Israel: Employment Law – Highlights For 2017

Last Updated: 9 February 2018
Article by Shoshana Gavish

Laws and Regulations

  • Increase in Minimum Wage – As of December 2017, minimum wage was increased to 5,300 NIS per month and 28.49 NIS per hour. This increase affects payments for overtime and work during the weekly rest period (125-225% of the base salary).
  • Extended limitation period for claiming recreation pay – The two-year limitation period for claiming recreation pay (1,890-3,780 NIS in the private sector, according to seniority) has been cancelled. As of January 2017, employees may claim recreation pay for 7 years back.
  • Electronic Pay Checks – Pursuant to regulations promulgated in July 2017, employers may issue electronic pay checks instead of hard copies thereof,  provided the employee has consented in writing according to the form attached to the regulations, provided the employees are able to print the pay checks and provided that employees may - at any time - revoke their said consent. The regulations specify the manner in which an E-pay check is deliverable to the employee along with the security measures that employers must take to ensure lawful delivery.
  • Cameras in the Workplace – The Authority for Privacy Protection has published updated guidelines on installing cameras in the workplace. The general rule is that employees are entitled to privacy in the workplace, including in their workstation - even if the workplace is shared with others. The guidelines detail in which places  camera installation is strictly prohibited, in which places it is permissible and in which places the employer may take measures toward obtaining permission what these measures are. 

Case Law

  • Calculating severance pay for hourly/daily rate employees - According to recent case law, the calculation should consider the employee's average work-time during the entire period of hourly/daily rate employment and not – as hitherto ruled – only the last 12 months. When calculating the regular hours worked on a certain day, hours will be attributed to the consecutive workday rather than overtime, only if preceded by a break of at least 8 hours whether or not the hours are worked on one or two calendar days.
  • Biometric Surveillance – Employers may not obligate employees to provide fingerprints for biometric surveillance. In order for employee consent to be valid, employers must comply with strict requirements intended to ascertain that the use of biometric surveillance is proportionate, reasonable and in good faith, that employees' consent  has been freely given and on an informed basis, and that the employer performed no abuse of power.
  • Pregnant Employee Employment – Employers are prohibited from predefining the employment period for pregnant employees in order to circumvent the prohibition on dismissing a pregnant employee who has completed 6 months of employment.

Additional Interesting Rulings 

  • Pain and suffering unrelated to salary – In case of unfair dismissal, damages that may be imposed on the employer are not salary contingent.  Underlying this ruling is the concept that pain and suffering experienced by an employee whose salary is low is not necessarily lesser than the pain and suffering experienced one whose salary is higher. The criteria in this case are different from damages for loss of earnings. The criteria to be taken into account in computing the amount of damages include the reason for dismissal, seniority, age and employee conduct.
  • Employer Obligation to Record Working Hours - Employers must record employee work hours and failure to do so may lead to various sanctions.  Aiming to facilitate claims for unpaid wages, the law has also reversed the burden of proof, creating a presumption that the employee has performed the maximum amount of permitted overtime hours.  However, this presumption can be rebutted and if the employee fails to prove that she worked overtime or if the employer proves that the employee did not work overtime – the reversal of the said burden will not entitle the employee to any payment for overtime hours no worked.
  • Retroactive Tax Deduction is not Necessarily Permissible – Employers who discover that they have erroneously failed to withhold required employee taxes, might find themselves in a predicament in which they are obligated to pay the tax without being able to deduct the amount from the employee (who is the bearer of  the tax paid). Precautionary steps can prevent such a predicament. Among the precautionary steps are specifying on the pay-check  that the remuneration is a gross amount, notifying the employee immediately of any error discovered and in such a case taking immediate action vis-à-vis the employee to reach an agreement as to the deduction of the tax payable from the employee's salary. 
  • The Levy Imposed upon Employers of Foreign Employees is Not Included in Computing Minimum Employment Costs in Public Tenders - The Supreme Court of Justice Ruled that non-inclusion of the levy imposed upon employers of foreign employees in computing minimum employment costs of employers who compete in public tenders, reflects a lawful and proper policy of encouraging the employment of local employees. The Supreme Court rejected the petition of employers of foreign employees to enjoin the state and other public bodies to include the levy in computing minimum employment costs. 
  • Prohibitory Fines on Interfering with Employee Unionization– In a recent case involving a major food chain, the court imposed a fine of 1.5M NIS on the employer for interfering with its employees attempts at unionization. The court ruled that declarations on behalf of the employer to the effect that it will not interfere in unionization are not enough and that the employer must act to implement an appropriate organizational culture and ascertain that managers do not act in an adversary manner towards their subordinates. Prohibited conduct includes summoning involved  employees for disciplinary hearings, tightening restrictions on conduct, disseminating messages that unionization will harm those involved or that unionization is bad for the workplace or its competitiveness, that the unionization is unnecessary since the employer takes care of its employees and participating in the drafting and signing of forms revoking membership.  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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