By Amit Acco | Partner
This guideline will identify groups of Foreign Nationals (FN) working in Israel, the relevant visa required for the employment of an FN, and the joint responsibility of site owners, contractors, and subcontractors for the FN’s legal status, while the FN works in Israel.
We will provide recommendations as to the steps which should be taken to meet these legal obligations and ensure full compliance with Israeli Immigration laws regarding FN workers.
Relevant Terminology
The following terms are relevant to this immigration guideline:
- Sub-Contractor: a business or person that carries out work at the site for the Contractor as part of the project. The definition includes both Israeli and non-Israeli direct contractors and subcontractors.
- Main Contractor Employees: FN EE’s. Typically seconded to Israel for temporary assignment from their home site, for short or long-term assignments.
- Subcontractor Employees: FN EE’s of subcontractors. Typically employed directly by the subcontractors and sent to Israel for purposes of the project.
- “Work Visa”: B-1 work visa.
- “Site Holder”: the company that is in possession of a closed site
Both Main Contractor’s and the Sub-Contractor’s employees can be found working at the project site.
All FN workers must obtain the correct B-1 work visa to be eligible to engage in employment in Israel. This is regardless of the payroll location, the duration of the assignment, and the specific type of work the FN is partaking in. It should be noted that B-1 work visa categories differ with respect to duration of assignment and salary level.
Although “work” has not been clearly defined in Israeli immigration law, during worksite inspections and border control scrutiny authorities have considered the following as activities that require a work visa:
- Entry to construction restricted areas within a site.
- “Hands-on” work, tools and/or training and/or equipment and/or software engineering or debugging.
- Temporary replacement of an Israeli employee.
Guidelines
1. Main Contractor Employees are being seconded from their homesite to Israel for short or long-term assignments. Main Contractor sponsors these FN’s applications for a B-1 work visa. Upon completing the visa process, the FN may work in Israel at the project site and perform any role outlined in the work permit application.
2. Sub-Contractor FN Employees are employed by subcontractors, placed at the construction site, engaging in design, constructions, inspection, etc.
Sub-Contractors FN workers must hold a valid B-1 work visa. Applications are sponsored, submitted, and maintained by the Subcontractors.
Government Site Visits and Penalties
Inspectors from the Israeli Ministry of Interior may make an announced or unannounced visit to an employers’ facilities, to inspect the legal status of foreign nationals, and/or verify the information contained in immigration petitions.
These inspections are random. During the inspections, it is expected that all FN working on site, including the Contractors and Sub-Contractors’ FN EE’s hold a valid work visa permit that allows them to work at the site.
Main Contractor Responsibility: The Presumption of Employment
Section 5 of the Foreign Employees Law imposes on the officers of a corporation a direct duty of supervision and establishes a presumption for breach of the officer’s duties since an offense has been committed by the corporation.
In the leading case of Yunasof v. State of Israel Request for Criminal Appeal 5068/10 the court placed the presumption of employment responsibility by Site Owners and Contractors on the Subcontractor employees.
Following this judgment, in the Ministry of Trade Industry and Labor v. Barashi Criminal Appeal 23809 the National Labor Tribunal held that the purpose of the law had created another category of employment pattern. According to this purpose, the ruling extended the term “employed” to cases in which workers are in the territory owned or used by the main contractor. In these cases, a presumption arises that such employees are employees of the same main Contractor or landowner unless proven otherwise:
“Whenever an employee is found in a person’s real estate and under his supervision, there is a factual presumption that the employee is employed by him, but this presumption can be contradicted, either by documents proving that the employee is employed by another, or by evidence that refutes the presumption”. (hereinafter: “The presumption” or “presumption”)
The existence of the presumption shifts the burden of proof to the site owner or main contractor.
Rebutting The Presumption of Employment by the Main Contractor
In the case of foreign workers brought to a construction site by a subcontractor who did not have a lawful permit to work, Criminal accusations were brought against the main contractor (who hired the subcontractor). The accusation was made under the assumption that the main contractor was the responsible party in this case.
The main contractor argued that the subcontracted employees had entered into a direct contract with a subcontractor, to carry out the work.
In a detailed judgment, the National Labor Tribunal acquitted the main contractor on the grounds that it had not been proven that the main contractor “employed” the subcontracted workers.
To convict the main contractor of the offenses attributed to them, the State had to prove beyond a reasonable doubt that the main contractor had indeed employed the FN, including (actus reus) and possessed the necessary mental intent (mens rea) to complete the act, in this case, an awareness of the ongoing the illegal employment.
Checking the sub-contractor FN CW’s Work Visa
In the case of Sigma, A manager of the site owner (Car Garage) examined the work visa validity of a FN employee upon arriving at a site. The FN had been assigned to the site by a security contractor (night guard).
The court decided that the action taken by the manager was a reasonable action taken by a responsible manager but did not conclude that examination of a visa implied that the site owner was the employer of the FN.
“The possibility that Shimon was interested in photocopying the visa is in itself logical, in light of the criminal enforcement policy of the prosecuting authorities and the courts regarding the prohibition on employing a foreign worker without a permit, which they saw as “employer”, for the purposes of section 2 (a) 1991, also a person in whose yard a foreign worker is employed without a permit (for example, OP 5068/10 Ofer Yonsoff – the State of Israel, dated 18.1.11). This possibility is also consistent with Mickey’s testimony in his cross-examination, in which he described the functions that Shimon performed in the business, which included hiring employees (Minutes 14.1.20, p. 39, line 7)”
The Law for Increasing the Enforcement of Labor Law, 2011
S.26 of the increased Enforcement Law states that:
The obligation of an employer who is a contractor, towards an employee shall also apply to the consumer of the service (owner or main contractor) for the period the employee was employed in providing the service.
Recommended Course of Action
In case of an inspection and finding of illegal employees of a subcontractor on-site, the main contractor may be required to rebut the presumption of illegal employment either during the inspection, hearing, or criminal law proceedings.
Such an investigation should be well avoided from start by careful visa examination. The ramification of an active investigation by the authorities may lead to the non-issuance of new work permits and the cancellation of existing visas for the main contractor and/or particular subcontractors or the whole project. This process can sometimes take months and can disrupt the project’s sensitive schedule.
As a result, the main contractor should be well prepared for a pro-active defense rebutting the presumption by demonstrating that:
- The contractual relationship between the site owner / main contractor and the subcontractor is sincere, i.e. not made fictitiously for the purpose of providing manpower.
- The contract of employment was made directly between the subcontractor and their employees.
- The main contractor went completely “out of the construction operational picture” under the contract. Getting “out of the picture was described by the Merriam Webster dictionary as: “not involved or playing a part in something: not in the same situation or relationship.
This is a sensitive factual question to be asked in regards to the on-site relation between main contractor and the main contractor’s FN employees: inspection, management, and responsibility. The closer it gets, the more likely it will be construed as a responsibility of main Contractor and vice versa.
Suggested Main Contractor Pro-active measures of Visa Compliance
To avoid a situation whereby a subcontractor is found to have illegally employed FN workers, that may lead to criminal prosecution, non-issuance of new work permits and cancellation of existing visas for the main contractor and/or particular subcontractor or the whole project, we suggest the following proactive measures be taken by the main contractor,
- Audit: the main contractor should make random audits of subcontractors, to verify compliance with visa requirements on an ongoing basis.
- Control: the main contractor shall verify the valid visa status of any subcontracted FN employee entering the site, and upon issuance of the entry badge.
KTA suggests a technological-based service to verify the eligibility of each subcontractor’s employee entering the site while sharing the information of the approved employees to any required system via an advanced secured API system or Advanced Reporting.
The service will be provided for no additional fees to contractors and subcontractors who processed the work visas in Israel via KTA directly or through KTA global partners.
3. Communication with Subcontractors: contractually shift the responsibility of visa requirements to subcontractors while keeping them updated on immigration laws and regulation changes.
4. Organization: try to allocate clear management responsibilities to each subcontractor regarding the work he/she was engaged in providing such that the main contractor is entirely void of all management-related responsibilities until services are rendered.
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