Employment Overview
Navigating Israeli employment legislation can be complex without local legal specialists.
At N2S, we simplify compliance, making it clear and straightforward for our clients and customers to grow and excel in Israel.
Israel Country
Guide
N2S provide expert solutions for businesses looking to expand or grow into Israel, including compliance, payroll management and employment support. Request our Services to find out more about how we can help you.
For More Information
Receive a walkthrough on how to hire and employ in Israel, please fill out your details below.
Onboarding
Onboarding in Israel can be straightforward for providers, like N2S, that have standard templates and processes.
Engagement Types
There are two core engagement types in Israel:
1. Employment – which can permanent or fixed term
2. Independent contractor engagements – which should be project or time limited
2. Independent contractor engagements – which should be project or time limited
Customers should consider carefully how they wish to engage their workforce and N2S can support customers in implementing compliant and scalable solutions.
IC Compliance
Customers should ensure that Independent Contractors (ICs) that they use are appropriately vetted and classified. This will help protect the business from misclassification claims.
Key considerations include the below, if you require further information or support, please contact us.
Contractors should be distinct from employees and be in business on their own account.
The following elements should be considered when making a classification determination:
1. Control
2. Subcontracting
3. Equipment
4. Financial risk
5. Management
6. Contracts
7. Opportunity for profit
Social Security/Taxes
1. Employer’s social security contribution in Israel ranges from 3.55% to 11.15%.
2. Pension contributions at no less than 6.5% should be accrued.
3. Education fund contributions, whilst not mandatory are common, at 7.5%.
4. Employers should also accrue for disability at 1%.
Minimum Wages
Israel does have a minimum wage which varies each year.
Working Hours
1. Standard working hours in Israel are circa 42 hours per week.
2. The standard workweek is Sunday to Thursday, usually including four 8.6 hour days and one 7.6 hour day.
3. Any working time in excess of daily working hours is considered overtime. Overtime is regulated, and requires an additional payment, 125% of salary for first two hours of overtime and 150% thereafter (most employers pay a flat overtime rate as an addition to salary, which can be adjusted).
Statutory Leaves
1. In Israel, annual leave is 12 to 14 days (depending on 5 or 6 day work week) per year which increases with length of service up to 20 and 24.
2. Sick leave is up to 18 days per year, accruing to a maximum of 90 days. On 1st day of sickness, no entitlement to pay, on 2nd to 3rd day, entitlement to 50% of salary and from 4th day onwards, entitlement to 100% salary.
3. Sick leave is up to 18 days per year, accruing to a maximum of 90 days. On 1st day of sickness, no entitlement to pay, on 2nd to 3rd day, entitlement to 50% of salary and from 4th day onwards, entitlement to 100% salary.
4. Paternity leave in Israel is up to 5 days; the first three days are treated as annual leave, the latter two deducted from sick leave.
Termination
1. The termination process in Israel is relatively straightforward – terminations must “be in good faith” for dismissal to be valid. This would usually include a hearing process.
2. Notice periods are stipulated in the employment contract (or any collective agreement) and is usually linked to the length of service.
3. The total employer notice period varies according to length of service, starting at 1 day of day notice (for each month of service) and increasing to 30 days notice after one year of service.
4. Employees are entitled to statutory severance pay after one year of service, and must be accrued monthly.
