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Reserve Duty in Israel: A Guide for Overseas Employers

Hiring employees overseas means that your company will be obliged to follow all employment related laws in the host country.  Even if you intend to be fully compliant, how can you be sure that you have access to all the current rules and regulations?

This is especially true in a country like Israel, that has some very unusual mandates for employers, such as handling the benefit for employees that are called up for reserve duty and have to miss work.  Here is a quick overview to give you an idea of what is required.

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Reserve Duty in Israel

Under the Security Service Law, your employees may be called for reserve duty (or reserve service), which will mean they will have to miss work while serving.  Naturally, this only applies to Israeli citizens, and not expat employees on assignment.

Under the law, employees serving on reserve duty must still be paid by their employer.  While this can be an inconvenience, the National Insurance Institute (NII) pays a reserve service benefit to cover this expense for the employer.

How many Reserve Duty days can an employee be called for?

The maximum number of days for reserve duty is 36 per year.

Case Example: Invoicing Reserve Duty in Israeli

We had a client that was wondering how the invoicing is handled for reserve duty days and benefit payments, and we shared the following points to clarify:

  • Even if the employee is absent due to reserve duty, the employer is still obligated to pay the employee as if they were present at work.
  • The employer then submits a claim for a benefit refund from the NII
  • Once the benefit is received by the employer from the NII, it is known as “Refund for Reserve Duty”, and will be noted on the invoice as such.
  • The NII uses a formula to calculate the amount of refund for days of service, and if the amount is more than the employee’s daily salary, the employee is entitled to the difference. This is noted on the invoice as “Addition for Reserve Duty”, and processed in the payroll.

Shield GEO Solution

While mandatory reserve duty for employees is fairly unique, it does illustrate what you will be facing when you start hiring overseas.  In some cases, your local employees may know more about the employment and benefit rules than you do, and you have to find a way to ease their concerns and maintain compliance.

How will you secure a local resource or expert to assist with your international employment?

This is the core of the Shield GEO solution, where we offer you a local employer of record to manage the full range of employment, payroll, and benefits for your employees.  This ensures full compliance and reduces the time spent by your HR department on employment administration in a foreign location.  We make international employment simple for our clients in over 90 countries.

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