Hire in Israel

Israeli law does not specifically address trial periods, although it is customary for them to last three months. Throughout this period, an employee is treated as a regular employee in all respects.

In the context of collective agreements, trial periods typically range from six to 24 months. Employers retain the authority to extend trial periods under specific conditions, with the stipulation that such extensions must be fair, just, and grounded in the employer’s reasonable discretion.

The standard working week in Israel should not surpass 43 hours and should be spread across no more than six days.

In numerous sectors, it is customary to observe a five-day workweek, typically from Sunday through Thursday. Employees are entitled to a consecutive rest period of at least 36 hours each week.

The official weekends in Israel span from Friday to Saturday.

Overtime in Israel is defined as any working hours beyond the regular daily hours, exceeding a total of 42 hours weekly. This calculation is applied on both a daily and weekly basis. Employees cannot be engaged for more than 12 hours in a single day, inclusive of overtime and exclusive of breaks. The weekly cap for overtime is set at 16 hours.

Employers are obligated to compensate overtime at a rate of 125% of the employee’s regular wages for the initial two hours of overtime in a day, and 150% for any subsequent hours. When work is performed on a holiday or Saturday, the compensation rate is 150%, and it also applies to vacation days.

Accurate timekeeping serves a dual purpose: it is essential not only for calculating regular work hours for salary payment but also for monitoring overtime pay, sick leave, pensions, and severance benefits.

By law, employers must maintain a record encompassing total work hours, rest hours, overtime hours, overtime pay, and holiday work pay. This record-keeping can be conducted through mechanical or digital means. In cases of manual record-keeping, employees sign the daily timesheet, which is then approved by a supervisor.

Hearing:

Before finalizing decisions related to termination and redundancies, a hearing process (‘shimua’) must be conducted. This ensures that the employee is informed of the reasons for the intended dismissal and provides an opportunity for the employee to express their opinion on the matter. This interactive process enables the employer to make an informed decision.

The employer is legally obligated to provide written notice in advance, informing the employee that their dismissal is under consideration, along with the reasons for it. During the hearing, the employee should be afforded a genuine opportunity to present any arguments they may have. Failure to conduct the hearing properly could lead to the nullification of the dismissal or may entitle the employee to damages.

Notice:

Both the employer and employee are required to furnish each other with written notice in advance of terminating employment. The specific notice periods depend on the employee’s seniority and the basis of salary payment (e.g., hourly or monthly). Although an employer may terminate employment without notice, they will be liable for a payment in lieu of advance notice.

Prohibited dismissals/Permit for dismissal required:

Special protections against dismissal are in place for specific groups, including pregnant women, those on maternity leave or within 60 days thereafter, women in shelters for abused women, employees on military or reserve service, those on sick leave, individuals undergoing infertility treatment, and bereaved families.

Collective Redundancies/Mass Layoffs:

The Employment Service Law mandates employers to notify the Employment Service Bureau when terminating more than 10 employees simultaneously or within the same month. Some collective agreements stipulate that employers must notify and consult with the employees’ union before dismissal. The usual process involves the employer identifying the need for collective dismissal and the number of workers to be affected. The employer then submits a list of candidates to the union, which can suggest an alternative list.

Termination for Cause:

If an employee is discharged for a serious disciplinary violation, the employer is exempt from providing advance notice or a payment in lieu of notice.

The termination of the employment relationship requires written notice from both employers and employees. The duration of the notice is contingent upon the length of service and the payment structure, whether monthly for salaried workers or hourly for wage workers.

For salaried workers:

• Less than six months: One day for each month of service.
• Seven to 12 months: Six days plus 2.5 days for each month of service beyond six months.
• Over one year: One month.

For hourly workers:

• In the first year: One day for each month worked.
• In the second year: 14 days plus one day for every two months worked beyond the first year.
• In the third year: 21 days plus one day for every two months worked beyond the first year.
• After three years: One month.

Payment of wages for the notice period can be provided to the other party as an alternative to serving the notice period.

Severance Pay (‘Pitzuim’): In the event of an employee’s termination, they are entitled to one month of severance pay for each year worked. This severance pay, known as ‘Pitzuim,’ is deposited by the employer into the employee’s pension fund. If an employee resigns voluntarily, severance pay is not legally mandated, although some employers may choose to provide it. Any accumulated Pitzuim in a pension fund belongs to the employee.

The following are specific payment categories that an employer may provide in certain situations:

‘Maanak Peraydah’: A one-time payment upon departure, separate from Severance Pay (‘Pitzuim’).
‘Dmai Histaglut’: Adjustment pay, typically equivalent to several months of additional salary.

In Israel, the enforcement of non-competition covenants by courts is generally limited, requiring employers to present compelling factors justifying their acknowledgment. Nevertheless, there is an expectation that employees are formally obligated in writing to maintain confidentiality.

Both customer and employee non-solicitation agreements are allowed, but the usual restriction period is not exceeding 12 months. During this non-compete duration, it is acceptable to provide compensation equivalent to 50% to 75% of the employee’s last salary.

Histadrut, also known as the General Organization of Workers in Israel, stands as the national trade union center, comprising a federation of 28 unions categorized by industry, profession, and trade.

Employers are not permitted to oppose the establishment of a workers’ union and are obligated to engage in good-faith negotiations with the union.

Union membership is voluntary, and even in cases where it is legally required, there are no legal sanctions for non-compliance.

Under Israel’s Wage Protection Law, employers can deduct union dues from workers’ salaries and transfer them to the union.

There is no restriction on the duration of a fixed-term employment contract, but its use must be justified. Like any other contract, it should be governed by good faith and non-discrimination principles.

While the law doesn’t specify the maximum duration of such contracts, legal precedent suggests that a reasonable term is typically up to 24 months.

A fixed-term contract is designed for work with a specific time frame or a defined project. The contract concludes when the set time or project is completed, and employees under fixed-term contracts must be treated equitably.

In cases where an employment contract outlines a fixed period, the contractual relationship automatically terminates at the end of this period, without being considered a resignation or dismissal.

Terminating a fixed-term contract before its scheduled end by one party (typically the employer) may result in the other party (the employee) being entitled to damages equivalent to the remaining salary for the agreed-upon term.