A successful business largely depends on its employees. By creating working contracts that include the right terms and benefits there will be no misconception and the perfect work-life balance can be created. At Bradford Jacobs, this is our aim, and we support companies in over a hundred countries with creating compliant and balanced labor contracts.
Our team keeps track of Israeli laws and regulations daily to be duly aware of updates that can be implemented in working contracts. By using our PEO and EOR service we can provide compliant labor contracts for employees in Israel, including local benefits.
To support your plans, we made this guide including the basics of employment contracts in Israel. After reading this guide you will know everything about the conditions, laws, and benefits to include in an Israeli employment contract.
How do you hire Israel Employees?
Companies hiring staff for expanding operations into Israel must ensure contracts and agreements with their employees fit into a framework of employment rules. Laws and regulations provide employees with minimum entitlements, which can be extended by Collective Bargaining Agreements (CBAs) authorized by the Ministry of Economy, in addition to their individual contracts. Where different levels of entitlement apply to employees, the most beneficial always takes precedence. The Enforcement Unit of the Ministry of Economy or federal or state authorities oversee employment laws that safeguard rights and entitlements of employees.
When hiring and then contracting a new employee, there is no legal need for the contract to be in writing, but essential requirements include:
- The agreement should stipulate the type of employment, open-ended or fixed term and whether a probationary period is included
- Contracts need not be in writing and oral contracts are legally binding
- Under the Foreign Employees’ Law, foreign workers’ contracts must be in writing, in a language they understand
- Employment contracts are legally invalid and cannot be enforced if they do not meet statutory minimums
- New employees can request a written contract and existing employees on verbal agreements can request written confirmation of changes in their work practices
- A contract should be presented or agreed within 30 days of starting work. Employees on an oral contract must be given a written ‘notice’ of the essential points in this period. These include full names, addresses and IDs of employer and employee; position and main duty; salary, working hours, breaks and rest days; social benefits and entitlements with pension fund details; relevant collective agreements
- Employers should check prospective new employees are not restricted by a ‘non-compete’ clause with their previous employer
- There should be a workplace policy regarding prevention of sexual harassment and if the employer intends monitoring the employee’s computer use
These considerations come into play during the first stages of hiring and onboarding – including drawing up a contract with your new employee. Once Bradford Jacobs’ Professional Employer Organization (PEO) recruitment networks have located the best talent for your company, we step in to handle this crucial element of recruitment.
Types of Employment Contracts in Israel
There is no legal requirement for employment agreements to be in a formal written contract.
However, within 30 days of starting work, the employee is given either a written contract or a ‘notice’ highlighting such as responsibilities, scope of work, entitlements and working conditions, disciplinary procedures, termination, and severance payments. In addition to the notification, employees on an oral agreement must still be given written confirmation of any changes to their work schedule or other aspects of their role.
Main contract types are:
- Indefinite, Open-ended Employment Contracts: The most common type of contract runs without a specified end date. The Notice of Discharge and Resignation Law requires both parties must give notice of dismissal or resignation. All employers and employees are subject to the laws on termination, which is permitted on reasonable grounds, excluding discrimination, if correct procedures are followed.
- Fixed-term Employment Contracts: These are for a specified period of time or are attached to a specific project. Termination of the contract by the employer before the agreed period entitles the employee to the balance of the salary that would have been paid for the full term.
- Probationary Periods: Trial periods are allowed, during which the probationer must be treated the same as a full-time employee. The probation can be between one and 12 months according to the contract or relevant collective agreement. The required notice period is one day for each month worked up to six months, then two-and-a-half days for each additional month up to 12 months.
- Collective Bargaining Agreements (CBAs): The Collective Agreements Law is the main legislation governing CBAs. They set out minimum terms and entitlements for workers, such as wages, sick leave, maternity benefits, paid vacations and notice periods. Collective agreements can apply to specific sectors or companies, or generally with a wider scope. General collective agreements can be extended by the Ministry of Economy to wider groups of employers and employees. Where workers are covered by contracts, collective agreements, and statutory minimums the most beneficial for the employee always applies.
Employees are permitted to establish a union in their workplace if none exists, with the general rule there should be one ‘bargaining unit’ of at least one third of the workforce.
What Employment Laws exist in Israel?
Israel has a host of laws covering various aspects of employment, which come under the National Labor Court for adjudicating on disputes. They include:
- The Minimum Wage Law – sets the absolute national minimum wage limits, which can be bettered by individual contracts or collective agreements.
- Equal Pay for Male and Female Employees Law – which in August 2020 dictated that from June 2022 all companies with more than 518 employees will have to publish wage differential between male and female employees.
- Hours of Work and Rest Law – which governs working hours, breaks, overtime, and night work.
- Foreign Employees Law – states that they must have a written contract in the language they understand, whereas for local employees a written contract is not a legal requirement.
- Sick Leave Law – stipulates that any employee accrues an allowance of one-and-a-half paid sick days per month, totaling 18 days a year.
- National Insurance Law – details provisions for insurance covering old age and survivors, employment injury and illness, unemployment and disability benefits, maternity allowances and employees affected by company bankruptcy among other categories.
- Women in Employment Law – sets out rights of women and their partners in the workplace, including during pregnancy, maternity leave, and fertility treatment.
- Advance Notice for Dismissal and Resignation Law – requires employers and employees to give notice of resignation or dismissal.
- Severance Pay Law – provides that an employee who has worked for 12 months for the same employer, or at the same place of employment, is entitled to severance pay if dismissed. The law also sets rules regarding death of employer or employee, resignation of a female parent, non-renewal of contracts and also sets compensation limits.
- Protection of Privacy Law – governs the maintenance and monitoring of databases in relation to the personal information of employees. The database must be registered with the Registrar of Databases.
- The Employment Equal Opportunities Law – safeguards employees against discrimination damaging their chances of employment.
- The Credit Data Law – prohibits employers from requesting or obtaining information regarding an individual’s credit history or credit rating for the purposes of employment.
- Annual Leave Law – sets minimum benefits for paid vacations
Companies extending their operations into Israel need a complete grasp of employment and contract laws. Add Bradford Jacobs’ expertise to the equation with our comprehensive understanding of Israeli laws and regulations. The global reach of our Professional Employer Organization (PEO) specialists is matched by in-country Employer of Record (EOR) platforms that ensure a smooth entry into the Israeli economy.
How do you onboard Employees in Israel?
The most efficient and cost-effective method of onboarding employees into the Israeli economy is through a global recruitment company such as Bradford Jacobs.
Transferring staff from abroad requires compliance with strict and protracted procedures to obtain visas and work permits – a long and tedious process. Making mistakes risks sanctions, wasting time and money with the likelihood the employee will not be allowed to start work, or may even be promptly deported on arrival at the airport.
The alternative is to locate and recruit staff from within Israel. This takes a thorough knowledge of the employment market. And Bradford Jacobs have the knowledge to clear the way for your expansion.
Our Professional Employer Organization (PEO) and Employer of Record (EOR) solutions manage every stage of the process from finding the employee to seeing their first check is paid on time. The result? Your new employees are quickly operational as part of a team making their mark in your new territory.
Translating Israeli Employment Contracts
There is no general legal requirement to translate contracts into a particular language, except in the case of foreign workers who must have a written contract in their own language under the terms of the Foreign Employees Law.
Tick all the boxes
Bradford Jacobs’ recruitment specialists will guide you and your employees through every step of onboarding into Israel. From talent acquisition to the complexities of employment legislation, payroll and tax, Bradford Jacobs ticks all the compliance boxes, and we ensure every aspect is contractually watertight.
The global reach of our Professional Employer Organization (PEO) recruitment platforms, combined with the in-country knowledge of our Employer of Record (EOR) specialist teams, guarantees a successful and smooth transition for your employees in your new territory.
To learn more about our PEO and EOR packages, contact one of our sales specialists today.