An often laid-back atmosphere in the business environment nevertheless exists alongside a motivated attitude which can accelerate towards urgently ‘getting the job done’. Cooperation is encouraged between staff and an often loosely-structured hierarchy to achieve results.
• Agendas and meetings are flexible; punctuality is valued, though not always followed, but deadlines can drift. Flexibility plays an important role
• Israelis are determined negotiators – but don’t confuse Israelis being direct and honest with arrogance
• Business is relationship-oriented and building relationships out of the office is important; work colleagues or business contacts often become friends
• Although office attire can be relaxed, foreigners should be more formal for first meetings and use titles until the host initiates first name terms
• Israelis are not so precious about personal space, but religious individuals avoid close physical proximity and rely on eye contact
• As Israelis often ‘eat late’ be prepared for ‘apres business’ night life. But when organizing a business meal for your hosts, be aware of dietary restrictions due to religious beliefs
Israel Minimum Wage
The National Minimum Wage (NMW) for all local Israeli or foreign employees for 2021 is ILS5,300 per month (US$1,620) and is expected to reach ILS,5500 (US$1,680) by end of the year and into 2022. There are strict penalties for companies who do not comply with the NMW.
Probation Periods in Israel
There is no legal requirement for employers to give probationary/trial periods but they are legally permitted, typically for 6-12 months. These trial periods can be established through collective agreements. During the trial period, employees on probation have the same rights as full time employees.
Working Hours in Israel
The Work and Rest Law allows for 42 hours per week, generally from 8.30am until 6pm, Sunday to Thursday with some employees working Friday mornings. The weekend starts sundown Friday till sundown Saturday to observe Shabbat (Jewish Holy Day). Employees are eligible for 36 hours continuous rest each week. Companies who need workers on Saturdays must obtain authorization from the Ministry of Labor, with other days off as compensation.
Overtime in Israel
Any work over 42 hours per week is overtime and paid at time-and-a-quarter per hour for the first two hours and time-and-a-half for extra hours. Normally, overtime provisions are in the employment agreement and should reflect the overtime that employees are expected and estimated to work – known as the ‘Overtime Quota’, along with estimated pay called the ‘Global Overtime Payment’.
Notice Periods in Israel
The Prior Notice of Termination Law 5761-2001 stipulates written notice for a monthly-salaried employee is one day for each month during the first six months’ employment, and two and a half days for every additional month up to one year’s employment. After this the employee is entitled to one month’s written notice. If pay in lieu is given, the employer can terminate employment without notice. Notice cannot be served:
• To a pregnant employee, with 6 months’ work with her company, for up to 60 days following the birth
• For discriminatory reasons: gender, sexual orientation, religion, race and disability
Redundancy, Termination and Severance in Israel
A mandatory notice period of up to 30 days is set by Advance Notice for Dismissal and Resignation Law of 2001. Individual employees receive statutory severance of one month's salary for each year worked if they have worked for the employer for at least 12 months (Severance Pay Law 1963).
Negotiations may be needed if collective agreements or labor unions are involved.
Pension Plans in Israel
The Israeli government contributes 0.25% of earnings towards old-age and survivor pensions, subsidizing the 15.78% of total employee and employer contributions, as well as long-term care benefits for new immigrants, as administered by the National Insurance Institute.
Public Holidays in Israel
Passover March /April (7 days)
Independence Day April 15
Victory Day May 9
Pentecost May/June (50 days after Passover)
Fast of the Ninth of Av Celebrated one day between July 17 – August 14
Rosh Hashanha (Jewish New Year) September / October – two days
Day of Atonement (Yom Kippur) September / October – one day
Sukkot (Feast of Tabernacles) September / October – 7 days (5 days after Yom Kippur)
Simchat Torah September / October – one day
Sick Leave in Israel
The allowance for employees depends on length of service, which is one-and-a-half days leave for each months’ employment to a maximum of 90 days per year. No benefit need be paid on day one but for day two and three employees are entitled to 50% of their salary and 100% from the fourth day to the maximum period.
Vacation / Holiday in Israel
Besides paid public holidays (which vary yearly), employees are entitled to paid annual leave.
They receive 12-14 working days for one to five years’ employment, up to a maximum of 21-24 working days, depending on whether they work a 5 day or 6 day week. Entitlement is for the current year, but by special arrangements or collective agreements part of the holiday period can be carried forward to the following year.
Maternity/Paternity Leave in Israel
Maternity/Paternity Leave – Maternity allowance is based on income and social security contributions and made in one payment to the mother. Leave totals 26 weeks and employers usually pay for the entire period, although are only legally required to do so for 15 weeks. Mothers may end leave after six weeks with her spouse taking the remainder. Fathers can claim paternity allowance from the National Insurance Institute and are also entitled to seven days paid leave and accrued sick leave.
Bonuses in Israel
Employees receive a recreational holiday voucher twice a year, as a pre-paid debit card at Passover for ILS750 (US$230) and New Year for ILS500 (US$153) for use in shops while on vacation. It is however taxable. Employees (not sales related) from Grade 9 are entitled to join the company bonus scheme, as a percentage of their basic income and is taxable.
Car Allowances in Israel
Employers who give employees use of a company car must generally calculate the benefit as taxable income, even if the car is used only part of a month. Labor laws dictate employees should be reimbursed for travel to and from work.
Get in touch with Bradford Jacobs
The complexities of Israel’s tax, payroll and employment laws are part of a business culture that pose questions for your international expansion. Bradford Jacobs remove the mysteries of all these issues – freeing your staff to concentrate on growing your business.