changes

Special ways to hand out payslips

Moshe

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.

Updated Min. wage for youth – Apr 2015

Moshe

On April 1, 2015 the minimum wage in Israel was updated. This has implications on min. wage for youth, as well.

The new rates are as follows:

Age                               Monthly Rate            Hourly Rate    

up to 16                        3,255 sh                                18.81 sh

up to 17                        3,487.50 sh                           20.15 sh

up to 18                        3,859.50 sh                          22.30 sh

18 +                               4,650 sh                               25 sh

 

There are other restrictions that apply to youth employment, such as max. number of hours pre day and per week, disallowing overtime and night work.

 

Tax benefits for 2015 for industry shift work and residence in national preference areas extended

Moshe

The tax benefits awarded to salaried employees who work shifts in the manufacturing industry, as well as the credit for living in certain areas defined as national preference have been extended from June 30, 2015 until the end of the tax year, December 31, 2015.

 

Change in Bituach Leumi law 1.1.2015

Moshe

Correction 159 of the Bituach Leumi law goes into effect on January 1, 2015.

According to this correction, Bituach Leumi will no longer be able to demand payment of Bituach Leumi (social security) and Bituach Briut (health insurance) if more than 7 years have passed since their first demand of payment. After this period, the Bituach money shall not be collected, nor shall it have any effect on any rights to a stipend or benefit, if the following two conditions have been met:

1. No additional demand of payment notification was sent during the period of 7 years since the first notice.

2. Said notification in #1 above was sent, however no collection procedures or offsetting of the due amount from stipends or benefits paid were taken.

There are specifics reagrding payments due on January 1, 2015 that a period of 7 years has not elapsed yet, and with certain payments due that allows Bituach Leumi to collect up to June 30, 2016 if 16 years have not yet passed.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employer’s Social Security contributions to rise from January 2015

Moshe

The employer’s contribution towards Social Security (Bituach Leumi), on the higher bracket, has been raised from 6.75% (Dec 2014) to 7.25%, for employees age 18 to retirement age, starting in January 2015.

A raise of 0.5%.

The employee’s contribution remains without change.

Minimum wage to increase

Moshe

The minimum wage in Israel  (currently at 4,300 sh per month or 23.12 sh per hour) is being updated in three stages, according to an agreement signed by the General worker’s union (Histadrut klalit) and the Presidency of the Business Organizations in Israel. This will be voted into the book of labor laws by the knesset soon.

The changes are:

per month per hour
From 4/2015 – 4,650 sh 25 sh

From 8/2016 – 4,825 sh 25.94 sh

From 1/2017 – 5,000 sh 26.88 sh

From 4/2017 onwards – 52% of the average salary (but no less than 5,000 sh) to be updated quarterly (Jan, Apr, Jul, Oct) of each year.

bankrupt cartoon

New tax Brackets for 2015

Moshe

The new tax brackets for 2015

Bracket                      Gross pay               Accumulated tax
Ceiling for 10%          5,270                               527
Ceiling for 14%          9,000                            1,049
Ceiling for 21%         13,990                           2,097
Ceiling for 31%         19,980                           3,954
Ceiling for 34%         41,790                         11,369
Ceiling for 48%         67,560                         23,739
Every additional shekel 50%

New Havra’a rates for 2014

Moshe

The new rates for convalescence pay (dmei havra’a) have been updated as of July 2014 as follows:

Private sector = 378 sh per day

Public sector – 427 sh per day

Payment is mandatory for all employees with min 1 year tenure with the present employee.

The number of days an employee is entitled to depends on the sector and the number of years of tenure they have incurred.

 

Everything you wanted to know about travel expenses to and from work

Moshe

reimbursement of travel expenses to and from work to salaried employees is an expanded regulation order. As such it is mandatory for all employers in Israel.

The only exceptions are:
1. employees whose terms of employment are under a collective work agreement that has favorable terms.
2. employees with physical or mental disabilities who are employed in protected places of employment that the State of Israel contributes towards their upkeep.
3. employees who live within walking distance from the place of work (less than 2 bus stops).
4. employees who receive a ride to and from work at their employer’s expense or on behalf of the employer. (employees who receive a ride one way are eligible for
half of the travel expenses below). This includes employees who have a company/leasing/rental car from their employer.

The maximum mandatory amount per day is 26.40 sh (from Jan 2014). This amount is updated periodically according to the changes in public transportation rates and it is incorporated into the expanded regulation order.

All employees who need transportation in order to get to work, are entitled via the expanded regulation order, to their employer’s participation for travel expenses by public transportation (bus and or train, not taxis). If an employee needs more than one bus to get to work, he is entitled to participation for that as well (under the condition that he needs at least 3 city bus stops to reach the place of work), up to the maximum mandatory amount per day.

Payment is via the payslip along with salary, in a separately itemized line on the payslip. In general, travel expenses are paid gross (not net) and are subject to income tax, social security and health tax (as salary is). If an employee’s contract or work agreement specifies that travel expense will be paid as a net payment, this means that the taxes are paid by the employer, which is legal but not very common.

The amounts are the fare for a single ride multiplied by the number of rides per day needed by the employee multiplied by the number of days worked (regardless of the number of hours worked). If there is a monthly bus card or a reduced rate bus card, the employer can pay the cheapest of the options. For absent days (no matter what the reason, even if they are paid absences, employees are not eligible for travel expense reimbursement).

 

 

 

 

 

2014 tax update for salaried employees

Moshe

1. The tax brackets that were in effect since Jan 2013 will remain in effect in 2014, unchanged.

10%        up to 5,280 sh

14%        from 5,281 sh –  9,010 sh

21%       from 9,011 sh –  14,000 sh

31%       from 14,001 sh – 20,000 sh

34%      from 20,001 sh –  41,830 sh

48%      from 41,831 sh –   67,630 sh

50%  each additional sh.

 

2. The value of tax credit points remains unchanged at 218 sh.

3. The following tax amounts have been updated from Jan 2014:
A.  Ceiling for employer’s contribution toward pension – 36,356 sh per month.
B. Expense for foreign expert – 330 sh per day.
C. Salary for foreign expert – 13,100 sh per month.
D. Ceiling for linked to consumer index only loans to employees  – 7,800 sh. (any loan above this amount carries a mandatory interest rate of 4.31%
(+ v.a.t. where applicable).
E. Value added to taxable income for cell phone usage – 105 sh.
F. Ceiling for employer’s contribution toward Keren Hishtalmut – 15,712 sh per month.
G. Tax benefit for shift work:  Ceiling – 10,710 sh.  Tax credit 15% – up to 940 sh anually.
H. Ceiling for tax exemption from severance pay – 12,360 sh per year for amounts paid from 1.1.2014 onwards.
I. Income credits for deposits to Gemel/ Pension plan savings:  section 45 – 169 sh per month, section 47 – 8,700 sh per month.
J. Value added to taxable income for company/leasing car (per month):
group 1  – 2,730 sh
group 2 – 2,960 sh
group 3 – 3,810 sh
group 4 – 4,570 sh
group 5 – 6,330 sh
group 6 – 8,200 sh
group 7 – 10,550 sh
L3 motorcycle (engine capacity over 125 cc and over 33 hp) – 910 sh

For cars first registered from Jan 1, 2010 onwards (linear module), the ceiling for list prices is 506,580 sh and the deduction for Hybrid cars is 560 sh.
K.  Update for extra tax credit points for higher education (starting in Jan 2015):
Anyone completing an academic BA during 2014-2015, will be eligible for 1 additional tax credit point per month in the following tax year or the year after
(employee’s choice) .
Anyone completing an academic MBA during 2014-2015, will be eligible for 1/2 additional tax credit point per month in the following tax year or the year after
(employee’s choice) .
In fields where an apprenticeship is required, the employee can defer receipt of the additional tax credit point (or half point) to the tax year following the end of
apprenticeship.
Anyone completing an academic Phd in medicine or direct track, during 2014-2015, will be eligible for 1 additional tax credit point per month in the following
tax year or the year after  (employee’s choice), and another 1/2 additional tax credit point per month in the year following.

In 2014, all employees claiming additional tax credit points for academic studies, must fill out the appropriate boxes on the 101 from, attach a tax form 119 and all required documents.

L. Tax discounts for settlements / border areas:   Ceiling for section 11 (Kiryat Shmona, Eilat and confrontation line settlements – 241,320 sh annually.
Ceiling for residents of other communities as defined in section 11 B of the first section   – 160,800 sh annually.

The validity of tax benefits to the southern confrontation line residents (Sderot and the western Negev) has been extended until Dec 31, 2014.

The following communities have been removed from the list of eligible places, effective 23.02.2014: Eilot regional council, Bet Shean, Hazor Haglilit, Arava
Tichona regional council. This section is not final and may be subject to change.

The tax discounts for settlements have changed from Jan 2014:

section 1 (north settlements) –  11% (in 2013 was 12%)
section 2 (Kiryat Shmona) – 22% (in 2013 was 24%)
section 3 A – (Mitzpeh Ramon)  – 22% (in 2013 was 24%)
section 3B (Dimona and Yerucham) – 18% (in 2013 was 19%)
section 3C – 14% (in 2013 was 15%)
section 3D & 3E – 11% (in 2013 was 12%)

Employees who work at more than one place of employment and received a tax co-ordination, need to reapply before Feb 28, 2014, otherwise employers have been instructed to deduct maximum tax (currently 48%)!

Raise in employer’s social security contribution rates from Jan 2014

Moshe

Employer’s contribution rates towards Social Security (Bituach Leumi) for salaried employees, on the portion of salary over 60% of the average salary (currently 5,297 sh but due to be updated) will be 7% starting January 2014’s payroll (up until Dec 2013 it was 6.5%).