Wartime Financial Assistance Plan: Unemployment Insurance

Many businesses in Israel are experiencing steep drops in business activity and revenue as a result of Operation Swords of Iron. In order to avoid layoffs as much as possible, as well as to ensure rapid recovery once the crisis is over, many employers are placing their employees on unpaid leave. By doing so, they lower their business expenses, while their employees might be entitled to receive unemployment benefits.

The experience acquired in Israel during the COVID-19 pandemic provided the groundwork for the creation of a more favorable plan to support employees on unpaid leave, in order to assist businesses experiencing severe financial losses.

Proposed Amendments to Unemployment Insurance

Increasing numbers of employers are laying off employees or placing them on unpaid leave indefinitely in order to save on payroll expenses. These employees will receive unemployment benefits at an average of about 70% of their previous wages, for an approved period.

The proposed amendments to unemployment insurance offer more generous terms than the current provisions of law.

Shorter Minimum Period of Unpaid Leave

Employees placed on unpaid leave for a minimum period of 14 days will receive unemployment benefits, in lieu of the minimum period of 30 days currently prescribed by law.

This temporary provision will provide employers with greater flexibility and enable them to place employees on unpaid leave for shorter periods.

Shorter Qualifying Period

As a rule, employees are entitled to unemployment benefits if they have completed a qualifying work period of 12 months during which unemployment insurance contributions were paid for the last 18 months of employment. The plan proposes to shorten the qualifying period to six months out of the last 12 months for the duration of the temporary order.

Unemployment Benefits to Repeat Unemployed Individuals

Repeat unemployed individuals, i.e., employees who have utilized 180% of the days of entitlement to unemployment benefits over the last four years, will be entitled to the full unemployment benefit. This provision of law currently applies to employees above the age of 40. The amendment proposes to apply this provision also to employees under the age of 40 during the period of the temporary order.

No Effect on Annual Vacation Days

During the period of the temporary order, unemployment benefits will be paid as of the first day of unpaid leave, even if the employee is entitled to vacation days during the period of entitlement. This differs from the current provision, whereby employees receive unemployment benefits only after using up all of their accumulated vacation days.

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Barnea Jaffe Landa is at your service to assist with understanding the nature of the compensation you deserve and to advise vis-à-vis the various authorities. 

Adv. Amos E. Rosenzweig serves as an of counsel at the firm and leads its National Insurance practice.