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Israel

January 15, 2021

By Simon Weintraub and Shira Lahat

Back to International Employment Law

Israel

KEY DEVELOPMENTS FOR 2021


 

Israeli equal pay law for male and female workers

In August 2020 an amendment to the Israeli Equal Pay Law for Male and Female Workers (5780–2020) was approved.

This amendment applies only to employers, with more than 518 employees; in the public sector; which are subject to specific government funding; and government companies with certain reporting requirements.

Prior to this amendment, employers did not have specific requirements to offer equal pay and were only required to present details about salary and terms if an employee claimed that he/she was specifically discriminated

Pursuant to this amendment, all applicable employers are required to prepare three types of reports including (i) an internal report, (ii), an individual report and (iii) a public report.

The first reports under this new amendment must be published by no later than 1 June 2022. The applicable Minister may in the future impose regulations to apply these new requirements to additional employers.


 

Hearing requirement for workers engaged through a contractor placement arrangement

Current Israeli case law requires a certain hearing procedure before an employer may elect to terminate the employment of an employee. According to a recent ruling of the Israeli National Labour Court, such hearing might be also required when ending the placement of a worker who is engaged through a contractor placement arrangement (such worker shall be referred to herein as the "Contractor"). In this specific case, the court ruled that due to the nature and purpose of the right to a hearing, in certain circumstances, where the cessation of the placement of the Contractor might result in the termination of the employment of the Contractor by his actual employer, the contracting company should hold (usually jointly with the employer of the Contractor), a hearing for the Contractor, before electing to terminate the services being provided by such Contractor.

In the specific case that was brought in front of the court, due to the lengthy placement (23 years) of the Contractor with the contracting company (the Israeli Electric Company "IEC") as well as for the reason surrounding the termination of his placement (i.e., accusation of fraud), the court ruled that the IEC, (a) was obligated to conduct a termination hearing for the Contractor, (b) present its suspicions, and (c) allow the Contractor an opportunity to address the claims and to challenge the termination. We note that this case is an extreme case and may not be applicable to all future contractor termination scenarios.


 

Disclosure of terms of employment

The regional labour court in Israel recently denied a claim submitted by an employer, claiming that a former employee has breached his confidentiality undertaking by disclosing his salary to a third party outside the employer.

The court ruled that the salary and employment terms of an employee salary is not proprietary to the employer and may not be treated as a trade secret. The court ruled that this information belongs to the individual and therefore an employer may not share this information, subject to its obligations under any law, without the consent of the employee. With that said, an employee is permitted to share this information with any third party. Furthermore, employers may not impose confidentiality undertakings on an employee with respect to the terms of employment.

With thanks to Simon Weintraub and Shira Lahat of Yigal Arnon & Co for their invaluable collaboration on this update.

 

KEY DEVELOPMENTS FOR 2020


 

Changes to the working environment

Israel has been without a functioning Government for some time now and as such, no new legislation has been implemented. However, there has been more focus and awareness on the following trends:

  • Increased awareness regarding a proper working environment — specifically, more focus on preventing sexual and other harassment claims, bullying, etc.
  • More openness to "alternative" lifestyles in the workplace—increasing interest and use of parental time off (rather than just maternity leave), express policies being adopted about tolerance for non-traditional family, gender issues, etc.
  • Increased interest and thought going into alternative working arrangements (including remote working) and what this means from an employer's perspective in terms of compensation, reimbursement of infrastructure costs, supervision and monitoring, and working hours.

 

KEY DEVELOPMENTS FOR 2019


 

Increased paternity/spouse rights

Under Israeli law, mothers have traditionally been provided with protection and paid maternity leave on the birth and adoption of a child. Parental and paternity rights have also been introduced and there has been significant interest by companies and employees in such rights in recent years.

More companies are adopting express policies with respect to parental rights to paid and unpaid leave in connection with the birth or adoption of a child, and these rights also apply to same-sex families. From 1 August 2018, where there are multiple births, the husband is entitled to take up to two weeks of leave for each additional infant (of which at least seven days must be consecutive) in place of the mother, with her consent. However companies will often provide additional days in excess of the legal framework.


 

Reorganization of the work week

The standard work week in Israel is now 5 days, running from Sunday to Thursday, which is linked to the personal day of rest designated for the majority of the workforce (based on their personal status, by which they are designated as ”Jewish” regardless of their actual practice and beliefs). Since the Jewish religion forbids work or transport during the Sabbath, observant Jewish employees do not have a day off during which places of business are open.

Discussions are ongoing to rearrange the work week so that Sunday becomes a day of rest once a month or once every two months, and to add a short work day on Friday of that same week. In the context of this re-shuffling, a law has been passed to shorten the work week from 43 to 42 hours. However, since the weekly limitation of 15 overtime hours was increased to 16 hours, the change did not result in any significant change of work habits, but does provide a minor financial benefit for employees when their daily or hourly compensation is being calculated (for instance, for redemption of vacation days upon termination).


 

Proposals to amend work visa process

Currently, a work visa can be obtained for persons with special expertise, which can be difficult to establish, or for people who have the right to receive citizenship in Israel (i.e. have the right to emigrate to Israel because of their Jewish family connections). For the past few years there has been an increase in the number of Israelis relocating abroad for work, especially in the high-tech industry, but conversely a smaller influx of employees, mainly due to the complicated and adverse visa process. The Ministry announced an overhaul of the process at the beginning of 2018 with the aim of streamlining the process of granting visas, however there has not been a significant change in the actual practice so far. This is a matter of national concern as it impacts the viability of the talent scarce technology sector.

 

KEY DEVELOPMENTS FOR 2018


 

Privacy

The Privacy Protection Authority published guidelines in October 2017 restricting the operation of surveillance cameras in the workplace to use which complies with requirements of reasonableness, proportionality, fairness and good faith, and which is carried out for legitimate purposes. In addition, prior to the installment of the cameras, an employer must formulate a clear and detailed surveillance camera policy, present it to the employees and obtain their formal consent. Furthermore, an employer’s use of hidden cameras or obtaining footage of employees without their knowledge is strictly forbidden.

In another development, the National Labor Court ruled that due to privacy concerns, employers cannot require employees to provide their fingerprints for monitoring attendance on a biometric device and an employee must grant free and informed consent to its employer before an employee’s fingerprints are utilized for such purpose.


 

Increase to Minimum Wage

As part of the gradual increase in the minimum wage, on December 1, 2017, the monthly minimum wage in Israel was increased to NIS 5,300.


 

Extension of Paid Maternity/Paternity Leave

An amendment to the Employment of Women Law 1954 extended the term of paid maternity leave for female employees from 14 weeks to 15 weeks from the date of the birth. Pursuant to the Amendment, a female employee may allow her spouse/partner to take this 15th week of paid leave in her place.

 

KEY DEVELOPMENTS FOR 2017


 

Increase to employer and employee pension contributions

As of January 2017, employees will contribute 6% of their monthly salary to their preferred pension arrangement and employers will contribute at least 6.5% of the employee’s monthly salary to the employees’ pension arrangements in addition to the mandatory severance payment contributions.


 

Increase to annual vacation days

Following an Amendment to the Annual Leave Law, as of January 2017 the minimum vacation day entitlement for full time employees in their first four years of employment is 12 days.


 

Increase to national minimum wage

As part of the gradual increase in the minimum wage, as of January 2017 the minimum wage in Israel will be NIS 5,000.

 

KEY DEVELOPMENTS FOR 2016


 

New rights for parents to be paid when absent due to a child’s illness

In March 2016, an amendment to the Sick Pay Law (Absence due to Child’s Illness) 1993 changed the rules regarding circumstances in which an employee may be entitled to receive sick pay due to a child’s illness. As of April 2016, employees who are absent from work when their child suffers from a disease that requires routine dialysis treatment or when a child suffers from any other disease to be determined by the government will be entitled to sick pay.

In August 2016, another amendment was published pursuant to which employees are entitled to receive full sick pay on the first day of absence due to their child’s illness.


 

New rights for fathers regarding paternity leave

An amendment to the Employment of Women Law 1954 granted a male employee up to five days leave after the day his spouse/partner has given birth without the need to obtain the employer’s consent and a daily hour of paternity leave after their spouse/partner has given birth for a period of up to four months following the maternity leave.


 

Reduction of transportation allowance

In August 2016, the Minister of Welfare and Social Services issued an extension order pursuant to which the maximum daily amount that an employee is entitled to receive from an employer for transportation expenses was reduced from NIS 26.40 to NIS 22.60.

With thanks to Ben Sandler and Ira Evental of Yigal Arnon & Co. for his invaluable collaboration on this update.

Contributors

Image: Suzanne Horne
Suzanne Horne
Partner, Employment Law Department

Image: Kirsty Devine
Kirsty Devine
Associate, Employment Law Department

Image: Aashna Parekh
Aashna Parekh
Associate, Employment Law Department

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