Client updates / Employment

Three updates to employee rights (Minimum Wage – Annual Paid Leave – Pension) came into effect on July 2016. The following is important news about the next update to employee rights, which is expected to come into effect on 1.1.2017.

After about a year of uncertainty about the pension insurance allocation ratios according to Amendment number 12 to the Control of Financial Services (Provident Funds) Law of August 2015, the matter has recently been resolved.

On 21 October 2014, the Haifa District Court handed down its decision in “Yael Zor v the Tax Assessor Haifa” concerning temporary residency abroad. The case relates to a senior employee of a multinational enterprise the shipping company, Zim, who worked in Hong Kong for a subsidiary of the group from January 2006 to August 2008. 

The Israel Immigration Authority recently published a new, experimental, streamlined procedure for issuance of work visas for foreign experts, allowing the holder to work in Israel for up to 30 days over a 12 month period.

Previously, multinational companies that wished to send professionals to Israel to work with their Israeli R&D centers or strategic partners for short periods of time were required to apply for and obtain a work permit (from the Ministry of Economy) and then a work visa at an Israeli consulate abroad, all before entering Israel.

Under the new procedure, application for a work permit for an expert employee will be expedited, with full processing completed within 6 days in most cases.  Once the work permit is granted, the expert may enter Israel as a tourist, provided that he or she reports to the Immigration Authority within two business days of arrival, where the tourist visa will be converted to a work visa.

This new process should lessen the burden on multinationals or non-Israeli acquirers that require their expert employees to supervise operations in Israel, and it allows these companies to send their experts to Israel on an urgent basis.

An amendment to the Minimum Wage Law was recently promulgated, which will be gradually applied with reference to four periods. The first period begins on April 1, 2015, when the minimum wage is to be updated to NIS 4,650 (gross). The first update must be made in the April 2015 wage, which is payable at the beginning of May 2015.

All employers in the economy, including employers who are not employing employees at minimum wage, must specify the minimum wage rate in all pay slips. As a result, pay slips must be revised accordingly.

Pursuant to the law, for the purpose of calculating compliance with the minimum wage, base wage/combined wage, cost of living increases and permanent allowances being paid to employees on account of their work must be taken into account.

The subsequent minimum wage updates shall be as follows:

Ÿ     On April 1, 2016, the wage shall be updated to the higher of NIS 4,650 or 47.5% of the average wage in the economy as it shall be on that date.
Ÿ     On July 1, 2016, the wage shall be updated to the higher of the wage during the second period or NIS 4,825.
Ÿ     On January 1, 2017, the minimum wage shall be updated to NIS 5,000.

If you need additional details or advice regarding specific circumstances, feel free to contact our Labor Law Department.