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Employment in Israel

Israeli labor law applies to employees located in Israel and is comprised of a set of cogent statutory rules, regulations, and case law. In addition, there are collective agreements and expansion orders which apply to all or certain sectors of the labor market.

Key points on employment in Israel

There are several key areas to be aware of within the Israel employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department.  These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.

Employee Entitlements

Information Explanation
Working on Sundays ?

An employee’s weekly rest shall be not less than 36 consecutive hours in the week.

The weekly rest shall include:

  • in the case of a Jew, the Sabbath day;
  • in the case of a person other than a Jew the Sabbath day or Sunday or Friday, whichever is ordinarily observed by him as his weekly day of rest.

An employee shall not be employed during his weekly rest, unless such employment has been permitted.


Employee Protection and Anti-discrimination Rights ?

An employer shall not discriminate among his employees or among persons seeking employment on account of their:

  • sex;
  • sexual tendencies;
  • personal status;
  • age;
  • race;
  • religion;
  • nationality;
  • country of origin;
  • views;
  • party or duration of reserve service.
Time Off Work ?

The duration of the annual leave, in respect of a working year with the same employer or at the same place of employment shall be as follows:

  •  in respect of each of the first four years – 14 days;
  •  in respect of the fifth year – 16 days;
  •  in respect of the sixth year – 18 days;
  •  in respect of the seventh year – 21 days;
  •  in respect of the eighth year and onwards – one additional day per working year up to a period of leave of 28 days.

The days of leave shall include not more than one weekly rest for seven days of leave.


Medical Leave ?

A worker absent from work in consequence of sickness shall, subject to the maximum period of entitlement, be entitled to receive from his employer:

  •  from the fourth day of his absence as aforesaid, a payment under this Law in respect of the period of his sickness (such payment hereinafter referred to as “sick pay”);
  •  in respect of the second and the third day of his absence as aforesaid, half the amount of the sick pay.

Employment Termination

Information Explanation
Resignation / End of Service Payment ?

Where a woman resigns from her employment, within nine months after giving birth, in order to take care of her child, her resignation shall for the purposes of this Law, be deemed to be dismissal. The same shall apply to a woman who, either alone or jointly with her husband, had received a child under thirteen years of age for adoption and who resigns, within nine months from receiving the child for adoption in order to take care of him, provided that an adoption order is made either before or after the resignation.

The above provisions shall apply, mutatis mutandis, to a male employee if he meets one of the following requirements:

  •  his spouse was an employee for at least six consecutive months immediately before the date of his resignation; for this purpose, a period of discontinuance of employment in which the employee-employer relationship continued shall also be regarded as a period of employment;
  •  he has sole custody or charge of the child owing to invalidity or illness of his spouse;
  •  the employees spouse was a self employed woman for a period of at least 12 consecutive months immediately prior to the birth of or immediately before the child was received for adoption, as the case may be and she did not cease her employment in order to care for the child.


Severance / Redundancy Pay ?

A person who has been employed continuously for one year or, in the case of a seasonal employee, has been employed for two seasons in two consecutive years, by the same employer or at the same place of employment and has been dismissed is entitled to receive severance pay from the employer who has dismissed him.

Where, after an employee had passed from one place of employment to another under the same employer, the employers have changed at this present place of employment, such employee shall be entitled to receive severance pay from the previous employer in respect of his period of employment with him, or at the previous place of employment, as if he had been dismissed on the date of the change of employers.

If the new employer, by a written undertaking to the employee, has assumed responsibility for the severance pay which the employee would have been entitled to receive from the previous employer, the previous employer shall be exempt from the payment of severance pay, and the employee’s period of employment with the previous employer or at the previous place of employment shall, for the purposes of this Law, be deemed to have been a period of employment at the present place of employment.

Termination of Employment ?

The minimal statutory period of prior notice for dismissal and for resignation of employees whose salaries are paid on a monthly basis is one day during the first six months of employment; 2.5 days during the following six months of employment; and 30 days after completion of the first year of employment. The prior notice period cannot overlap with annual vacation.

The basic requirements for termination of employment are the following:

  1. Hearing: An employer who is contemplating the dismissal of an employee must conduct a hearing prior to reaching a final decision on the matter. The hearing allows the employee to hear the reasons for his or her intended dismissal, to express an opinion regarding the dismissal and to allow the employer to reach an informed decision on the matter;
  2. Advance Notice: Both employee and employer are required to provide each other with an advanced written notice before their termination of the employment. Generally speaking, the statutory periods for such advance notice can vary depending on the employee’s seniority as well as the payment basis (hourly or monthly), reaching as much as one month;
  3. General: Some terminations may be found to be illegal (e.g. dismissal of a pregnant employee who worked for at least six months for the same employer or at the same workplace is prohibited unless the employer has received a specific authorisation from the competent authority and dismissal due to the employee’s religion, personal status or sex and several other grounds is also prohibited, etc.).

Outsourcing Employment Through a GEO Employer of Record Service

Compliance with local employment requirements is just one of the issues foreign companies face when employing staff in Israel. For companies, which intend to employ their staff directly through their incorporated Israeli entity, professional legal advice is recommended. Shield GEO provides an alternative path for companies to outsource the employment of their staff in Israel.

As a Global Employer Organization (GEO), Shield GEO acts as the Employer of Record and ensures the employment is compliant with host country regulations regarding employment. In addition Shield GEO will handle payroll processing, tax and immigration. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Israel.

The Shield GEO solution is an attractive alternative where

– the company is looking to employ staff quickly

– the company doesn’t have an appropriately incorporated entity in Israel

– the company wants to work within a defined budget

– the company wants to limit its initial commitment in Israel

– the company needs help with tax, employment, immigration and payroll compliance in Israel

Shield GEO can contract directly with the company to employ and payroll their staff in Israel. Shield GEO supplies local employment contracts for the staff which ensure that local statutory requirements are met covering issues such as termination, probation periods, leave entitlements and statutory benefits.  Shield GEO is able to advise companies how to cover local employment regulations whilst still providing consistent global employment policies. Understand more about outsourced employment through Shield GEO.



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