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.

Night Shift Work

Moshe

“Night shift” is specifically defined in the “work and rest hours” labor law (1951): “Any work day of which at least two hours are between 22:00 and 06:00 shall be considered night shift.”

Note: It is enough that a minimum of two hours of the work day/shift are between these hours for the employee to receive all the rights regarding night shift, for all of the hours worked in continuity with the two hours (the two hours can be at the beginning, end or middle of the work day. Continue reading “Night Shift Work” →

Tax Reduction for University Graduates

Moshe

If you completed higher education or vocational training at a recognized university or college in Israel from 2005 and onwards, you may be eligible for a reduction in taxes. You need to fill out a 119 tax form and attach a photocopy of the degree / certificate as well as a letter from the academic institution, which specifies your name and Israeli ID # and the date upon which you are eligible for the degree and the number of years you studied. You also need to check the appropriate box on the reverse side of your annual 101 tax form and attach the 119 form and photocopies listed above to be handed in to your employer (payroll or HR) Continue reading “Tax Reduction for University Graduates” →

Order and enforcement of labor laws

Moshe

Order and enforcement of labor laws

Submitted by Moshe on Tue, 23/11/2010 – 00:12

 

The Administration of order and enforcement of labor laws takes a lot of action in implementing the directives of the labor laws in the State of Israel. The Labor laws, whom the administration has been trusted with enforcing, are defined as protective laws, that make up the legal infrastructure of the Israeli employment market. the purpose of these laws is to set a minimum Raff and to determine basic social rights for employees. These rights are expressed in setting employment terms for employees, that come to ensure a person’s honor, his ability to self fulfillment, equality, division of justice and more. A good portion of these laws have considerable financial significance and they increase the minimum wage to be paid to an employee, with aim to ensure a relatively appropriate standard of living in exchange for his work.

The Administration, as both the professional and authorized agent, coordinates under it’s auspices the enforcement of 19 labor laws, and locating violators and minimizing the detrimental treatment of salaried employees in the lower pay scales.

Goals:
1) Implementation of labor laws via efficient and effective mechanisms of
licensing and enforcement.
2) Creating and establishing practical basis for cooperation with internal and
external enforcement partners.
3) Intensifying both employer and employee awareness to directives of labor
laws within the administration’s responsibility.

The administration’s actions, both criminal and administrative are accompanied, guided and handled by the legal bureau of the Ministry of Industry, Trade & Labor.

Please note that while all complaints are followed through, a complaint may not necessarily solve your own personal issue with the employer and further action by you may be needed.

The administration can be contacted as follows:

Voicemail for complaints: 1-800-354-354 (can be done anonymously)
Tel: 03-622-3116
Fax: 03-682-8690
Email: achifa-ma@moital.gov.il

The administration of order and enforcement of labor laws
Derech Salameh 53
Tel-Aviv

Collective agreements and how they affect you

Moshe

Collective agreements and how they effect you

Submitted by Moshe on Tue, 09/11/2010 – 21:40

Most of the terms of employment are set not by law, rather by collective negotiating, thereby determining that the collective agreement is the basis for employee’s rights and duties.

The arrangements in collective agreements can be best characterized by the fact that they are not uniform. In each collective agreement one can find a different arrangement which is the fruit of collective bargaining. From the non uniformity of rights in collective agreements one can learn that not only are the span of rights different , but there are large groups of employees who do not share the same rights.

So, what is a collective agreement ?
They can be effectively divided into 2 types:
1) General Collective agreements
These are reached & signed by organizations that represent factoriesemployers in a certain field (such as: construction, textiles, diamonds, hotels, electronics, etc.) or in all fields (cost of living increase, travel expenses, Havra’a payment) and the liason office of general organizations and the worker’s union (histadrut) that represents the employees in a certain field or sector as well as the government (usually the Finance ministry).
2) Special Collective agreements
These apply to a certain employer and are signed by both the management of the employer and the worker’s union that represents the employees of that employer.

Some collective agreements get issued as a expanded regulations order by the minister of Labor, thereby becoming mandatory for every employer in the State of Israel.
A few examples of this are: travel
reimbursement to and from work, cost of living increase.

When a collective agreement is signed it binds all employees and an employee cannot say that he disagrees and didn’t approve it. That is why there are worker’s unions.

Not always does a collective agreement define the terms of employment. Frequently Small or private employers or where personal contracts are used, the contracts define the terms of employment, However, it should be noted that the personal contract cannot diminish or contradict the rights defined by law or by an expanded regulation order or collective agreement that may apply to the employer due to the field in which he operates. In short, the personal agreement cannot violate the labor laws of the State of Israel or the expanded regulation orders of collective agreements which are treated as labor laws. The personal agreements can however improve the terms in the law or collective agreement.

Even if a personal contract specifies explicitly terms that diminish the terms/rights defined by law, it becomes null and void, even if an employee signs it.

In small places of employment, it was customary to have work agreements based on verbal agreements, which would be always hard to prove. In such cases the law provides the minimum.

Since Jan 2008, when the section 24 of the protection of wages law came into effect, making mandatory written notification to all employees describing their terms of employment and specifying what needs to be written on this notification, verbal contracts have no place anymore.

see my blog post on correction 24:

and the blog post on “what needs to be included on my payslip” :

Everything you wanted to know about Havra’a payment

Moshe

 

Everything you wanted to know about Havra’a payment

Submitted by Moshe on Mon, 30/08/2010 – 23:51

 

What is Havra’a payment ?
Havra’a payment (or convalescence pay) is an annual, mandatory payment effecting all employers in the state of Israel via an expanded regulation order signed by the Minister of Labor. This means it is treated as a law.
Havra’a pay is paid to all employees who have at least one year of tenure with the employer.
Those who don’t are not eligible, but the following year are eligible to receive Havra’a payment for the full year plus the portion of the first year.
The payment is a number of days (see table below) multiplied by the rate (currently 351 shekels), which is updated every June. Employees who work less than full-time positions, it is prorated according to your % of position actually worked (including sick days, vacation, reserve duty and maternity leave).
There are two rates, one for the private sector and another, higher rate for the public sector. There are also separate tables of days of Havra’a eligibility for Histadrut employees, municipal employees and teachers.

Since most of the users of this site are employed in the private sector I have chosen to relate to this only.

Tenure with employer                       Number of Havra’a days
1 year                                                                     5
2-3 years                                                                   6
4 -10 years                                                               7
11-15 years                                                                8
16-19 years                                                                9
20 years and  upwards                                         10

 

Example: an employee who has been employed with the employer for 4 years in the private sector would receive as follows:

7 days * 351 sh = 2,451 sh (gross)

Note: There are employers who prefer to pay Havra’a on a monthly basis instead of a one-time annual payment. This is legal and the result would be an additional payment on each payslip of 1/12 of the Havra’a payment. Of course the amount needs to be updated annually (usually in June or July payroll).

Penalty for tardy payment of payroll

Moshe

 

Penalty for tardy payment of payroll

Submitted by Moshe on Mon, 23/08/2010 – 20:44

The protection of salary law specifies that salaried employees must be paid by the last day in the period of time for which they are being paid (i.e. the last day of the month), however salary will only be considered to be have been paid late if 10 days have passed since the due date. In plain English, this means it cannot be enforced until the 10th of the following month, thereby creating the myth that salaries can be paid by the 9th of the month.
But what actually is the penalty for late payment ?
The law specifies that for the 1st week of tardy payment the employer is penalized 5% of the amount that hasn’t been paid and from the second week onwards, for each additional week (or part thereof) an additional 10%.
The same applies for monies that were deducted from the employee’s pay but not transferred by the employer to it’s rightful destination on time; For example pension plan savings.
Labor courts tend to be lenient on penalizing employers when the employer claims that it wasn’t purposely done or for reasons that weren’t in his control.
There are things that can be done, like filing an anonymous complaint with the Ministry of Trade, Commerce and Labor’s hotline (see essential phone numbers in the menu bar on this site)
Late payment of payroll on a recurring basis is usually a just means for resigning your position and retaining rights to severance pay if you have worked at least 1 year with the employer.

Old Age Stipend – Social Security (Bituach Leumi)

Moshe

Old Age Stipend – Social Security (Bituach Leumi)

Submitted by Moshe on Mon, 26/07/2010 – 09:23

 

In response to many recent questions, following is a short and very general explanation.

A detailed and thorough explanation is available in English on Bituach Leumi’s website:
http://www.btl.gov.il/English%20Homepage/Benefits/Old%20Age%20Insurance/…

In general, there are mnay conditions based on age, sex, marital status, for olim – their age when they made aliyah as well as total gross income.
The old age stipend is one of the most important branches of insurance in the social insurance system in Israel and is part of the social benefits detailed in the Social Security Law (Bituach Leumi).
It’s purpose is to ensure a monthly income to Israeli Residents who are eligible in their retirement years.

The old age stipend, as defined by the Social Security Law, makes eligible Israeli residents who have reached the eligible age, provided they have been insured at least the minimum time as defined by the law and the insurance money has been paid for them.
There are two ages defined by law: retirement age and entitlement age.

In instances where an employee goes on early retirement (before old age) they may be eligible, depending on their total gross income (excluding pension payments).
When a person reaches the old age defined by law, they are eligible regardless of their gross income provided they meet the other criteria.

Both the retirement age and entitlement age are defined specifically by the Social Security Law, and they are different for men and women. Up until June 30, 2004 retirement age was 65 for men and 60 for women. Begining July 1, 2004, the law redifined the retirement age for men to 67 and 64 for women.
Because of this change in the law, Men who were born between 7/1939 and 4/1942 and women who were born between 7/1944 and 4/1953, the age is gradual. (see the chart on Social Securty’s site)

The site is very informative and also has instructions as to how to file and what documents are needed.

The Israeli Pay Slip: An in-depth explanation for the perplexed

Moshe

This article was published in the Job Search in Israel blog

Perplexed

For those of you that are working in Israel, or have worked in the past, trying to decipher your pay slip is one of the most complicated things you will experience in the workplace, right up there with understanding how to use the coffee machine. We are fortunate to have Moshe Egal-Tal available to provide us with a comprehensive article about the intricacies of the pay slip, so that you can better determine how you are being compensated, and confirm that there are no mistakes. Continue reading “The Israeli Pay Slip: An in-depth explanation for the perplexed” →

Information on correct employment of youth

Moshe

Information on correct employment of youth

Submitted by Moshe on Tue, 29/06/2010 – 13:04

 

As summer vacation approaches, it is time once again to refresh everyone’s memory as to the laws regarding youth employment.

AGE OF EMPLOYMENT

It is strictly forbidden to employ youth under age 14.
Youths between the ages of 14 – 15 can be employed in light work only. Light work is defined as work that will not hinder or impair their health or development.
During the school year and in certain dangerous jobs, it is permitted to employ youth only from age 15 and up, under condition that the mandatory learning law does not apply to them.
(examples of dangerous jobs: heavy cutting machines, manufacturing and processing of flammable substances or items, work at temperatures below 4 c or above 40 c.
As for youth employed in commercials, preformances, etc. a special permit is needed from the Ministry of Industry, Trade and Employment, Other special regulations as to employment conditions and hours apply.

WORK NOTEBOOK & MEDICAL APPROVAL

The law mandates the employer to demand from youth employees (under age 18) to produce a work notebook, as a prior condition of employment.
This notebook is issued by the local employment services office. In order to procure a work notebook, applicants need to show up in person with their Israeli I.D. card (or one of their parent’s I.D. card where they are listed), a doctor’s note from the family practitioner, that they are healthy and able to work, 2 passport pictures. There is no fee to procure the work notebook and it is issued on the spot.
The work notebook needs to be on premises at the place of employment.

NOTIFICATION LAW

The purpose of this law is to make clear the conditions and terms of employment, rights and obligations of the employee.
Each youth must receive a written notification. signed by the employer, within 7 days of start of employment and it must include all of the following:
the ID number of the employee, employee’s name, address, start date and length of employment, work hours, job description, houly rate and all benefits and payments (i.e. travel expense), name and job description of the employee’s direct superior adn any other information which can help the youth understand his job and what is expected of him.

WORK HOURS

Youths can be employed for up to 8 hours maximum per day and no more than 40 hours per week.
Youths aged 16 and above can be employed for up to a maximum of 9 hours per day, as long as the maximum of 40 hours per week is complied with.
The above does not apply to youths that are employed and who are covered by preferential terms of employment or a collective agreement and also handicaped youth (physical, mental) who are employed in protected factories (factories that the State of Israel participates in their financing).

OVERTIME employment of youths in overtime is completely forbidden by law !

Weekly day of rest

It is forbidden to employ youths during their weekly day of rest (Shabbat) and there is no possibility of receiving a permit for this.

Breaks

After 6 hours of work, it is mandatory to allow youth a 45 minute break for rest and to eat, at least 30 minutes must be consecutive.
The break is usually on the employee’s time (i.e. unpaid) but this should be agreed apon before employment commences in order to avoid future misunderstandings.

NIGHT WORK

The law states that between the hours of 20:00 and 08:00 A.M., it is forbidden to employ youths under age 16.
Employment of youths, between ages 16 – 18 is forbidden between the hours 22:00 and 06:00 A.M. unless a special permit has been granted
from the Ministry of Industry, Trade and Employment.

RECORDING WORK HOURS

All employers are required by law to keep track and record the exact hours of work of all youth employees, and if such is done manually, each youth who is employed, and the employer need to authorize their hours by signing off on them daily.

ANNUAL VACATION

For the first four years at the place of employment a youth is entitled to 18 calander days (14 actual work days) of vacation time per year.

TRAVEL EXPENSES

In addition to pay, youth are entitled by law to re-imbersement for travel expenses from their home to work and back. The maximum rate per day for travel expense is 23.70 shekels. The employer is obligated to ensure that the youth employees have means to return safely home after work. youth who work 18 days or more, are usually paid the rate of a monthly free bus pass (chofshi chodshi). Those who work less than 18 days would be paid per day at the rate of cost (up to the max 23.70 sh)

FINES & DEDUCTIONS

It is illegal to fine or punish youth by means of salary deductions, unless specifically permitted by law. This includes any dedections for “damages”.

TAXES AND SOCIAL SECURITY

A youth’s income is taxable, just as a regular (over age 18) employee.
The only difference is that youth between 16-18 are eligible to receive an extra tax point each month. Male youth (16-18) receive 3.25 tax credit points, while female youth (16-18) receive 3.75 tax credit points. Each tax credit point is worth 205 shekels (as of Jan 2010).
Working youth are exempt from payments towards social security (bituach leumi) and health insurance (bituach briut), however the employer is obligated by law to pay the employer’s portion of social security as follows: (as of Jan 2010) 0.38% of the total gross pay – up to 4,809 shekels and 0.61% of every additional shekel up to 79,750 shekels.

MINIMUM WAGES FOR YOUTH (in Israeli Shekels) – updated June 2010

Age—— Monthly salary **—– Hourly Rate
——————————————————–
up to age 16 —– 2,695.13 —— 15.58
up to age 17 —– 2,887.63 —— 16.69
up to age 18 —– 3,195.65 —— 18.47
apprentices * —– 2,310.11 —— 13.35

* apprentices are in accordance with the apprenticeship law only)
** The monthly salary is for full-time position – no more than 40 weekly hours or 173 monthly hours. Partial positions are configured accordingly.

Even if a youth agrees to work for less than the amounts in the table above, it is illegal and the employer cannot pay less than the minimum.

IMPORTANT NOTE: There is no such thing as a “trial period” or “training” where the youth employee would not be paid !
Every period of employment carries mandatory payment for work from the first hour of work. Payment is mandatory for training, explanatory meetings, etc. such as pre-work meetings for summer camps.

On-line filing of taxes

Moshe

All about on-line filing of taxes in Israel

Submitted by Moshe on Sun, 27/06/2010 – 16:29

 

 

As part of correction 161 to the tax ordinations, anyone who is required to file an annual tax report (form 1301) is now required to file on-line.

This is to be done in one of two ways:
1) transmition via the tax authority’s computer (sha’am) thru tax representatives (CPA, Tax Advisor or Lawyer) that are connected to the sha’am computer.
2) transmition via the internet

this change is effective immediately and includes tax reports for 2009

On June 16, 2010 the knesset finance committee authorised the tax regulations which enable exemptions from filing on-line for individuals whose income does not exceed 75,000 shekels annually.
Married couples 150,000 sh (75,000 each) as well as for individuals that they and their spouse have reached retirement age (65).
This does not apply to individuals or their spouses who are controlling owners of companies as they are defined by the tax regulations.
This new regulation will also not apply to those who filed to receive the negative tax stipend.

It should be noted that the above exemptions are only applicable for the on-line report but do not exempt from filing an annual report as per the tax regulations.

To find out if you need to file contact a certified tax representative (CPA or tax advisor).

continuation of pension plan by a new employer

Moshe

Continuation of pension plan by a new employer

Submitted by Moshe on Thu, 29/04/2010 – 15:13

 

An employee who starts a new job and has an active pension plan from a previous employer, can demand immediate deductions from his payroll from his start date, along with employer’s contribution according to the law.
In order to procure this the employee needs to present the new employer with a detailed printout of the existing accounts’ deposits.

This is highly recommended, rather than waiting several months until the employer starts deducting towards a new plan.This is highly recommended, rather than waiting several months until the employer starts deducting towards a new plan.

However, some employers will only do this after you have tenure of three months in order to ensure that employees stay on. If the tax year ends prior to your three month tenure date, it is required for the employer to forgo the 3 month waiting period because the pension funds do not allow retroactive deposits for previous years due to new regulations.

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.