- Overview: Israel
- Global PEO and payroll
- Global HR Compliance
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Israel
If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in Israel Guide below will help you understand the nuances of labor legislation in the country.
When the company is planning to enter a new foreign market of Israel and has a need to employ a local national there, the first question to answer is how it is going to make local hires.
We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.
This solution helps you employ your global sales force in Israel as well as in other 180+ countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.
Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.
So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Israel instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.
Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.
Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in Israel .
We are experts in global workforce employment in Israel, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Israel.
See Hiring and Firing Workforce in Israel Guide below for a general overview of labor rules and regulations in the country. Or contact us if you need to employ workers in Israel or would like to get more details.
Hiring and Firing Workforce in Israel Guide
# Employment Contracts
Workers can be employed as full-timers or on a fixed-term basis and based on that, on collective agreement and individual contracts they may have a varying length of contract. In drawing up an employment contract, the employer must include a detailed description of the job, hours of work, wage and leave entitlements.
# Minimum (Statutory) Employment Rules and Regulations in Israel
# Hours of work
The standard working hours for employees under 18 years old is 40 hours per week. Employees who are 18 years and above customarily work 45 hours per week. For a regular 5-day work week, an employee is not supposed to work more than nine hours per day unless with the permission of the Ministry of Industry, Trade and Labor. Likewise, an employee who has a regular 6-day work week may not work more than 6 hours per day without the consent of the Ministry. Most employers give their employees a 36-consecutive rest hour each week. Because of the orthodox beliefs of the Israelites, these rest hours are usually given to include the Sabbath for the Jews or any other time from Friday to Saturday for non-Jewish employees.
# Probation period
New employees can work a suitable probationary period of between one and 12 months depending on the terms of their contract of employment or collective agreement. The agreed period of probation can be extended and/or terminated (before and after the given period) based on the extension provisions in the relevant contract or agreement.
# Annual leave
Annual paid leave is given based on an employee’s years of service with the employer, starting from 12 to 21 days. These do not include the public holidays or the period the employee is out of work due to maternity leave. Employees have the right to accumulate their annual vacation up till 2 years, providing they use 7 days out of the entitled leave in the given year. An employee can agree to payment in place of the leave. Employers are obligated to compensate employees for any paid leave that was not used prior to the termination of the contract of employment.
# Parental leave
Maternity leave is not completely paid for in Israel. Employers are required to provide a 26-week maternity leave to their female employees who are expecting baby and can be increased in the case of multiple child births or complications. Since only 14 weeks are paid for throughout the maternity leave, the employee is entitled to receive from the Social Security Institute, a daily allowance that must not exceed 1,459.50 shekels. In addition, one month grant is usually given to them to help cover the initial expenditure after childbirth. On concluding the maternity leave, the employee must be given a daily hour of paid rest during the working hours, for the period of 4 months.
Male employees have the right to 6 days’ paternity leave, 3 days of which will be taken from his annual leave and the other 3 from the sick leave. Paternity leave can be taken as an unpaid leave if the employee has used up all his paid annual- and sick leave. With the consent of the new mother and under the condition that she would resume work as soon as required, a working father can take up the wife’s maternity leave beginning from the 6th week after the child is born. During this period, the male employee will be entitled to an allowance that must not exceed 1,459.50 shekels per day.
After the paid leave has ended, either of the parents will have the right to an unpaid leave that can vary in length up to 12 months, depending on his/her years of service to the company.
# Sick leave
During the time of sickness, an employee is eligible for a paid leave starting from the second day that he is away from work due to sickness. Sick employee is entitled to 37.5 percent of his normal wage during the first 3 days of sickness absence and 75% for the following days. Sick leave can be amassed up to 90 days -1.5 days per month and 18 days per year throughout the employee’s service period in a given company.
There are constraints as to the number of hours an employee can work over the regular working hours. Regardless of the type of workweek, an employee is by law not allowed to work more than 4 extra hours a day or 12 extra hours a week. Overtime is compensated for with 25% premium of the employee’s base wage for every first 2 extra hours and 50% premium afterwards. Shift workers who work between the hours of 3 am and 11 pm are entitled to 1.5 of their normal pay, and those who work within the hours of 11 pm and 7 am have the right to 1.425 of their base pay. Employees are entitled to 1.5 of their base pay and an additional holiday each time they work on a paid holiday.
# Minimum wage
Minimum wage may vary, depending on the industrial sector. The legal monthly minimum wage as at the 1st of January 2017 was 5000 shekels (ILS). Employees are mostly paid on a monthly basis, and in that case, is entitled to be paid on the 9th of the following month at the latest. Workers who are remunerated by the hour/day/week must be paid at fortnightly intervals unless otherwise agreed beforehand. In case of an untimely payment, the employer is obligated to increase the salary by 5% after the first week the payment was not paid as should or 10 % for further delay.
# Employment termination
The reasons and conditions for which an employer can end an employee’s contract of employment may be regulated by the individual contracts or collective agreement. An employer is required to give his employee a notice period ranging between one day and one month before he can terminate the contract depending on period worked and type of employment
Dismissed employees who are paid by the month are entitled to receive within 24 days of their last remuneration, a severance pay that amount to one month of their basic salary per year worked. The rest of the employees are entitled to receive within 24 days of their last remuneration, a severance pay that amount to 2 weeks of their basic wage for each year they worked.