Swords of Iron: Unemployment Benefits and Unpaid Leave
The Financial Assistance Program Law, which was legislated and passed on November 9, 2023, includes, inter alia, special provisions regulating payments of unemployment benefits during the period of the Swords of Iron War. The law, passed after a long legislative process, addresses a variety of scenarios relevant to salaried employees and refers to issues, such as shortening of the qualifying period and protected employees.
Highlights of the Financial Assistance Program Law
What is the period during which the special provisions regulating payments of unemployment benefits will apply?
October 7 to November 30, 2023. This period is called the “defined period.”
Are employees on unpaid leave obligated to utilize their accumulated vacation days?
No. Contrary to the legal situation as it was up until now, employees on unpaid leave are not obligated to utilize their accumulated vacation days and this will not diminish their entitlement to unemployment benefits.
What is the minimum duration of unpaid leave that entitles employees to unemployment benefits?
Employees who are on unpaid leave for 14 days will be entitled to unemployment benefits from the National Insurance Institute (subject to additional criteria specified in this update).
What is the qualifying period determining entitlement to payments of unemployment benefits to employees on unpaid leave?
The qualifying period has been shortened to 6 months of payments of National Insurance contributions within the 18 months preceding the unpaid leave. Therefore, if an insured has completed the qualifying period of a minimum of 6 months within 18 months before being sent home on unpaid leave, the employee will be entitled to unemployment benefits.
Can the period of compulsory military service be included in the qualifying period?
No.
Do special provisions apply to employees with disabilities?
Yes. Employees with disabilities will be entitled to unemployment benefits if they accumulated a qualifying period of only 3 months within 18 months. A “person with disabilities” is defined as: any person who is entitled to a disability allowance pursuant to an agreement regarding the payment of a one-time grant for April 2020; any person who is being paid particular pensions; and any person who is entitled to a tax exemption pursuant to section 9(5) of the Income Tax Ordinance.
Do special provisions apply to employees living in an evacuated community?
Yes. Employees who live in a community that was evacuated pursuant to a government decision during the defined period and whose period of eligibility for unemployment benefits expired before or during the defined period will receive an extension of their entitlement to unemployment benefits in respect of the period of their unpaid leave. For such employees, who have exhausted their entitlement to unemployment benefits, the period of eligibility will be extended until the end of the defined period (i.e., until November 30, 2023).
Are employers obligated to pay National Insurance contributions for employees during the period of unpaid leave?
No. Employers are exempted from paying insurance contributions for employees on unpaid leave during the defined period.
Are there any special rules regarding female employees during the protected period of 60 days after their return from maternity and parenthood leave?
Yes. If a female employee is sent home on unpaid leave within the 60-day period during which she is protected from dismissal after returning from maternity and parenthood leave, this interrupts the count of the 60 days of protection from dismissal. For example: a female employee is sent home on unpaid leave for 15 days after having worked 10 out of the 60 days of protection against dismissal after maternity and parenthood leave. Upon her return to work after her unpaid leave, her protection period will restart and be counted as the 11th day.
Can employers dismiss female employees upon their return from maternity and parenthood leave?
Yes, subject to special restrictions, including the obligation to obtain a permit from the director-general of the Ministry of Labor pursuant to the Employment of Women Law. Such a permit will be granted if the dismissal is not related to childbirth, to the period of maternity and parenthood leave or to a related absence, and provided that 60 days have passed since the end of the period of maternity and parenthood leave or her absence.
Are employees over the age of 67 entitled to unemployment benefits in respect of a period of unpaid leave?
No. Employees over the age of 67 will be eligible for a special grant from the National Insurance Institute. The grant will be calculated for employees who were dismissed or sent home on unpaid leave of a minimum of 14 days, and who worked as salaried employees for a minimum period of three consecutive months immediately prior to the month during which their employment was discontinued. The grant will be at the rate of 75% of their wages, divided by 90, but will not exceed ILS 134 per day, multiplied by the number of days per month in which the employees were unemployed.
Can employers force unpaid leave on their employees without their consent?
No. Employers are still obligated to obtain their employees’ consent to be sent home on unpaid leave. Pregnant women and women undergoing fertility treatments may not be sent home on unpaid leave without obtaining a special permit from the director-general of the Ministry of Labor pursuant to the Employment of Women Law. The law also prohibits employers from sending additional protected employees home on unpaid leave (such as employees who reported for military reserve duty).
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Barnea Jaffa Lande’s Labor Law Department is at your service to answer any questions about unpaid leave during Swords of Iron, or about wartime labor law.
Adv. Netta Bromberg is a partner and heads the firm’s Labor Law Department.