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Employment Law in Israel

Published on : 14 Aug 2021

FAQ - Labour Law in Israel


Israeli labour law extends to all Israeli or foreign workers consisting of a series of cogent legislative legislation, regulations and jurisprudence. Foreign staff are non-Israeli employees in Israel who work under a legal visa for work. Furthermore, there are common and particular collective arrangements and extension directives for any or some segments of the labour market. The fact that an employee is not entitled to suspend any minimum rights under Israel's legislation should be recognized.

There are a variety of sources governing employment relations in Israel: fundamental rights, as established in the aforementioned basic laws; statutory rights, as provided for within legislation and regulations; contractual arrangements and extension agreements; and individual labour contracts. labour relations are governed by many different sources. The National Labor Court (NLC), which is the primary judicial body creating labour and social security legislation, interprets these legal sources. The government and the courts are used as rules, even if not binding, international norms, especially ILO conventions accepted by Israel, but also EU standards.

Q1. What are the main statutes and regulations relating to employment?

Israeli labour legislation provides for minimum mandatory requirements, which cannot be waived by employees.

These laws include:

  • Minimum Wage Law, setting down the minimum wage and is revised daily;
  • Wage Protection Law governs the timing and procedures of paying and allowing deduction of the wage/salary and the provision of fines for the infringement;
  • Hours of Work and Rest Law, regulating working hours, additional hours of night work and rest days of workers as well as wages per each working group.
  • Annual Leave Law  lays down the annual minimum leave quotas and usually governs vacations;
  • Sick Pay Law, which lays out minimum sick leave-pay provisions.
  • Severance Pay Law, which lays down the allowance and calculation of the severance pay;
  • Advance Notice for Dismissal and Resignation Law, which lays down the minimum notification requirements for employer or employee before termination.

Generally applicable extension orders include four additional compulsory benefits which workers cannot waive:

  • Refund of charges for travel to and from the workplace;
  • National holidays;
  • Pay for recovery;
  • Pension plan.

Q2. Does employee/contractor classification have clear rules?

The main relevant rules cover the following considerations: whether the employee’s function is an integral and regular part of the employer’s business; the extent of control over the employee; whether the employee has his or her own business, takes economic risks, hires employees or maintains a list of clients; the extent of the employee’s financial dependence on the employer; who supplies the means to work (ie, whether the employer or the employee supplies the equipment, vehicles, materials and tools); the place of work (ie, whether work takes place at the premises of the employee or the employer); the length of employment; the method of payment; the method of payment of taxes by the employee; and whether the parties believe that they are entering into an employer-employee relationship and how this is presented to third parties. 

The most important laws address the following considerations: if the work of the employee is an integral part of the business of the employer;

  • The scope of employee management.
  • If the employee's have their own business.
  • Takes financial risks, recruits or keeps the customer list.
  • The level of the employee's reliance on the company for financial reasons.
  • Who provides the means for working such as the machinery, vehicles, material and resources supplied by the employer or the employee.
  • The example workplace, whether the job is done at the employee's or the employer's premises.
  • The duration of the work.
  • The payment process.
  • The process of paying the employee's taxes, and whether or not the partners feel they enter into an employer/employee agreement and how it is sent to third parties.

Q3. Must there be a written employment contract?

Israel's legislation generally does not contain a written labour contract and an oral arrangement is legally binding. However, the Notice to the Employee (Terms of Employment) Act forces the employer to notify each employee of the employee's principal terms and conditions of employment in a stipulated manner.

The Foreign Employee Law also mandates that a contract of work of a foreign employee be in writing, in a language familiar to the employee, with precise terms and conditions.

Q4. Are any conditions implicit in employment contracts?

In all arrangements and contractual provisions, all legislative and obligatory incentives are implied. An employment contract may also include the terms of any other collective bargaining arrangement or extension order.

Q5. Is it compulsory to implement settlements on arbitration/dispute resolution?

In collective bargaining arrangements, arbitration and conflict resolution procedures are common.  However, in personal work arrangements, it is not normal and compulsory job rights and compensation cannot be covered by arbitration. Exclusively only contractual benefits can be covered by arbitration.

Q6. How can workers amend current contracts of employment?

Any changes to the working terms must be communicated to the employee by written notice. Any modification is subject to the consent of the employee.

Q7. What are the rules for employing foreign workers?

All rights and privileges granted to workers under Israeli labour law are entitled to foreign workers in the territory of Israel; moreover, they are entitled to specific benefits according to laws governing foreign workers, e.g. written jobs, medical care and lodging.

In the context of background checks and investigations, what should employers do;

Q8. About criminal records?

Criminal background checks are prohibited, as expected by law-specified government enforcement agencies. Employers delivering care for children and persons with disabilities or psychological disabilities would ask all male applicants to affirm that they have not been accused of sexual crimes.

Q9. About Credit checks?

Credit checks in Israel are unusual and have only recently been adopted. There is no case law available.

Q10. What is the minimum wage?

Under the Minimum Wage Law, the statutory minimum wage in Israel is NIS 5,300. In 2015 it rose from NIS 4 300 to the current amount in several negotiations between the Histadrut (General Federation of Labor in Israel) and employers' organisations. This is accurate as of April 1 2018.

Q11. What are the restrictions on working hours?

An average Israel work week takes 43 hours from Sunday to Thursday. The employee who works on a 5-day work week (Sundays to Thursdays) thus works 8.6 hours on a normal working day. Six-day employees work eight hours a day between Sunday and Thursday, with an extra three hours of work on Friday. Any operating hours exceeding normal hours per day and/or exceeding regular week (i.e. more than eight or 8.6 hours per day) are called extra hours. Overtime is usually prohibited by the Hours of Work and Rest Law.

However, with the following restrictions, a general permission granted by the Labor Ministry allows overtime: Six-day-working employees cannot work for four hours of overtime a day or 12 hours of overtime a week. Five-day employees can't work for over four hours a day or 15 hours a week of surplus work per day. According to the legislation, one workday from one hour shall be divided into a break of at least 8 hours. Otherwise, one working day shall be taken into account and an employee shall have a right for the following day of overtime pay.

Each employee is entitled to a minimum of 36 hours of weekly rest. Saturday shall be included in the weekly rest for Jewish employees and employees from any other religion can choose between Friday, Saturday or Sunday to rest at weeklies intervals. The Labor Ministry is permitted to issue rules that deviate from general weekly rest requirements and reduce them to a minimum of 25 hours a week. Until allowed with a general or special authorisation from the Labor Ministry, jobs shall be prohibited at weekly rest.

An employee shall have a right to a special weekly rest compensation, for working hours of weekly hours of rest, of not less than 150% of his daily salary.

Q12. What are the meal and rest break requirements?

Section 20 of the Hours of Work and Rest Law specifies that an employee shall have the right to rest and reset for a minimum of 45 minutes in every working day of six hours or longer, with an ongoing rest period not under 30 minutes.

The Labor ministry's permission nevertheless permits workers to do non-manual labour for eight to nine hours without interruption. Another license makes a continuous break of 30 minutes while the job takes place in a 3-shift mode. The statute further specifies the right of an employee to pray according to his values during the working day. In line with the conditions of the workplace, pray time is defined and the employee's religion is considered.

Q13. How is overtime calculated?

Any operating hours exceeding normal hours per day and/or exceeding regular week (i.e. more than eight or 8.6 hours per day) are called extra hours. The measurement is performed regularly as well as monthly. For the first two hours of overtime plus a further one hour of overtime the employee has the right to an extra-time bonus of 125% of his or her daily pay.

Q14. What are the overtime exemptions?

The House of Work and Rest Law does not include those types of staff, including those in managing roles, employees with special fiduciary partnership obligations and employees with unattended working hours by the boss. Labour courts can identify an employee who is identified in his employment contract as being excluded as nonexempt; the case law allows for the exception of a very limited category of employees.

Q15. Is there any legislation establishing the right to annual vacation and holidays?

The Annual Leave Law specifies that an employee has the right to a compensated annual leave for 10 or 12 days on start-up, rising annually to a limit of 28 days depending on the seniority of the employee. Besides, all workers are entitled to nine paid public and national holidays under the broadly applicable extension order.

Q16. What are the employee rights to medical leave?

The Sick Pay Law allows workers to work at a rate of 18 sick days a year, or up to 90. Workers shall not be allowed to pay on a sick day on the first day; employees shall be entitled to 50% of their pay on the second and third days; employees shall be entitled to 100% of their salaries from the fourth day onwards. Sick leave pay is certified for medical purposes and sick days accrued, unused and unused are not redeemable, unlike holidays.

Employees are allowed, all subject to such legal provisions, to use a proportion of their accumulated sickness days for a minor, parent or spouse's disease. Male workers can use maternity checks or the birth of a child up to seven sick days. Maternity and paternity leave shall be paid for by statute and are payable by national security (not the employer).

Q17. Is there any law prohibiting harassment in employment?

Prevention of Sexual Harassment Law requests employers to: print in the workplace a set of guidelines to deter sexual harassment; hire a prevention officer; enforce a program to prevent sexual harassment; and investigate complaints.

Q18. Is there any legislation protecting employee privacy or personnel data?

Employees have a fair right to privacy, and the right not to be tracked, at work. Employers can, however, track workers overtime, providing they have approval of employees and develop a policy outlining equipment, procedures, intent and data usage. The right of employees to privacy has evolved in recent years as a matter of law.

Q19. Must notice of termination be given before dismissal?

The Advance Notice for Dismissal and Resignation Law includes notification from all employers and workers. The notification period shall be fixed with a limit of 30 calendar days per the time of work. An employer can overlook the employee's presence during the time of notice, as long as it pays the employee in place of notice.

Q20. What are the laws governing redundancies? And in what circumstances are employees protected from dismissal?

In general, an employment contract and/or any collective bargaining arrangement applicable shall allow a company to terminate one of its workers subject to restrictions of law. The dismissal of pregnant women; maternity leave women or 60 days thereafter; women residing in the shelter of abused women; men required for military, sick leave staff; infertility treatment staff; households deprived of care and persons with disabilities is subject to legal restrictions.

In certain cases, termination is prohibited and the contractor should request permission from the appropriate governmental agency in some other cases. It would be unlawful to terminate a pregnant worker without the employer being able to satisfy the Labor Ministry that there are other grounds for termination and unrelated to the pregnancy. Besides, staff are entitled to a hearing before termination. In brief, for an employer to state his or her argument against firing, before reaching a last determination the employer must schedule a hearing with the employee concerned. The laws of the hearing are determined by jurisdiction.

Before making the definitive decision on termination and redundancies, a hearing must be held. Essentially, redundancy is subject to the same rules. However, since the contractor may be facing allegations that a form of improper prejudice or discrimination affects the layoff selection process, it is prudent for each decision to be completely reflected and expressed. In the event involving terminations of more than 10 jobs in the same month, the Employment Service Law requires the employer notifying the Employment Service Bureau. This rule, however, is never enforced or complied with. Certain collective bargaining arrangements may be subject to a mediation requirement.

Q21. Which courts or tribunals are competent to hear complaints?

There are two cases of the labour courts: the Regional Labor Court and the National Labor Court. The Labor Ministry has certain procedures – such as granting termination permits to pregnant mothers.

Q22. What's the usual protocol and the timing for complaints?

For civil non-collective workers, the basic protocol is as follows and may take 3 or 4 years.

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