Termination

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

Moshe

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 !

Employee’s Rights Handbook

Moshe

The “Employee’s Rights Handbook”

The first comprehensive, English language guide to Israeli payroll.
Whether  you are an employer or an employee, a new oleh or an English speaker who has trouble with the Hebrew terms, this publication is for you!

 

Employees:

Understand the terminology, layout and the Hebrew terms on your payslip

Know your rights

Understand the labor laws

What mandatory things need to be itemized on the payslip?

What are the things you need to know upon termination?

How many vacation days are you entitled to?

Is Purim a paid holiday?

What are the rights of a pregnant employee?

 

Employers:

Do your payslips comply with all the new regulations?

Do you issue employees “notification of terms of employment” as required?

Are employees given a fair hearing prior to termination?

Understand what obligatory payments exist in Israel

What is allowed to be deducted from an employee’s salary?

Is an employee who is on maternity leave allowed to work from home?

Must I pay travel expenses to all employees?

What can and cannot be deducted from an employer’s salary?

Are you aware of penalties for infringement on regulations and labor laws? (avoid this by knowing what needs to be done)

 

In this guide you will find:
* An overview of labor laws, regulations, expanded regulation orders, collective
agreements and statutes

* The make-up of the Israeli payslip

* Social Security

* Health Insurance
* Income tax

* Holiday pay, sick day payment, vacation, overtime payment, bereavement leave,
maternity leave

* Minimum wage

* Youth employment
* Advance notice

  • Tips             And much more!

 

A must for employers and employees alike. Get your copy today! This 107 page publication in hard-copy is not available in stores OR Anywhere else, get your copy today !

Price: 100 sh

For orders please go to: Order Here and fill out your details. You will receive an E-invoice for payment after which your book will be mailed to you. Self pickup is available in Jerusalem: Please state if you are interested in this option.Employee's Rights Handbook

Announcing “Employee’s Rights Handbook” book launch and lectures

Moshe

Book launch and lecture will be held:

In Jerusalem: on May 19th, 2015  19:00  at AACI Jerusalem, The Glassman family center Pierre Keonig st. corner of 2 Poalei Tzedek st., 4th floor (opposite Hadar mall)

In Tel-Aviv: on June 17th, 2015 16:00 at AACI Tel-Aviv, 94 A Allenby st.

 

The “Employee’s Rights Handbook”

The first comprehensive, English language guide to Israeli payroll.
Whether  you are an employer or an employee, a new oleh or an English speaker who has trouble with the Hebrew terms, this publication is for you!

 

Employees:

Understand the terminology, layout and Hebrew on your payslip

Know your rights

Understand the labor laws

What needs to be itemized on the payslip?

What are the things you need to know upon termination?

How many vacation days are you entitled to?

Is Purim a paid holiday?

What are the rights of a pregnant employee?

 

Employers:

Do your payslips comply with all the new regulations?

Do you issue employees “notification of terms of employment” as required?

Are employees given a fair hearing prior to termination?

Understand what obligatory payments exist in Israel

What is allowed to be deducted from an employee’s salary

Are you aware of penalties for infringement on regulations and labor laws? (avoid this by knowing what needs to be done)

 

In this guide you will find:
* An overview of labor laws, regulations, expanded regulation orders, collective
agreements and statutes

* The make-up of the Israeli payslip

* Social Security

* Health Insurance
* Income tax

* Holiday pay, sick day payment, vacation, overtime payment, bereavement leave,
maternity leave

* Minimum wage

* Youth employment
* Advance notice                       And much more!

 

A must for employers and employees alike. Get your copy today! This 107 page publication in hard-copy is not available in stores, on-line orders:

 

http://www.israpay.com/announcing-the-release-date-for-employees-rights-handbook/

Announcing the release date for Employee’s Rights Handbook !!!!

Moshe

Finally, the long awaited Employee’s Rights Book is to be released in Hard copy. The release date is Sunday March 15, 2015

At present, this is the only format. There may be a PDF purchase option at a later date.

The book is 107 pages of vital information for employers, employees and anyone interested in Employee’s rights, labor laws and the makeup of payroll in Israel.

Announcing the first and only English language guide in simple easy to understand language !!!

The Book also contains a dictionary of common Hebrew payroll terms and their English translation, examples of payroll forms, useful contact information, tips and more.

Get your copy today,  and know your rights !

price: 100 sh (including mailing). Optional self-pickup in Jerusalem (85 sh).
Payment via credit card or paypal, use this link:

<a href=”http://www.vcita.com/v/israpay/make_payment?pay_for=Employee’s%20Rights%20Handbook&amount=100″ target=”blank”>pay</a>

or follow the schedule an appointment on the left hand side of the home page of this site.
If you encounter a scheduling error notice, send the following details:
(Name, mailing address, email address, phone/cell number. If you wish that the invoice be made out to a different name than the one you supplied, please state)
to moshe.israpay@gmail.com and An invoice will be emailed to you. When you open the invoice you will have the ability to pay.

Check payments option:  send a check made payable to Moshe Egel-Tal along with the above info to

Israpay
P.O. Box 44429
Jerusalem 9144302

 

 

 

 

Severance Pay – a minor detail you should be aware of

Moshe

Everyone knows that when an employee is terminated and he has worked for at least one year for the employer, he is eligible for severance pay. Most employees also know that severance pay is one month’s pay (according to the last full salary) multiplied by his tenure. Or in layman’s terms, one month’s pay for each full year worked and prorated for any portions of a year.

The “minor” detail that everyone should be aware of is the question of what actually is the “last full salary” ?

Well, it really depends on how you are employed. The simple case is that of an employee who receives a monthly based salary, then the above would apply.

However, there are other types of salaries: Hourly based, Daily based, job based.

Many unique scenarios can also have an effect on what the “last month’s pay” actually is and thus effecting how severance pay is calculated.

For instance, an employee who worked full-time and changed to part time at some point (or vis-versa), an employee whose pay was reduced, an employee that had a temporary change in his last salary, an employee whose type of employment changed in essence, an employee whose position changed in essence or an employee who receives a base pay and changing commissions.

The Labor laws all specifically address these scenarios by dividing up the salary into several parts, before and after the change and a separate calculation is done for each part accordingly.

Those who receive changing salaries due to hourly or daily rates that change each month due to the number of hours/days worked or due to commissions – an average of the last 12 salaries is used as a basis for severance pay calculation.

 

Employer who single-sidedly reduced employee’s salary was forced to pay severance pay

Moshe

The employee worked for a gardening company. Upon recieving his last payslip, he discovered that his daily rate had been reduced substantially !

He contacted the employer, demanding that his daily rate be restored to what it was previously, as no-one notified him of any change and he also did not agree to any such change.

The employer refused on several request attempts by the employee, stating that it was a simple “computer mistake” but the bottom line is the same. As a result the employee resigned his position and sued the employer in labor court, demanding his daily rate be restored, as well as severance pay and social benefits from the full rate and not partial from the new, reduced rate, as the employer calculated.

The employer countered, in his response to the court, that the employee resigned his position and as such is not entitled to severance pay. In addition, the employer requested that the employee pay him for failure to give 30 days advance notice.

The court ruled that relevance of section 11a of the severance pay law, which enables an employee to resign his position and still be eligible for severance pay, is upon the employee.

Basically, the employee was able to prove that the employer single-sidedly reduced his wages, by submitting photocopies of his payslips to the court as evidence.

Reducing salary is considered a “worsening of work conditions” that an employee is not expected to continue working under.

The employer stated to the court that after amendment 24 to the “protection of salary” law in 2008, the employer was instructed by his bookkeepers and legal advisors to itemize all payments on the payslips, instead of the one line – “salary” which was used up until then. The employer “fixed” this by lowering the salary rate and adding other mandatory items seperately, such as travel expense and Havra’a. The court ruled that these other items should have been added in addition to the existing pay and not all inclusive, since the item listed was only salary.

The court awarded the employee full severance pay and the employer was instructed to pay the employee the remainder of his salary (restore the original rate) and the social benefits from the full amount, as well as back pay (from his start of employment) for travel and Havra’a.

It pays for employers to configure payslips properly, according to the law, and avoid such scenarios.

Section 14 of the Severance pay law

Moshe

 

The severance pay law (1963) is the law that defines the employee’s right to severance pay at the end of employment.

On a side note, there are criteria specifically defined in the law that determine under which circumstances an employee is entitled to severance pay. But, that is not what this blog post is about. However, there are 2 basic criteria that determine eligibility for severance pay in regular cases: An employee worked for at least one year and he was fired. If the employee resigns he forfeits the right to severance pay. (There are exceptions, but we won’t get into that right now).

Section 14 of the severance pay law is titled “severance and benefits” and it deals with cases in which both the employer and employee made contributions (via the payslip) towards pension or savings plans. According to section 14, the monies accumulated in the “severance pay” portion can be substituted for severance pay. Or in other words, by releasing the severance pay portion to the employee, the employer would then be exempt from paying any severance pay !

In 1998, the Minister of Labor signed an order enabling employers together with their employees to agree on enforcing section 14 at the place of employment. In this case, they do not need the Minister’s signature to enforce it. However, there are certain criteria that must be met in order to enforce section 14:

  1. The payments to the pension plan/ savings plan need to be the % defined in the general permit (including insurance coverage).
    This means only full pension and not mandatory pension
  2. There needs to be explicit agreement in writing between the employer and the employee, prior to start of employment.
    This means that it is part of the work agreement and known in advance.
  3. The employer needs to forfeit explicitly return of severance pay to him if the employee resigns.
    This means that employee leaving employ for whatever reason would receive the severance pay that has accumulated in the pension plan and nothing more.
  4. The monthly payments need to be paid on-time  !
    This means that the deductions from payroll need to be deposited into the pension plan by the 15th of each month. If the employer writes the check to the pension plan on the 15th and sends it via mail – that doesn’t count. One can easily see the date of deposit on the semi-annual statements the pension plan companies are required to send to the employees.

All of the above conditions need to be met in order for this to be legal.

The above is a risk for both sides: for the employee, forfeits his right to full severance pay, even when fired. On the other hand, the employer forfeits his right to reclaim severance pay from the fund in case of resignation.

The aforementioned permit from 1998  allows for retroactive enforcement provided it be in writing and within 3 months of starting the pension plan for the employee, no later.

So if your employer wakes up one day and decides that section 14 should apply to all employees – not so fast !

Employers who give Mandatory pension plan only – the law which came into effect starting Jan 2008 at lower rates than full pension plans are not eligible foe section 14 of the severance pay law.

 

 

New court verdict: resigning employee directed to reimburse company for training costs

Moshe

In a recent labor court ruling, an employee who had signed a contract for a commitment period of 12 months (minimum) and actually resigned after 4 months was instructed to reimburse the employer for the cost of training (prorated for the part of the commitment that wasn’t fulfilled – i.e. 8 months)

severance pay when an employee records serious disciplinary offences

Moshe

Severance pay when an employee records serious disciplinary offences

Submitted by Moshe on Wed, 28/04/2010 – 08:38

 

An employer may be exempt from paying out severance pay to a terminated employee, if the employee purposely acted in such a way as to cause his termination, by way of serious disceplinary offences. For example; An employee had been working for several years at his job and approached his employer, demanding to be fired,therefore making him eligible to receive severance pay, or so he thought. This based on the assumption that if he quit his job he would not be entitled to severance pay, where as if he were terminated the employer would need to pay severance pay.
The employer refused to fire the employee saying he was very happy with his work and he was due for a promotion, but if he so wished he could resign his position. The employee refused to resign, but started purposely doing acts that can only be described as “serious disciplinary offences”;showing up late, not completing tasks, or ignoring others, as well as frequent, unexcusable absences and basic indiferrence to his job, in hope of getting fired. The employer repremanded the employee both verbally and in writing and when this had no effect, summoned him to an internal hearing. As this also had no effect, the employer notified the employee of his decision to fire him.
The labor laws specifically state that in such cases the labor court can order a reduction or a complete cancellation of in severance pay !
This was the scenario in this case as the employer had no problem proving that the employee’s actions had been purposely done with the intent on causing the employer to fire him. Therefore it is the employee who acted towards ending the employer-employee relationship and is thus seen as resigning for all purposes and intents with regard to severance pay.

You are entitled to a hearing before termination

Moshe

If an employer decides to terminate an employee, he is required by law to grant the employee a hearing prior to terminating the employee.
While this may not change the employer’s mind about the termination, it does clear the air by allowing both sides to express themselves and lay everything on the table.

Employers in the public sector and large companies usually do this as standard procedure, while many private sector and small employers tend to ignore this basic issue which gives respect to employees as people.

Failure to grant a hearing to an employee prior to termination, may void the termination. Employees who were not given a hearing prior to termination are advised to file a complaint with the Ministry of Trade, Industry and Labor’s hotline 1-800-354-354 and seek damages for infringement of rights via Labor court.

How much advance notice are you entitled to when terminated ?

Moshe

When an employee is terminated from his/her position they are entitled by law to advance notice from the employer. The amount of advance notice is based on an employee’s tenure with the employer as well as his pay rate.

For employees being paid at an hourly or daily rate the employee is entitled to:

During the first year = 1 day for each month worked.
During the 2nd year = 14 days + 1 day for each two months worked.
During the 3rd year = 21 days + 1 day for each month worked.
From 4 years and on – one month’s notice.

For employees being paid at a monthly rate, the employee is entitled to:
During the first 6 months = 1 day for each month worked.
From the 7th month until the completion of 1 year = 6 days + 2 1/2 days for each month worked.
After completion of 1 year tenure = one month’s notice.

The Israeli Employee’s Rights Handbook

Moshe

Due to increasing request and popular demand, work has commenced on the new ‘Employee’s Rights in Israel Handbook” soon to be released.
The handbook is in English and explains, in easy to understand language, basic payroll and labor law issues that are relevant to anyone who works as a salaried employee or is an employer of employees. The handbook is a means for employees and employers alike to become familiar with employee rights according to the Israeli Labor laws and avoid unnecessary confrontations in the future.
The Handbook will be available through this site only – stay tuned !
Place your order for the the handbook today and receive a 10% discount on the price ! This offer is for a limited time only.

send an email to Moshe.israpay@gmail.com to reserve your copy today  !