By Amit Acco, Partner |

According to Israeli law, employers are required to deposit the contributions owed to foreign workers into a designated account. The release of these funds is conditional upon the worker’s departure from Israel.

An amendment to the law in 2005, along with subsequent regulations in 2016, introduced provisions for deducting amounts from the deposit if a foreign worker remains in Israel after their visa expiary date. After a period of six months, the entire deposit may be fully forfeited. The primary purpose of this mechanism is to ensure that employees leave the country once their visa expires.

In recent decision of the High Court of Justice, reviewed the legality of forfeiting employee benefits for foreign workers upon the expiration of their visas. This article examines the legal framework surrounding this practice, the court’s majority decision, and the subsequent implications and its connection to current protests against the government suggested legal reform. The aim is to provide a comprehensive analysis of the decision and its potential impact on foreign workers and their rights.

This practice that enforces the forfeiture of employee benefits in cases of visa expiration, was challenged in the High Court of Justice by two affected foreign employees. In a majority decision, the court ruled that the government cannot solely base the decision to forfeit pension funds on an individual’s failure to leave the country and overstaying their visa. Moreover, the court declared that this provision, known as the “deposit law,” infringes on the constitutional right to property in a disproportionate manner.

Judge Sohlberg, in his minority response, argued against invalidating the law. He contended that foreign workers are aware that their deposit is awaiting them upon leaving the country, and the penalty associated with forfeiture serves as a deterrent, making them aware of the consequences if they overstay their visa.

Implications and Calls for Legal Reform: Israel’s Minister of National Security, Itamar Ben-Gvir, who is also the leader of the right-wing Otzma Yehudit (Jewish Strength) Party in the Knesset, expressed disappointment with the High Court’s rejection of the law. He stated that this decision highlights the necessity for legal reform to encourage foreign workers to leave Israel, and urged prompt action in this regard.

The High Court of Justice’s decision to invalidate the provision on the forfeiture of employee benefits upon visa expiration has sparked a debate regarding the rights and obligations of foreign workers in Israel. While the majority decision focused on protecting the constitutional right to property, the minority response emphasized the deterrence aspect of the provision. The implications of this decision and the subsequent calls for legal reform highlight the ongoing discussions surrounding the treatment of foreign workers and the balance between immigration control and workers’ rights.