rights

Tax break package for new immigrants and returning residents

Moshe

The main benefits for new immigrants and returning residents who became citizens since January 1st 2007 and onwards are as follows:

 10 years exemption from tax paying on foreign-source income (i.e., income derived outside of Israel).

 10 years exemption from declaring on foreign-source income which are exempted.

 10 years exclusion from definition as an Israeli company resident – for a company established abroad and owned by an “Oleh” or a “Senior Returning Resident”.

 Option to be considered a foreign resident for taxation purposes, for one year from arrival.

 3.5 years of entitlement to tax credit, with options of extension.

Who is entitled to the tax benefits?

 “Oleh” – New immigrant.

 “Senior Returning Resident” – Individuals who returned to Israel after they lived continuously outside of Israel, and returned to Israel not sooner than 10 years after having ceased to be a resident of Israel. Those individuals will be considered as “Oleh”.

 One-time measure – Individuals who returned to Israel during the years 2007– 2009 are considered as “Senior Returning Resident” even if lived continuously outside of Israel for at least 5 years (instead of 10 years).

Income entitled to tax benefits:

 Passive income – 10 year exemption on dividends, interest, rent, royalties and pensions generated by assets held overseas.

 Capital gain – 10 year exemption on capital gain from the alienation of assets located abroad. Extended to assets located abroad acquired after becoming Israeli resident.

 Business income – 10 year exemption on business income generated by assets held overseas.

 Vocational and labor income – 10 year exemption on salaries and income from activities of independent nature, generated abroad. Applies to business and occupation acquired or started before or after becoming an Israeli resident. Optional track for adapting: A one-year period of adjustment from the date of arrival in Israel is granted upon request, which enables the individual to choose not to be considered as an Israeli resident for tax purposes during this one-year period.
The request for the adjustment year must be submitted within 90 days from the date of arrival in Israel.

Foreign companies held and owned by “Olim” and Senior returning residents: A company established abroad and owned by an “Oleh” or a “Senior Returning Resident”, will not be considered as an Israeli company for taxation purposes for a period of 10 years, and thus will be exempt from taxes in Israel during this period on foreignsource income (i.e., income derived outside of Israel).

Tax credits: All Israeli residents are entitled to 2 credit points (reduction of NIS 436 per month from the tax liability), as well as 0.25 additional points for a working man and 0.75 points for a working woman, which are not taxed.

Working Olim (salaried employees- ME) are entitled to additional points on top of that, for a period of three and a half years following their Aliyah. This benefit may be extended whilst carrying out compulsory army service and whilst studying at university or college. Apply for this benefit by filling out the relevant sections of form 101 (filled out upon start of employment and at the beginning of every year through your employer) and attaching a photocopy of your teudat oleh to the 101 form. the extra tax credit points for olim are as follows:

 For the first 18 months – 4.5 additional credit points (reduction of NIS 654 per month or NIS 11,772 for the first 18 months)

 For the following 12 months – 2 additional credit points (reduction of NIS 436 per month or 5232 annually)

 For the following 12 months – 1 additional credit points (reduction of NIS 218 per month or NIS 2616 annually) Additional reductions are available for parents of young children, working mothers, discharged soldiers and many other reasons

The right to work sitting down

Moshe

The right to work sitting down

The “right to work sitting down” law (April 2007) specifies that anywhere that work can be done sitting down; the employer must supply employees with a place to sit. The law also mandates that employers must supply their employees with a place to sit during breaks. The law also specifies the type of seat the employer must provide;
The seat must:
a. Have a backrest for support.
b. It must be fit for use for the shape and size of the employee.
c. Must be suitable for the type of work being done by the employee
d. If the employee cannot rest his feet comfortably, the employer needs to supply a footrest, as well.

The employer is obligated to provide seating for employees who are on breaks, in sufficient amount for all and in good condition for use (to sit during breaks).

The law applies to actual employers as well as employers via manpower agencies by actual employers.

Violation of this law is subject to a penalty, awarded by the court, of up to 20,000 sh and in cases of severe violation up to 200,000 sh without a need to prove damages. Any suits regarding this law will be handled by the labor court, in a civil suit.

The right to sue an employer for violation of this law is given to the employee, a representing worker’s union that exists in the place of employment, or if such union doesn’t exist at the place of employment, a sectorial representing worker’s union or a worker’s union that the employee is a member of, or any entity that deals with employee’s rights, under the condition that the employee has given his consent.

The court may issue an order to the employer to correct the violation by a certain date.

Note: the above is not a translation of the law, nor is it a translation of the pamphlet published by the Ministry of Industry, Trade and Employment’s work relations department, but rather an explanation in the author’s own words.
The pamphlet is available in Hebrew, in PDF format, on the Ministry’s website:

Click to access sitting-at-work.pdf

The work relations department can be reached as follows:

Jerusalem 02-666-7922
Tel-Aviv 03-512-5393
Haifa 04-863-1055
Be’er Sheva 08-626-4750

Breast-feeding hours

Moshe

Q: What is Breast-feeding hours and whom is eligible ?

A: Breast-feeding hours is a special perk that is embedded in the Women’s employment law (1954). Any woman who gave birth is entitled to be absent from work for up to one hour, without deduction from her pay,for a period of up to 4 months from the end of maternity leave (currently 98 days from date she gave birth). This is regardless of whether she actually breast-feeds her baby or not. However, since a woman can take additional leave without pay immediately and in continuation of her maternity leave, she may lose this right as eligibility starts from the end of the maternity leave and does not include non-paid vacation.
In addition, there is no additional time allocated by the law if a woman had more than one baby in a birth, but the time of eligibility would start and end later, as she is entitled to a longer maternity leave. In this case she still gets 4 months.
Breast-feeding hours is a mandatory labor law in Israel in both public and private sectors.
The only criteria, aside from being within the 4 month period from the end of maternity leave is a full-time position.
If a woman works less than full time, she is not eligible at all.

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

Havra’a payment in several installments – at which rate are they paid ?

Moshe

David is a small employer. In order not to raise his monthly payroll costs but at the same time abide by the labor laws, he pays the annual Havra’a payment in 3 installments: in April, June and August. The first two payments were paid at the known rate at the time of payment (previous June’s rate) and the last payment in August employees received the updated new rate.

While employees would rather receive the full amount in one payment, it is the employer’s decision and yes, it is legal. There are some employers who divide the payment into 12 installments thus making their monthly payroll costs even more evened out.

This payment needs to be itemized separately on the payslip and the rate must be updated annually, on the 1st of July each year.

David’s employees signed a petition requesting a retroactive payment for all employees on the rate used to for the first two payments.

So, is David required to pay the difference in the rate for the first two installments to his employees in April and June when the new rate becomes known in July or on August’s installment ?

The answer is no. Since the payment is always according to the last known rate, the employer has fulfilled the wording of the general collective agreement.

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).

 

 

 

 

 

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.

 

Aug 25th – mini-seminar: understanding your payslip and employee’s rights

Moshe
This unique mini-seminar, in English, is meant for salaried employees who want to know how to read their payslip and understand it.
It is also geared towards employers who want to better understand their legal obligations regarding payslips and the implications of failing to do so.
Don’t miss out on this amazing opportunity to learn from a senior payroll professional with over 20 years experience in all facets of Israeli payroll and labor laws.
DATE: Sunday  August 25, 2013
Time: 09:30 – 11:30
Venue:  JBC
             24 Hillel st. 5th floor
             Jerusalem
Speaker: Moshe Egel-Tal, CSPP
               CEO & Founder ISRAPAY “making payroll simple”
Price: 120 sh
Limited space available – register today !
Don’t miss this great opportunity to learn how to read and understand your payslip
Send your name and contact info to moshe.israpay@gmail.com

Minimum wage update – April 2013

Moshe

Effective from April 2013’s payroll the minimum wages will be updated as follows:

Monthly rated employees

Apprentices 2,580.-
up to age 16 3,010.-
from age 16 to age 17 3,225.-
from age 17 to age 18 3,569.-
age 18 and up 4,300.-

Daily rated employees

  5 day work-week  6 day work-week
Apprentices

119.08

103.20
up to age 16

138.92

120.40
from age 16 to age  17

148.85

129.-
from age 17 to age 18

164.72

142.76
age 18 and up

198.46

172.-

Hourly rated employees

Apprentices 14.91
up to age 16 17.40
from age 16 to age 17 18.64
from age 17 to age 18 20.63
age 18 and up 23.12

These rates are mandatory for all employees in Israel, regardless of sector (public and private), industry, vocation or tenure.
Employers who pay less than the above minimum wages risks penalty (stiff fines and even imprisonment) and prosecution in Labor court, by the Ministry of Industry, Trade and Labor, as a criminal felony  for violation of Labor laws.

 

Working hours on Israel’s Memorial Day & Independence Day

Moshe

Memorial Day of Israel’s Fallen soldiers is Monday April 15th, 2013

According to the fallen soldiers law (1963), any employee who is one of the following:
*  parent
*  grandparent
*  spouse
* child
* sibling

of a fallen soldier, is eligible to be absent from work on this day without liability of deduction from pay.

 

Independence Day (Yom Ha’atzmaut)

Israel’s 65 birthday is Tuesday April 16th, 2013

According to the Independence Day law (1959), This is a paid national holiday. This applies to all employers in Israel.

The day prior to Independence Day (Memorial Day or Erev Yom Ha’atzmaut) is a shortened work day, by law.
Employees who work an 8 hour workday, need work only 7 hours.
Employees who work a 9 hour workday, need work only 8 hours.
Places of employment that have a collective or personal agreement, or custom which is more favorable to the employee than the law, these would take precedence.
There is no deduction for missing hours for this day.

To be paid for Independence Day, you need to have at least 3 month’s tenure with your employer and you need to work the day before and the day after Independence day.

Employers that are not included in the list of places that need to operate on a holiday which is published by the Prime Minister’s Office are not allowed to force their employees to work on Independence Day as publicized by the Israeli Labor Court.

Employees who work for an employer who is included in the list, are entitled to 200% for all hours worked from 24:00 (midnight) on Memorial Day until 24:00 on Independence Day.
Payment for Independence Day needs to be itemized separately on the payslip.

 

 

Employee’s Rights Lecture – Tel-Aviv – May 5th 2013

Moshe

Are you receiving all you should from your employer, by law ?

Is your payslip hard to understand/ decifer ?

What should you do if you’re not ?

And what are your rights ? What can you do about it (aside from quitting your job) ?

Come find out the answers to these questions and more…….

What: Employee’s Rights Lecture

 Date: Sunday, May 5th, 2013 at 18:30 

 Where: AACI Tel-Aviv  –  94/a Allenby Street 

       

Pre-registration required. There is a small fee to attend. Please contact to register:

 contact: Helen Har-Tal –    Tel: 03-6960389       Email: aacicentralregion@gmail.com