a ruling, but the lawmakers, realizing the advances in technology, addressed the issue by updating a new statute in the protection of salary law.

On July 26, 2017 a new statute was added to the protection of salary law (special ways to hand out payslips) was publicized in the records thus making it officially part of the law. The statute states:

An employer may hand out payslips by one or more of the following special ways detailed below, in place of printed payslips;

    1. Via secure internet site on the employer’s behalf * to which an employee may access with initial password supplied by the employer, whereby the employee can view his payslip.

    * An “internet site on the employer’s behalf” is a site that serves the employer and the following two conditions are met:
    A. Allows access to the data saved on it after the employee has been personally identified.
    B. Protective measures are taken, on a regular basis, against unauthorized penetration and disruption of proper useage.

    2. Sending the employee’s payslip to an email address provided by the employer (work email) via an email program.

    3. Sending the employee’s payslip to the employee’s private email address.

      The conditions under which this statute apply are:

    1. The employee agrees and signs written consent to waive receipt of printed payslip via waiver form (see below).

    2. The payslip can be printed at anytime in the future upon demand.

    An employee can retract this consent at any time in the future, in writting, including email notification and the employer will act accordingly from the month after the notification is received.

    The payslip, issued in one of the above special methods, the following directives shall apply:

    1. Issuing the payslip will be done by the determined date (the date salaries are deposited in the bank).

    2. In case of sending payslip to the employee’s personal email address – the employee shall acknowledge receipt, in writting (reply email) shortly after receiving the payslip, and no later than 5 days after the determined date, that
    he has received the payslip.

    3. An employer who has not received email confirmation from an employee acknowledging receipt of the payslip within 5 days of the determined date will issue a printed payslip no later than 10 days after the determined date.

    An employer who issues the employee’s payslip in one of the special ways described above will enable the employee to receive a printed payslip, upon request, for a period of no less than 7 years from the determined date for supplying the employee a payslip according to law.

    An employer who issues payslips via secure internet site, via employee access with password shall allow access to payslips for a minimum period of 12 months from the determined date for supplying the employee a payslip according to law.

    The employer is required to take protective measures that will not allow changes to the payslips that are issued according to this statute.

    The following is an English language wording of the form that needs to be signed by the employee. Note this a legal document and the employer should keep the signed form in the employee’s file.

    Form of consent to receive payslips via electronic media

    Part A

Employee’s name ____________________ Israeli I.D. # ________________________

Name of employer _____________________ Place of work (location) _____________________________

Email address to which payslips will be sent or address of employer’s site to which payslips will be accessable ______________________________________

Employee will choose the method he prefers and check the applicable box accordingly.

I, the undersigned whose details appear above hereby give my consent to receive my payslip for my work in the manner specified below and I am aware that by doing so I waive my right to receive a printed payslip on the determined date according to the law, however I will retain access to the payslip according to statute 3 (A)

[ ] 1. Sent to my email address in the employer’s email system as listed above.

[ ] 2. Via a secure website on the employer’s behalf, accessable by personal password. The site address and password have been provided to me by the employer.

[ ] 3. Sent to my personal email address as listed above.

Note: the employer may erase two of the three options above allowing only one of the options, but he may not erase option 4 below !!

[ ] 4. I, the undersigned whose details appear above do not agree to receive my payslip for my work via electronic methods in any of the 3 options above. I hereby request receipt of a printed payslip each month by the determined date according to the law.

    Part B

This section is to be filled out and signed by the employee only when option 3 above has been chosen as the method in which the employee will receive his payslip.

1. The private email address above has been given to the employer by me and with my consent. I hereby state that this email address is in my own personal use.

Employee’s signature ________________________________ Date __________________________

I have chosen the option to receive my payslip via my personal email address (option # 3), my consent to receive my payslip via this option is with my understanding of all of the following:

1. I am aware that external email systems and accounts are not under the employer’s control.

2. Receiving this form to fill out and sign is the employer’s obligation to take all reasonable measures to ensure that access to my payslips and viewing the information on them will be done soley by me, or with my permission, and at the least the employer has taken measures for encoding the data in order to protect my privacy.

3. Despite the above, I am aware of all of the following:
A. I agree that my payslips be sent to an external email system and the data may be exposed to third parties, amongst them the service provider of the external email service.
B. There is no guarantee that the external email system contains protective measures from hackers, unapproved access and disruption of functionality.
C. It is possible that the data will be lost, not be saved or will not reach the desired destination due to circumstances that are not under the employer’s control.
D. It is possible that the data is stored outside of the borders of the country of Israel and this may have an impact on my rights regarding the usage of the data.
E. I am aware that it is highly recommended that I personally save and backup the payslips that are sent to me via this option.
F. This consent of mine is in effect from now on and until further written notification by me that I have rescinded my consent.

Employee’s signature ________________________________ Date __________________________

Note: This is not legal advice, nor is it meant to be. The purpose of this post is to enhance employee and employer awareness to this addition to the protection of salary law.
The wording is my own and not a literal translation. In any case of contradiction between this post and the law, obviously the wording of the law applies. Employers may use the wording of the above by copying the wording into a word document.

Are work contracts mandatory ?

All employers are required to issue either a work contract or an “employer’s notice of employment terms and conditions” to all employees within 30 days of starting employment. If the employees are youth (under 18) this must be done within 7 days of starting employment. Any change in the employment terms and conditions must also be issued to an employee within 30 days of the change (7 days for employees under age 18).

The only changes that do not require notification to the employee are:
1) Changes due to laws, comprehensive ordinances, collective agreements.
2) Update in salary listed in original contract or employer notification (although it is recommended).
3) A change that is itemized on the payslip.

The regulations state that for an employer to be considered as complying with this regulation the following information must be included in either the work contract or the notification:
1. Employer’s name
2. Employer’s address
3. Employee’s name
4. Employee’s address
5. Employee’s job title and discription of main duties and responsibilities
6. Full name and job title of employee’s direct supervisor
7. Address / location where employee is to be employed
8. Employee’s work days and hours and length of work day
9. Employee’s weekly rest day
10. Employee’s salary and any other payments he/she is entitled to
11. All social benefits employee is entitled to, their % or amounts
12. Employee’s start date, and duration of contract (if applicable)

The notification needs to be signed by the employer. In cases of foreign workers, it needs to be in the foreign worker’s native tongue or a language that they fully understand and be signed by both the employer and the employee.
Failure to comply may result in any or all of the following scenarios:
1) lawsuit in labor court by the employer – there is a specified amount that can be claimed for failure of the employer to comply which can be awarded by the court without need to prove any monetary damage.

There are three separate forms for employer notification to employees:
1. Employer’s notification form of details & terms of employment.
2. Employer’s notification form of contributions towards social benefits (pension, study fund, etc)
3. Employer’s notification form of change in terms of employment (any of the above information that changes require this notification)

All 3 forms are available for download on the Ministry of Economics website: Working Conditions Notification Forms

In work contracts for “net pay” who gets the new “family net” benefits, employer or employee ?

The “family net” plan, or Kachlon law (named after the Finance Minister Moshe Kachlon) which recently went into effect retroactively from January 2017 added tax credit points for parents of children under 5 and made equal the tax credit points for those children given to men and women. The law will be in effect for the tax years 2017 and 2018 only, unless the knesset decides to add in additional years. If not, the tax credits will return to present state in Jan 2019. Everyone knows that employees with regular gross salaries will receive a larger net pay as a result of this law. But what happens when an employee’s work agreement lists his salary as net ? In general, changes that occur to the tax brackets in a net pay salary will lower the employer’s expense by lowering the gross pay and as a result the taxes, while the employee’s net pay remains unchanged.
In general it seems that this is acceptable practice. But in cases where substantial tax benefits are given to employees, such as the 2001 Negev residents tax benefit, the lawmakers intent was to give this benefit to the employees and not to employers of Negev residents. the same would apply here regarding the Kachlon law. A recalculation of the new net pay would need to be done by using the gross pay, pre change and after adding the change configuring the new net pay.

The above is not legal advice nor is it a replacement for seeking such legal advice. It is the professional opinion of the author based on a labor court decision regarding net pay and tax benefits.

The right to an hour off work/day when spouse is in active reserve army duty

IDF soldiers in action
The women’s employment law was updated on July 3, 2017 (correction 58). Accordingly, an employee will be eligible to be absent from work for one hour per day during the period of time when their spouse is in active reserve duty (miluim) in the I.D.F. under the following circumstances:

1. The period of the spouse’s active reserve duty is no less than five consecutive days.

2. The employee has at least one child under age 13.

3. The employee is employed in a full-time position as accepted in place of employment.

4. The employee notified the employer of the intent to utilize this right and presents the employer with a copy of the spouse’s proof of actual active reserve duty.

The above applies to men and women.
Payment for above hours are not to be deducted from salary.
This does not apply to employees who are eligible for paid parent (breast feeding) hours or pregnancy hours.

Prevention of discrimination in acceptance to a job

It is forbidden by law to discriminate against candidates for employment or against employees due to gender, age, religion, nationailty, country of origin, political beliefs. The equal employment opportunities law (1988) requires employers to pick out only relevant information about the candidates for the position they are looking to fill. If anyone is discriminated against they can contact the Equal opportunities commission for initial legal consultation. If the commission feels a case is justified they may take legal action against the offending employer. People who feel they were discrimated against may file a suit in labor court. The Equal opportunities commission contact information is:
The Equal opportunities commission נציבות שוויון
Address: 5 Bank of Israel st. Govt. quarter, Jerusalem כתובת: בנק ישראל 5, קריית הממשלה, ירושלים
Mailing address: P.O. Box 3166 Jerusalem 9103101 ת.ד. 3166, מיקוד
Tel: Tel-Aviv טלפון: ת”א – 03-7347215
Jerusalem ירושלים 02-6662367, 02-6662780
Haifa חיפה – 04-8613902/1
National commission נציבות ארצית – 02-6662701
Email: shivion@Economy.gov.il :דואר אלקטרוני

    Want ads

      A good want ad is one that describes the position and the requirements the employer seeks and encourages job seekers to apply for the position. When an employer places a want ad for a position. It is supposed to give the professional backround required while appealing to the widest range of potential candidates. the language and wording used, as well as any illustrations should reflect this. Avoid using language or wording that applies to one gender, a specific age group, color, ethnic backround, religion, nationality or residents of a certain area(s). Also avoid direct discrimination, such as “wanted: good looking men” or “looking for young woman”. Avoid circumventive discrimination, such as if a postion requires very little verbal communication do not write in the ad “high level command of Hebrew required”.

    Job interviews

Not all questions are legal in a job interview. Personal questions such as “are you pregnant?”, “Do you intend on having more children?”, Aren’t you too old for this job?”, “do you smoke?” are totally illegal and also irrelevant. Employees who are asked illegal questions that do not relate to previous experience and knowledge should be met with a smile and “This question has nothing to do with the position, let’s please keep this interview professional.”
Questions regarding a candidate’s army service or National service – or lack of either, or whether they serve in reserves, what their rank is are also prohibited.
Employers are advised to have more than one interviewer present at job interviews and if possible should be representative of different groups of the population which will usually drastically reduce the chance of any discrimination occurring. Remember that as much as you are screening candidates, they are screening you as well. Keep it professional.

In cases where a candidate feels he/she was discriminated against, it is advisable to consult first with the commission and if necessary with a lawyer who specializes in labor law.

Employers – 6 simple rules to follow and substantially illiminate law suits by employees

From our years of experience, it is very clear that employers who follow these six simple rules (which just happen to be labor laws and regulations that are mandatory for all empployers, in both public and private sectors, in Israel) will reduce drastically the number of suits by employees and former employees. Most of the lawsuits filed in recent years deal with these issues. They are really simple to adhere to and can save you literally time and money.

1. Sign all new employees, within 30 days of their start date (or within 7 days of start date if they are under 18 years of age), on a notification of employment conditions or a contract. This should be done prior to starting to work, or first thing on the first day of work along with other technical things like filling out 101 tax form, issuing a time card, etc
If you use a contract it must contain all of the information on the notification of employment terms form, which is downloadable here:
http://economy.gov.il/Employment/WorkRights/WorkingRelationshipsCreation/Pages/WorkingConditionsNotification
This will illiminate any disputes regarding terms of employment of employees and possible monetary lawsuits for failure to provide this for sums of up to 15,000 sh without need to prove any damage.
A new notification needs to be issued any time that any of the mandatory details change.

2. Make sure all employees have received their salary, payslip and time-sheet by the 9th of the month following the month of salary being paid (For example: June salary – by July 9th). Make sure the payslip is itemized and clear and includes all mandatory information required by law. Eliminate future lawsuits for up to 5,000 sh for each payslip, without need to prove damge. Failure to provide a time-sheet can result in lawsuits for overtime pay and a fine for each month for each employee by the regulation dept of the Ministry of Economics.

3. Do not fire an employee before correctly holding a preliminary hearing according to protocol and avoid lawsuits of tens of thousands of shekels for Illegal termination.

4. Keep track of all employee’s sick days and vacation days balances to avoid unnecessary disputes during employment and possible monetary lawsuits for failure to do so.

5. Insure your employees with mandatory pension plan after six month’s tenure, if they dont have a previous pension plan, or after three month’s tenure if they do have a previous pension plan – in which case its retroactive to the employee’s start date.

6. The more you are transparent with your payslips: itemizing each payment separately and clearly it will be easier understood and avoid any unnecessary disagreemtns and future lawsuits.

Israpay has over 20 years experience in implementation, setup and fine-tuning payroll programs and we will be happy to assist you in ensuring you comply with all the labor laws, regulations and statuary instructions. Get in touch today and see how we can help you save time and money !

Youth minimum wages – Jan 2017

Due to the mandatory raise in minimum wages in Israel, the minimum wages for youth was also updated.

up to age 16 = 3,500 sh for a monthly wage or 20.23 sh /per hour.

up to age 17 = 3,750 sh for a monthly wage or 21.68 sh /per hour.

up to age 18 = 4,150 sh for a monthly wage or 23.99 sh /per hour.

In addition, for full time, the work week for youth is 40 hours and 173 hours per month. For partial work (not full time – prorated accordingly)

All youth need to be given an employer’s notification of terms and work conditions within 7 days of their start date and monthly payslips and timesheets, same as adult employees.

The Israeli Pay Slip – An In-depth Explanation for The Perplexed

As with most things, payroll is much more complicated in Israel than in other countries. In January 2009 a new law was passed to ensure uniform mandatory information that must be specified on all pay slips.

The purpose of this article is to familiarize you with the terminology and help you understand what is printed on your pay slip. For those of you working, it is highly advised to examine your pay slip each month in order to ensure that there are no mistakes. Understanding what was paid/deducted from your pay is critical and to your benefit.

Continue reading “The Israeli Pay Slip – An In-depth Explanation for The Perplexed”