By Amit Acco, Partner
In recent years, the phenomenon of foreign workers leaving employers in Israel has become a complex systemic problem that threatens labor market stability, harms lawful employers, and undermines workers’ rights. The phenomenon is particularly noticeable in the construction, caregiving, and agricultural sectors, where dependency on foreign labor is high.
The causes are diverse, including personal motives, economic incentives, and systemic failures. Some workers leave due to poor working conditions, including heavy workloads, unpaid wages, or inadequate housing. At the same time, the black market often offers higher wages, more flexibility, and even encouragement to work illegally – a strong temptation for workers.
Additionally, bureaucratic gaps and partial enforcement mechanisms allow workers to move to the black market without delays or effective supervision. Some workers come to Israel with a premeditated plan to leave their legal employer and work in the informal sector, indicating that the move is planned even before arrival in the country.
Financial Deposit Mechanism and Reform Attempts
Proposals have been raised in the Knesset and government ministries to expand the financial deposit mechanism, where the employer deposits money on behalf of the worker to create a financial incentive to remain within the legal framework. Proposed legislation includes a requirement for employers to deposit a certain sum at the start of employment, released only at the end of the legal work period or upon orderly termination according to the employment contract.
The deposit mechanism is intended to ensure workers receive their full rights and reduce incentives to flee to the black market. Discussions around the deposit also emphasized the need for a management and oversight system to secure the funds and prevent abuse.
Concerns have been raised that this requirement could burden small employers and delay the recruitment of new workers. Nevertheless, partial consensus has been reached that the deposit is an essential tool for stabilizing the labor market and encouraging lawful employment.
Steps for Employers When a Worker Leaves
When a worker absconds, employers have several options to minimize financial losses:
- Legal Action – Employers can file a claim for breach of contract and compensation for losses caused by the worker’s unilateral departure.
- Government Agencies – Employers can approach relevant ministries, such as the Ministry of the Interior or the Ministry of Labor, to explore possibilities for partial reimbursement of the deposit or fees paid to the state in good faith.
- Private Insurance or Guarantees – Pre-employment guarantees can secure reimbursement in the event of worker absconding.
These measures allow employers to mitigate financial damage and create an additional protection mechanism.
Economic and Social Implications
The consequences of this phenomenon are extensive, affecting the economy, society, and real estate:
In the construction sector, employee departures impair contractors’ ability to meet project deadlines, causing delays, additional costs, and operational chaos. In housing costs, replacing absconded workers adds to project expenses, ultimately passed on to residents.
Workers’ rights are significantly affected, as undocumented workers are exposed to exploitation and lose social rights and the opportunity for orderly return to their home country. The state struggles to monitor the number of foreign workers, enforce the law, and maintain sustainable and transparent policies, weakening lawful employers’ trust in the system.
Committees, Regulation, and Enforcement
A special committee in the Knesset examines foreign workers, focusing on absenteeism and absconding from legal employers. Discussions revealed that some workers arrive in Israel with pre-planned strategies to abscond. The system currently does not provide sufficient incentives to prevent the move to the black market.
The government has approved regulatory changes to facilitate the recruitment of workers for the construction sector, including the removal of certain professional screening steps in private frameworks. However, concerns remain that bringing in additional workers without addressing absenteeism could replicate the problem.
The financial deposit issue is part of ongoing discussions, with proposed reforms aiming to ensure the deposit serves as a real incentive for workers to remain within the legal framework until the end of their employment. Additional mechanisms, such as worker support and guaranteed social rights, have also been proposed, ensuring transparency toward employers.
Conclusion
The phenomenon of foreign workers leaving legal employers to work in the black market is a broad systemic issue, affecting lawful employers, weakening state authority, increasing construction costs, and impacting the real estate market.
Only a combined approach, including strict enforcement, financial deposit mechanisms, and strengthening worker rights, can stabilize the labor market, protect workers’ rights, and safeguard national interests.
