Labor Laws

This section covers labor laws, collective agreements and mandatory comprehensive ordanaces

Youth employee ? Download new application to know your rights !

Moshe

The Ministry of Industry, Trade and Labor has launched an application that can be downloaded for free to an Iphone and will soon be available for smartphones too. If you are between the ages of 14-18 and employed or if you have children or grandchildren who are, this is for them !

What will this enable users to do ?
1. Know your rights and the employer’s lawful responsibilities towards youth
they employ.

2. Enable youth to keep track of their hours in an organized manner.

3. Salary calculator to figure out what you are owed.

4. Contact details for complaints to the Ministry’s labor law enforcement dept.
if they feel their employer is not obeying the laws.

5. Enable users to define a goal to save for, and enable them to track how many
more hours of work they need to reach their goal.

 

For now this application is available only in Hebrew.

It is downloadable from the Ministry’s website, here:

http://www.moital.gov.il/NR/exeres/46273C9D-B2FF-4DB3-A4ED-8D80E5BAC62F,frameless.htm

Employee sexually discriminated against

Moshe

The municipality of Petah Tikva started a project for police patrol service via a security company. The service was to operate 24/7 via foot-patrol and motorized patrol.

Noa was invited to an interview and accepted to this position along with 16 others. She was the only female in the group. Noa was slotted in to do only the foot patrol on all her watches. She asked the person in charge of scheduling the shifts to put her on some motor-patrols as well, but was turned down, according to Noa “because people don’t want to see a woman driving a jeep…”

She was requested to pass an internal driving test to show she is capable of “navigating in the area” before she would even be considered for a motorized patrol, even though none of the other employees were required to do so.

Noa submitted a formal complaint to the labor court against her employer demanding 100,000 sh in damages pertaining to non-compliance with the equal opportunity in employment law, loss of income and tarnishing her good name and aggravation.

The labor court issued the following verdict:

The equal opportunity in employment law clearly states in section 2a that it is forbidden to discriminate due to sex, among other things, in accepting a candidate for employment, in training a candidate, in firing an employee, etc.
The law passes over the responsibility to the employer to prove their was no foul play and discrimination in his decision.

The court found that Noa wasn’t scheduled for motorized patrols simply because she is a woman. Also the fact that she was required to take extra tests as opposed to the men. Noa also submitted  taped conversations between herself and her employer to back her claims. The court ruled that this is indeed invalid discrimination and although no monetary damage was proved, the court still believed that this type of behavior needs to be curbed harshly and therefore fined the employer 55,000 shekels.

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.

 

 

Minimum wage update – Oct 1st 2012

Moshe

Great news for all salaried employees who earn minimum wages. After the govt. raised the v.a.t. and the latest price hikes in almost everything we buy, The minister of Industry, Trade and Labor, Shalom Simchon announced today that the minimum wages will be raised from October 1st, 2012. This is the last update according to the last labor agreement signed two years ago between the Histadrut Haklalit and the Israeli Government and the Industry Union. The last update of the minimum wage was in July 2008.

The new hourly rate will be 23.10 sh (prev. 22.04)

The new monthly rate will be 4,300 sh (prev. 4,100)  – a 4.9% increase.

This also effects the hourly rate for youth, as follows:

up to age 16 – 3,010 sh

up to age 17 – 3,225 sh

up to age 18 – 3,569  sh

 

This notification was issued early, prior to the Jewish new year (Rosh Hashana) and according to the Central Bureau of Statistics will effect about 600,000 employees in Israel.

 

 

Company officers and executives can be prosecuted !

Moshe

If you are a company executive or officer and your job entails employing workers  this post is for you,

It is your responsibility to be updated, to know and be familiar with the latest laws, regulations and court verdicts in this field.

You must control, oversee and issue directives in order to notify the company where you are employed that they are acting legally or not.

New regulations will be coming into effect on June 19th 2012 which call for closer control and inspection by the Ministry of Trade, Industry and Employment for violations of mandatory labor laws in Israel.

Violators will be prosecuted, including company officers or executives, personally ! This is a criminal offense and can be punished with administrative fines of up to 35,000 shekels for each offense or even jail time.

It is your duty to do everything in your power to make sure that the law is adhered to. Do not play around with employee’s rights, it is not worth the risk of the good name of your company.

The Ministry has allocated a special tab on the menu of their website where they will publish the names of all employers who have violated the law !

Potential employees who are searching for a job can check this site to see if the employer is listed – they might get an indication whether they want to work for such an employer or not.

 

 

 

 

 

Tightening of Enforcement of Labor laws

Moshe

Effective on June 19,2012 The Administration of Enforcement & Regulation in the Ministry of Trade, Industry and Labor will be stepping up their efforts to enforce labor laws by spot checking employers. Any discrepancy can lead to fines of thousands of shekels for each offense and for each employee. In addition, CEO’s will be held personally responsible for failure to implement the laws. The fine issued to a CEO cannot be paid for by or refunded by the company and in extreme cases can result in criminal charges and even possible jail sentence. The only way a CEO can legally fight the fines and charges in a court are if he has proof of existing policies and procedures and that he has done all in his power to enforce the labor laws.
For example, a company who hires a manpower agency to provide cleaning workers or guards, can be held responsible if the manpower agency doesn’t pay them minimum wage, overtime, allow them to sit or take a break, are tardy in paying. The company needs to check the manpower agency’s calculations and payslips to ensure they pertain to the labor laws.

All employees need to have time-sheets, they can be an actual swipe card electronic clock, a computerized program, via a cash register or an internet time-sheet. It must have start and end times for each day worked and be able to track absences and overtime. The only exception are employees who work outside, on the road, etc in which case the pay slip needs to say “hours not able to be tracked”

 

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.

 

Garnished Wages – updated

Moshe

As of Jan 1st, 2012 the amounts exempt from  garnished wages have been updated as follows:

single – 2,093 sh

widower/divorced/single parent + 1 child – 3,384 sh

widower/divorced/single parent + 2 or more children – 4,221 sh

couple – 3,139 sh

couple + 1 child – 3,641 sh

couple + 2 or more children – 4,143 sh

 

Notes:

1) The above amounts do not apply to garnished wages for alimony.

2) Should the above amounts be more than 80% of the monthly salary (after deductions for income tax and social security and health tax) the amount exempt shall be reduced to 80% of the actual monthly salary.

 

source: protection of salary law, 1958 update 2012

 

 

Recent Change in Law Exempts Non-Monetary Assistance from Court Fees

Moshe

If you submitted a lawsuit in an Israeli Regional Labor Court from February 1, 2009 onward and the court fee you paid included your request for non-monetary assistance (as defined in section 26A of the Protection of Salary Law), you are eligible for a rebate. Continue reading “Recent Change in Law Exempts Non-Monetary Assistance from Court Fees” →

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” →

Change in sick pay rates – April 2011

Moshe

Good news for employees who were forced to take time off work due to illness:

 

Update #4 – 2011 of the sick pay law, effective April 1, 2011 incurs a change in the rates paid:

1st day – no pay (no change)

2nd + 3rd days – 50% of regular pay (up from 37.5%)

4th day onwards – 100% of regular pay (up from 75%)

 

In addition, employees who work a 5 day week – 21 2/3 days will be considered a full month (entitling employee to 1.5 sick days credit). If an employee did not work a full month the  credit will be prorated accordingly. (This is a change from previously 25 days = a full month)

 

Notes:

  • The employee can request a doctor’s note for any illness.
  • The sick days need to be continuous, otherwise the count starts anew.
  • There is no buyout or redemption of unused sick days by law. This is accepted practice only in the public sector.
  • Sick day accrual, credit and debit as well as opening and closing balances for the pay period need to be itemized on the payslip.