Employment

In this section you’ll find tips regarding employment and employer/employee relations. To keep up-to-date please subscribe to this blog using the SUBSCRIBE link in the sidebar.

Employer ! This one is for you

Moshe

If you employ workers in Israel, regardless of the size of your business, how many people you employ or even the nature of your business or it’s location, you need to read this blog post. It can literally save you legal hassle, fines and in extreme cases imprisonment ! (that’s right – imprisonment, you read correctly)

In attempt to enforce labor laws in more efficient fashion, the government passed several laws in recent years, the latest of which, will go into effect on June 19, 2012 and deals with severe repercussions against employers who are found to be in violation of these laws. This due to the fact that up until the law was passed, any violations by an employer required the affected employee to suit in labor court. This was a lengthy process that lasted years and was not effective in deterring employers. The government in it’s search for quicker punishment and stricter enforcement used a series of new laws. These laws give the Ministry of Industry, Trade and Labor the power to do surprise spot checks on employers, requesting to see documents, such as payslips, time-sheets, contracts and more. The enforcement of regulation is handled by a new department setup specially for this purpose. These laws cannot be waived by an employee and a contract that denies them or diminishes them is invalid and not legal.

To start with, the laws that are being investigated by the investigators are:

  1.  Work and rest hours law

    There must be 8 hours break between work days and 36 hours between the last day of work in a week and the first day of work in the new week. Overtime must be paid for overtime hours worked – unless the employee was notified that there is no paid overtime, unless the employee receives prior written consent. Less than 8 hours between work days, the hours worked are all considered part of the previous day (overtime hours).

If there is no time-clock and an employee claims he worked overtime, it is the employer needs to be able to prove otherwise and refute the claim. If he can’t prove that the employee didn’t work the hours, (for example by producing the employee’s time-sheet) he will have a serious problem. If an automated computerized system does not exist, both the employee and employer need to sign the time-sheet each and every day !

 2.  Minimum wage law

   Base pay of at least 22.04 sh per hour (gross) or 4,100 sh per month (gross) – this obviously does not include travel expenses or other mandatory payments.

3. Mandatory pension law

For all employees after 6 months of tenure or immediately if the employee has an existing plan that is live (deposits were made in the last 3 months prior to start date with present employer. This needs to be itemized on the pay slip according to the % in effect, employee and employer portions as well as severance pay portion (employer).

4. Woman’s employment law

5. Youth employment law

6. Protection of wages law

Criminal offences are specified in section 25 b, including not issuing a payslip on time, issuing payslips that do not include all mandatory information, deduction of sums from an employee’s pay not in accordance with the wording of the law, not paying salaries on time, deduction of sums from an employee’s pay and not transferring them to the appropriate party to whom they are meant on time (social benefits, etc)

7.  Dealings with employment agencies
First of all, all employers who use employment agencies or third party companies (outsourcing) must ensure that they have a valid license to operate in Israel from the Ministry of Industry, Trade and Labor. Contracting a company who is not licensed is a criminal offense.

Secondly, the responsibility to ensure that the employees they employ on your premises receive minimum wage, payslips, overtime, etc is now your responsibility ! Any clause in a contract between an employer and an employment agency that stipulates the responsibility is the employment agency’s alone and that the employer has no responsibility or dealings with this – are rendered illegal and not valid – even if the contract was signed prior to the new law going into effect. What does this mean ? Well, basically, employers who employ workers via employment agencies (guards, cleaning staff for example) now need to reconstruct their contracts with the employment agency to include a clause that they can request at any given time, any document that will prove that the labor laws are being complied with for the employees they employ at the employer’s location(s). This means that your payroll controller needs to check the employment agency’s time-sheets and payslips periodically. Any infraction of the labor laws by the employment agency, the employer needs to send a letter of notification of the infractions and demanding rectification immediately or this will considered a breach of contract which will result in termination of the contract.

The idea behind this is simply that the place of employment cannot close it’s eyes and say that they are not responsible because they aren’t their employees. the employer hired the employment agency, so now he is responsible for this too. The consequences could be a fine for both the employment agency and the actual place of employment who hired them.

If you have questions about working with employment agencies, contact the Ministry of Industry, Trade and Labor – 03-7347425 (Efrat Gur) or  Hasdara-k@moital.gov.il

8. Foreign workers law

The Ministry of Industry, Trade and Labor published a foreign workers rights handbook on their site – You can read it in English here:

http://www.moit.gov.il/NR/exeres/C95B7D30-1105-47C7-85D8-17B26C284C31.htm

What happens if Moital’s regulation dept. finds flaws in any of the subjects ?

They can issue fines from 2.5k-35k for each misdemeanor for each employee, they can start legal prosecution of the employer and the CEO (or holder of position as it’s defined in the law) can be held personally responsible and be fined as well. The employer is not allowed to pick up the tab for the CEO (it is not a recognized expense) and it is forbidden to purchase insurance against this sanction. For many small businesses /employers this can be a serious threat to their existence – do not take chances !

To wrap this up, my advice to employers is simple:

1. Issue written notification to all employees on their terms upon start of employment and upon any change of their terms, including termination. Employer’s who have written contracts with employees should continue to do so in addition to this notification.

Example copies of these forms as well as what information needs to be included in them can be found on The Ministry of Industry, Trade and Labor’s website: http://www.moit.gov.il

2. If you do not have one, purchase a computerized time-sheet program (preferably one that is compatible with your payroll program) and inform all employees that clocking in and out is mandatory.

3. Make sure your employee’s payslips have a detailed breakdown of their vacation and sick day balances.

4. Make sure you are paying according to law and all payments are itemized separately on the employee’s payslips.

5. Company policy on various employment issues should be made public (sent out to all employees via email for example)

6. Make sure all employees  receive a hard-copy payslip each month.

Remember !
Not knowing the law is not a valid excuse and doing things properly will ensure you have no issues with the Ministry of Industry, Trade and Labor’s regulation department. Don’t say you weren’t warned.

Employers interested in consultation on implementation of issues contained in this blog, including determining a suitable time-sheet system or other payroll, labor law issues are welcome to contact me at: moshe.israpay@gmail.com

We are here to assist you in doing your job according to the 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)

New !!! tax reconciliations on-line !

Moshe

It seems that the Israel Tax Authority is trying to keep up with technology.

As from the year 2012, employees who are employed simultaneously by at least two and up to six employers with a total income of no more than 188,544 shekels (gross) can file their request for a tax reconciliation (teum mas) via the internet. (This is instead of filling out a 166 tax form, going in to your local tax office and waiting in line while losing valuable work hours)

You are able to print out a copy of what you reported for your records and the Tax Authority will send the employee, to the address you specify, the required letters for each of the employers with instructions on how to deal with the tax from what each of them are paying via payroll. This is usually done within a few work days and can save you the trouble of going in each year to renew the letters for your employers.

Note: You can only file online one time during the tax year. If there are any changes you will need to go personally to your local tax office to update the letters for the employers.

They have a simulator for taxes without a need to submit the information.

The taxes are not final, pending filing year end taxes for all the employee’s earnings. This is done by the employers, employees are exempt from this unless they have income other than salary. In any case, to check whether you are required to file taxes it is advisable to consult an Israeli certified CPA or Tax advisor.

You need to be very careful to correctly fill out all the information requested, as any mistake will result in wrong output. Before you attempt to do this make sure you have the last payslip from all employers on hand. The payslip has the employer’s name, address and tax ID number as he is registered with the Tax Authority.

You will first need to download and install a Toolbar for Government forms and you need to be using  Internet Explorer (versions 6,7,8,9) or Firefox (versions 3-11) and either Windows or Linux OS

http://forms.gov.il/forms/Resources/DowloadSetup/AGFormsDownloadToolbarEnglish.htm

Calculating Vacation & Havra’a

Moshe

This article was published at the Voleh blog.

Havra’a is a mandatory payment by law. It is paid annually to all employees who have at least one year’s tenure with their current employer. There are several rates (for private and public sector) and they are updated each year in June. Continue reading “Calculating Vacation & Havra’a” →

2011 Convalescence Pay (Dmei Havra’a) Rates

Moshe

Effective June 2011 the following rates are in effect for Havra’a pay:

Private sector = 365 shekels per day
Public sector = 411 shekels per day

The number of days an employee is entitled to with regard to Dmei Havra’a is according to their tenure with the current employer, provided they have completed at least one full year of tenure. Continue reading “2011 Convalescence Pay (Dmei Havra’a) Rates” →

Youth Employment – Update April 2011

Moshe

As of April 2011 the minimum wage was raised and as a result the youth wages were adjusted accordingly.

Just in time for the summer vacation ! Make sure your teenage kids who found a summer-time job are paid according to the law. The new minimum wages for youth are as follows: Continue reading “Youth Employment – Update April 2011” →

Youth Employment 2011

Moshe

This article was published at the Almost Eden blog.

Just in time for the summer vacation! Make sure your teenage kids who found a summer-time job are paid according to the law. Effective July 2011, the new minimum wages for youth are as follows:

apprentices = 14.22 shekels per hour
up to age 16 = 16.59 shekels per hour
up to age 17 = 17.77 shekels per hour
up to age 18 = 19.67 shekels per hour
from age 18 and up = 22.04 shekels per hour

There are special regulations in effect for employing youth: Continue reading “Youth Employment 2011” →

Public Sector Employment Labor Law Section 12A

Moshe

There is a trend among employers, especially in Public sector jobs where there is a mandatory tender for every position. This lengthy bureaucratic process can take months. Especially if the employer hasn’t put the proposed position into the annual budget. Continue reading “Public Sector Employment Labor Law Section 12A” →

Are you familiar with section 12 A of the labor law ?

Moshe

Are you familiar with section 12 A of the labor law ?

Submitted by Moshe on Tue, 08/03/2011 – 10:26

There is a trend among employers, especially in Public sector jobs where there is a mandatory tender for every position. This lengthy beaurocratic process can take months. Especially if the employer hasn’t put the proposed position into the annual budget.

In years past, there were employees who worked for years via employment agencies in the same place of work. Sometimes these employees would be transfered from one agency to another, thus losing valuable tenure.

The “Employment of employees via employment agencies” law which was passed by the knesset in 1996 helped rectify this situation somewhat.

The law specifies explicitly that an employee can be employed via an employment agency for a maximum period of 9 months. After this period, The employer either hires the employee directly or ends his employment. Extending the 9 month period is no longer an option, nor is transfering the employee to another employment agency.

The 9 month period is a mutual period of trial where both the employer and the employee check each other out and decide whether they want to continue employment with each other.

If the employer was negligent and didn’t notify the employee of his intentions on time, The law specifies that “an employee who worked for more than 9 months via an employment agency will then automatically be considered the actual employer’s employee”.

The tenure that an employee worked for an employer via the employment agency is recognized as tenure for all purposes with the employer, as the place of employment hasn’t changed.

The employment agency must conduct a hearing with the employee as to intent of continuation of employment directly via the employer or release of the employee. This needs to be done within the 9 month period and also subject to the advance notice law.

Warning Signs – Employers You Don’t Want to Work For

Moshe

There are many indications that one can detect if they are aware of them, even in job interviews (!), that will indicate a “bad” boss or mildy put “an employer you do not want to work for. This is especially true in Israel, where some employers just blatantly disregard labor laws. However, things are improving in this area in the last decade since Government enforcement has become more involved. they act on anonymous tips and after investigation submit suits in labor law, which heavily fine employers for recurring infractions of the law. Continue reading “Warning Signs – Employers You Don’t Want to Work For” →