By Amit Acco, Partner |
Employing a foreign worker in Israel is similar to employing an Israeli worker when it comes to wage deductions. However, the worker’s consent must be obtained in the employment contract for the following deductions:
- Income tax
- National Insurance – The foreign worker is not considered a resident of Israel for National Insurance payments. Additionally, Thailand does not have a social security agreement with Israel.
- Part of the health insurance expenses – up to one-third of the amount spent or committed by the employer.
- Part of the housing expenses – according to the place of residence, the amount of the expense – up to the legal ceiling:
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- Jerusalem: 492.39 NIS per month.
- Tel Aviv: 559.90 NIS per month.
- Haifa: 373.30 NIS per month.
- Center: 373.30 NIS per month.
- South: 331.86 NIS per month.
- North: 305.34 NIS per month.
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- Deduction for health insurance housing: up to 25% of the salary.
- Reimbursement of flight expenses against an invoice and proof of payment with the worker’s prior consent.
- Advances and loans made against an agreement and the worker’s consent to their deduction.
- Any other deduction agreed upon with the worker (e.g., damages to the apartment).
Additional Deductions:
- Pension Insurance (Optional):
- Employers can deduct up to 6% of the worker’s salary for pension insurance contributions, but this requires the employee’s agreement. If not agreed upon, only the employer’s contributions will be made, and no deduction will be taken from the worker’s salary.
- Union Membership Fees:
- Deductions for union membership fees or organizational dues depend on whether the foreign employee is a member. These fees can be deducted if established by an extension order or collective agreement
What are the Foreign Employee Social Security Rights:
The social security rights granted by the National Insurance Law [Consolidated Version] 1995 (hereinafter – the law) are mainly given to residents of Israel. A foreign worker, by definition, is not considered a resident of Israel, as detailed below. However, according to the provisions of the law, every foreign worker is insured in the following insurance branches (even though they are not residents of Israel):
A. Work Injury Insurance, according to the provisions of Chapter E of the law; this branch insures the worker and their family members in case of a work injury, under conditions similar to those applicable to an Israeli worker. It should be noted that work injury insurance also includes a wide range of benefits in kind (medical treatments, rehabilitation, etc.), and not just monetary benefits (this is of great importance, as the legislator sought to deny benefits to those staying in Israel illegally – see below).
B. Employer Bankruptcy or Insolvency Insurance, according to the provisions of Chapter H of the law; this branch ensures, subject to the limitations set by the law, the payment of the worker’s salary and the payment of social security contributions to a provident fund, when the employer is unable to meet their obligations towards their employees. Here too, the insurance conditions are mainly similar to those of an Israeli worker.
C. Maternity Insurance, according to Chapter C of the law; under this insurance branch, a foreign worker or the wife of a foreign worker employed in Israel is entitled to: i. Hospitalization grant (a grant paid to the hospital where the mother was hospitalized, to cover hospitalization expenses). ii. Birth grant (a grant paid to the mother in the hospital, funded by the National Insurance Institute). iii. Birth allowance (an allowance paid for 9 months to those who gave birth to two or more children in one birth).
The three aforementioned benefits are paid to a foreign worker or someone married to a foreign worker, even if she is not employed herself. The insurance conditions are similar to those of Israeli residents, with two exceptions – for the foreign worker, it is required that the birth occurred in Israel, and that the mother (or her spouse) has at least 6 consecutive months of employment in Israel. This is explicitly stated in the provisions of Section 40(a) of the law.
iv. Maternity Allowance (a benefit intended to replace the worker’s salary); this benefit is paid only to those who were employed in Israel for the minimum period required to create eligibility, under conditions similar to those required of an Israeli worker.
D. Child Allowance, according to the provisions of Chapter D of the law; the payment of the allowance is enabled by the provisions of Section 65(a)(2) of the law, which states that even “an individual residing in Israel” will be considered insured for the purposes of Chapter D (even if they are not a resident of Israel). Although the original purpose of the provision insuring “an individual residing in Israel” was different, it is currently used for the payment of child allowances for the children of foreign workers, as mentioned. However, it should be noted that the number of beneficiaries of the allowance in this regard is minimal and estimated at only a few dozen. This is because eligibility for the allowance is conditional on legal residence in Israel (see detailed reference below), and due to the fact that most foreign workers legally residing in Israel do so without their children.
Right to Health Services:
Since a foreign worker is not considered a resident of Israel, he/she is not insured under the National Health Insurance Law, 1994 (hereinafter – the Health Insurance Law). However, under the authority granted by the Foreign Workers Law (Prohibition of Illegal Employment and Ensuring Fair Conditions) 1991 (hereinafter – the Foreign Workers Law), the Minister of Health issued an order establishing a detailed and mandatory arrangement for the insurance of a foreign worker in Israel, within the framework of private health insurance.
In addition to the above, a foreign worker is entitled to the rights granted by the Patient Rights Law, 1996, which are not conditional on residency (naturally, these are very limited rights, and in medical situations requiring urgent intervention).
