Israel 2021 Labor and Immigration Annual Report

2021 Israel Annual Report

This 2021 Israel report was contributed by Kan-Tor & Acco law firm to the International Bar Association Global Employment Institute’s 2021 Annual Global Report. 

I. Immigration and Talent

A. Skills Shortage and Changing Skills Requirements
1. Is there a skills shortage in your country?

Yes.  Mostly in Science, technology, engineering, and mathematics (STEM), blue-collar professions, agriculture, construction, infrastructure, caregivers. 

The shortage in the STEM profession has been a result of the high demand from the vast high-tech community and the hundreds of R&D centers of leading global companies coming to Israel in the race after talents.

The shortage of blue-collar employees has been a result of the low salaries in these professions and occupations. It has also been a result of the current legislation and regulations that prevent the entrance of potential employees into the country.

 

2. How is the government responding to any skill shortage?

Israel has expanded the support in STEM studies and has set a goal to double the number of students in these professions. The Ministry of Education in Israel is working to expand mathematics and science studies at an earlier age – with an emphasis on high school.

Additionally, higher education institutions can receive grants and incentives to teach STEM and recruit more students from defined groups that traditionally had a lower rate of STEM students such as women, orthodox people, Muslims, etc. The innovation authority launched a program that supports the private sector to participate in a campaign on career retraining.

 

3. How are employers responding to any skill shortage (outsourcing, recruiting foreign workers, training, etc.)?

R&D centers are outsourcing and recruiting foreign experts in STEM under very reasonable regulation and policy. To respond to the skill shortage of blue-collar workers, there is a national annual quota that the government meets with specific regulations regarding each profession.

 

4. How are the government and employers addressing changes in skills needed in the workplace?

The government has been addressing these changes by adjusting regulations, increasing the quota for certain blue-collar sectors, and implementing the policy specified in the question above.

 

B. Foreign Nationals and Business Visitors
1. What changes have there been to your country’s laws regarding foreign nationals, including the right to obtain permanent residence and changes in the rights and benefits of their family members?

Israeli law grants the right to citizenship only to people of Jewish origin. A Supreme Court ruling has allowed a change in personal status for a spouse in a “Step by Step Process”.

The trend of recent regulations and policies is to extend flexibility in providing temporary and permanent residence to foreign employees and their family members. This includes all health, education, pension, and any other social benefits.

2. Have there been any changes in your country regarding short-term assignments for business visitors (e.g., limits on length of stay, reporting requirements, specific visa obligations), in particular with regard to the COVID-19 pandemic?

Short term assignment can be made either under a HIT visa that is focussed on R&D centers of high-tech companies or under the 45-day working visa that is designed for foreign employees that schedule to stay in Israel for up to 45 days per year. There have been no changes to the B-2 one-year working visa or the B-2 three-month working visa.

As a result of the COVID-19 pandemic, the Israeli government decided to close the Israeli Airport for inbound and outbound flights. Foreign employees are allowed to enter Israel subject to special permission.

C. Refugees
1. Is your country a common destination for foreign populations seeking refugee status?

Yes.

If so, how is your country encouraging the integration of refugees into society and the workforce?

All UN-recognized refugees can be employed by an Israeli employer. Refugee employees are entitled to all rights and benefits specified in the Israeli labor law such as wages, health insurance, pension, etc.

2. Have refugee / migration flows changed due to the COVID-19 pandemic? If so, in which way?

The incoming of foreign employees has practically come to a stop. The government automatically extended most kinds of work permits without the need to file an extension application.

II. The Work Environment

A. Work-Life Balance
1. What changes have there been in your country’s laws that are intended to have an impact on flexible working practices, including remote working and flexible hours?

Many employees went on unpaid leave due to the COVID-19. There were no special changes in legislation regarding flexible working practices, however, employers have shown flexibility.

2. Are employers applying flexible working practices to a greater degree?

Many employers allow relatively flexible working hours, as well as the ability to work from home with shorter working days for parents with toddlers.

3. What types of flexible working arrangements are most common in your country?

A.    Flexibility in working hours.

B.    Shorter days for young parents.

C.    More employees are working from Israel on self-relocation.

4. Are employees entitled to remote working / flexible hours due to the COVID-19 pandemic (e.g., to ensure childcare while schools and nurseries are closed)?

Yes, employers have allowed flexibility for the care of children. This phenomenon has been common while schools and nurseries have been closed.

5. Have there been any changes in legal rules or corporate practices regarding the “right to disconnect” from work (i.e., certain hours or days when an employee is not obligated to monitor or respond to work communications)?on Title

No changes have been made.

6. Have there been any changes in the rules relating to maternity, paternity, or dependents?

The Israeli law extended the maternity leave for women for up to 26 weeks and granted women the right to receive maternity allowance at the level of their salary for up to 15 weeks. In addition, men have been given the right to paternity leave as well and can use it to replace their spouse in the remaining period following the first six weeks after the birth. 

7.Are employers receptive to paying enhanced benefits over and above their legal obligations?

It depends on the corporate policy, the sector, and the seniority of the individual. In the public sector, it is not receptive to paying enhanced benefits above their legal obligations.

B. Alternative Work-Force
1. Have there been any developments relating to the use of temporary workers, including independent contractors, agency workers, the “gig” economy, and crowd-working schemes?

No additional developments have been made, however, the trends of employing freelancers and independent contractors is steadily increasing.

2. Have regulations been enacted to ensure adequate payment, working conditions or social security (insurance) for “gig” economy workers?

No developments have been made but the situation remains quite reasonable to that extent.

C. Stress and Mental Health
1. Have there been any legal developments or employer-led changes in response to employee stress and mental health issues resulting from the Coronavirus pandemic, in particular with a view to remote working?

Almost none at all in the private sector. In the public sector, there have been short strikes as a protest to the increase of work due to the pandemic. An example of this has been in the public laboratories.

2. What legal changes have there been in relation to collective bargaining, freedom of association, strikes, or other industrial action?

No recent legal changes have been made in the above relation.

3. Did COVID-19 have an impact on the level of employee organization / union membership?

There has been no special impact. Traditionally unions are quite strong in Israel and that continues to be the situation during COVID-19.

D. Collective Bargaining
1. Have there been any significant strikes or other organized employee/industrial action in the public or private sectors?

No legal developments have been made in that regard.

2. Have there been any legal developments or employer-led changes in response to employee stress and mental health issues unrelated to the Coronavirus pandemic?

No legal developments have been made in that regard.

E. Remuneration
1. Has a statutory minimum wage been introduced or modified in your country?

There is a statutory minimum wage in Israel of about 1,500 Euro. No modifications have been made during the pandemic.

What effects on the labor market can you identify in this context?

The major effect in this regard is that the government has been paying relevant employees that are not working an unemployment compensation up until June 2021.

2. What changes have there been with regard to gender equality in remuneration, including legislation addressing the gender pay gap and the reporting of gender pay disparities? Are such laws showing effect?

The law in Israel ensures gender equality in all aspects including remuneration. There has been no reporting of gender pay disparities.

3. What trends can you identify in terms of remuneration models and compensation structure?

There is a focus on the differences in payment between males and females who hold the same position.

4. Since the introduction of post-financial-crisis regulations, have there been legal developments regulating financial institutions and their executives?

Yes. The authorities have implemented “stress tests” on banks, insurance companies and pension funds. In addition, there was an increase in self-capital required.

5. Have there been changes with respect to executive remuneration (e.g. CEO pay ratio, etc.)?

Yes. In the financial sector, there is a limitation on remuneration to senior officials of approximately $1M per year. There has also been an increase in discussions regarding the pay ratio of senior officials in public health companies.

 Are laws on executive remuneration enforced and, if so, how – by the government, or in the courts?

Yes. They are enforced by regulatory officials.  

6. What remuneration related changes have there been, if any, with regard to the COVID-19 pandemic (e.g., remote working packages, special bonuses, salary cuts)?

No special remuneration has been made due to the COVID-19 pandemic on a broad scale. Few changes have been made by employers in special or personal circumstances.

If workforces become more agile due to COVID-19, is geographic location still a relevant factor for determining pay?

Due to Israel being a very small country, there have been no additional differences due to COVID-19. Salaries in the Tel Aviv area are traditionally higher than in the country-side, and this continues to be the case.

F. Corruption and Whistleblowing
1. Have there been any legal or employer changes to address corruption and bribery in the workplace, including whistleblowing procedures? Have these been effective?

There have been no major changes in legislation, however, there is a persistent increase in enforcement and level of punishment. Enforcement and punishment have been quite effective in public opinion.

2. Have there been any legal developments or employer-led changes in response to employee stress and mental health issues unrelated to the Coronavirus pandemic?

No legal developments have been made in that regard.

G. Privacy
1. Have there been any legal or employer changes related to privacy, surveillance, data protection, and the use of social media in the workplace?

No special developments regarding these matters. The use of social media in the workplace has increased mainly due to employees working remotely because of COVID-19.

H. Human Rights
1. Please describe any developments related to the protection of human rights in the workplace, including legal requirements and employer practices.

Israel has legislation to protect human rights in the workplace, which is based on a Basic Law – “The Law of Human Dignity and Liberty” – which is part of Israel’s “constitution”. There have been no new developments in this field recently.

 

I. Discrimination
1. What changes have there been in laws on discrimination in the workplace by reason of gender, sexual orientation, age, race, ethnicity, religious belief, or disability?

In January 2021 the High Court of Justice (HCJ) ruled that the ban on the introduction of certain foods to hospitals constituted a violation of patients’ rights to freedom of religion and privacy.

2. Do employers in your country provide training to their employees about workplace discrimination laws?

Workplaces make this information accessible by posting information about the rights of workers in the workplace that include the name of the official in charge of these issues and include information regarding the appropriate address for filing complaints.

Do employers generally comply with anti-discrimination laws?

Yes. Several nonprofit organizations offer assistance when required.

J. Diversity and inclusion
1. Have there been any developments in law or employer practice relating to the imposition of government quotas or targets for gender parity, including board membership, or employment of individuals with disabilities?

There is legislation and regulation in place for gender parity in the public sector and government-owned companies and institutions. Public companies are also expected to have a certain volume of female directors.

The Ministry of Labor, Welfare, and Social Services promotes assistance programs to integrate people with disabilities into the labor market. The programs offer assistance to employers while focusing on maximizing the employee’s capacity. This is done to increase the number of employed persons with disabilities while improving the standard of living, wages, and working conditions.

2. To what extent do employers in your country make accommodations for religious practices or beliefs?

Israel is a nation where most of its residents hold religious beliefs and therefore Israel makes room for religious practices. For example, there are prayer places for Jews and Muslims at the hospitals and Kosher kitchens and dining rooms at workplaces, etc.

3. Have there been any other changes in law or corporate practices designed to increase diversity in the workplace?

The number of women serving as directors in the public and private sectors has increased and courses are being held to encourage women in management positions. Several professional training programs focus on training Arabs, women, and orthodox Jews in hi-tech and other professions.

K. Sexual Harassment
1. Have there been any changes in laws or employer practices regarding sexual harassment in the workplace?
  1. workplace?

There are practices to prevent sexual harassment in the workplace. Government organizations have prohibited romantic relationships where there is a subordinate relationship.  By legislation, every employer with over 25 employees has to appoint a Sexual Harassment Officer and publish his/her name and contact details.

Free legal aid is offered by NGOs, and the police have trained officers to deal with these types of complaints.

L. Sustainability / ethical business
1. Have there been any changes in laws or employer practices regarding sustainability / ethical business / green behavior in the workplace (e.g., anti-modern slavery regulation, corporate social responsibility initiatives)?

The Ministry of Economy and Industry and the Ministry of Environmental Protection have formulated a national policy for green growth using six levers. Policies are required to ensure effectiveness and efficiency.

 

There is a growing trend of public health companies to add impact reports on those aspects in their annual reports to encourage investment. However, certain investment companies have announced that their policy is to invest in SDG companies only.

M. Technology / Artificial Intelligence
1. Has there been an increase in employer reliance on artificial intelligence / workforce analytics software in your country?

Yes. Mainly in the hi-tech sector but also in manufacturing food processing, digital health, construction, and education.

2. Have artificial intelligence tools resulted in a loss of jobs or in the creation of new jobs in your country? If so, in which areas / industries?

Not for now, most projects are only at the pilot stage. However, more technologies are being created for areas that are having shortages in the workforce.

3. Have there been any laws adopted in your country related to the use of artificial intelligence?

Most of the laws adopted so far are related to protection of privacy and personal information. More legislation is now a topic of discussion.

4. How is responsible (state / government, employee, employer) for ensuring that employees obtain the skills required in an increasingly digitalized economy? Are there specific programs of government bodies / authorities providing training / support in this respect?

The Innovation Authority plans to expand the outstanding academy, which deals with the field of artificial intelligence which has gone from 70 researchers to about 100 researchers within 5 years.

This was done to improve the government services provided to citizens, productivity in the Israeli industry, and increase security by developing artificial intelligence capabilities.

5. Have you noticed any effects of digitalization / technical systems on employee representation?

No.

III. Separation from Service

A. Termination
1. What changes have there been that affect the ability of employers to dismiss employees? Do employers in your country generally observe these procedures?

There is mandatory legislation in place that requires employers to provide a month’s notice, severance pay, etc. These rights are carefully observed by employees, labor courts, and unions.

2. Have there been any significant changes in relation to enforcement of restrictive covenants and obligations of confidentiality?

All employees that were dismissed from their work have been granted 70% of their salary until June 2021 by the social security authority.

3. Have measures been taken in your country to ease the impact of COVID-19 on the labor market and to avoid dismissals / redundancies?

All employees that were dismissed from their work have been granted 70% of their salary until June 2021 by the social security authority.

If so, what laws and measures have been implemented (e.g., extended furlough schemes, etc.)?

The State of Israel has paid grants to citizens and self-employed individuals during the COVID-19 pandemic.

 

B. Retirement
1. Have there been any legal or employer changes related to early retirement, including the ability to impose early retirement?

There have been no recent changes. It is quite difficult to impose early retirement as the unions protect the employees from it. It can only be done under special circumstances.

2. Have there been government or employer efforts to incentivize employees to work longer due to longer life expectancies, financial need, lack of qualified workers, or other demographic or corporate needs?

There is a public debate on these issues. Several laws have failed in Parliament, but the debate continues. 

3. Are limited public pension funds a concern, and how are the government and employers addressing this issue?

There is legislation that forces employees and employers to save about 16% of their monthly salary in a personal pension fund, which is fully enforced. Two years ago, self-employed individuals and business owners were also required to join this program. 

4. Have there been any developments regarding private (company-sponsored) pension schemes?

There are no company-sponsored pension funds in Israel. Any pension fund should be licensed as such and heavily regulated.

C. Employment Disputes
1. Have there been any changes in the way employment cases before the courts and tribunals are reported, including the power to restrict reporting at the request of the parties?

The labor courts are a part of the Israeli Court System. Restrictions can be made by court order in sexual harassment cases and very few other cases such as when minors are involved.

2. Are employment disputes resolved more often in court or via arbitration proceedings?

It depends on the parties and the case. The majority of personal issues are solved in court, while organizational disputes are solved in arbitration.

3. Is it legal and common to have employment court hearings held by video rather than on site in your country? Have there been changes due to the COVID-19 pandemic in this respect?

Yes. As part of the efforts to reduce gatherings in public spaces to prevent the spread of COVID-19, the courts decided to hold all legal hearings in a visual committee (hearing via video call) as part of a pilot in consensual civil procedures.

IV. Impact of Recent Political and World Events

A. COVID-19 pandemic
1. How has COVID-19 impacted the workplace in your country?

Certain sectors like tourism, entertainment, and restaurants have been practically shut down, while other sectors such as street trade, transportation, etc. have been substantially reduced. In many service sectors, there were certain layoffs and reductions from both full-time and part-time employees.

2. How has COVID-19 impacted the labor market in your country?

COVID-19 has had a major negative impact on the labor market. The unemployment rate went from 3.5% to 22% in a matter of six weeks and slowly reduced to approximately 14% towards the end of 2020.

3. Please shortly summarize the main legislation adopted to address the pandemic's effect on human resources issues in your country?

The main legislation adopted to address the pandemic’s effects on human resources regarded employees who couldn’t continue to work. These employees were granted 70% of their pay by social security authorities. Certain regulations were made to enable employees to withdraw part of their savings without penalty.

4. What global human resources issues have arisen, or do you expect to arise, with respect to the COVID-19 pandemic and the resulting impact on the economy?

The main issue is expected to be how to create new jobs for all the unemployed individuals. Training and initiatives are likely to be involved.

B. Other recent and political world events
1. What global human resources issues have arisen, or do you expect to arise, with respect to current trade conflicts (e.g. USA –; USA – EU) and the resulting impact on the economy?

No special effect is expected at this point.

2. Have you seen labor and employment issues and legal changes in relation to the uncertainties surrounding Brexit, and do you expect additional developments now that Brexit has taken place?

As Israel is not part of the EU, no special effects are expected.

3. Have there been notable human resources issues or regulatory developments in relation to other political developments (on a global and / or regional scale)?

Due to COVID-19, foreign employees from China etc. couldn’t enter Israel which has increased job opportunities for Palestinians.

4. Have you noticed any effects of climate change / climate change-related regulations on the labor market in your country?

There has been no major changes. The water industries and green energy industry have increased their recruitment of new high-skilled employees.

V. Summing Up Current and Future Trends

A. What do you consider to be the top three challenges in the area of human resources law and practice in your country right now?

The main challenge is training orthodox people, women, and Arabs to obtain newly required skills. Additionally, adjusting legislation and training vocal professions is another major challenge. The last major challenge is creating jobs in certain sectors while creating better legislation and regulations for foreign employees.

Is your government considering or implementing any solutions?

The ongoing political crisis and elections have shifted the government’s attention to other directions.

B. Which human resources issues in your country generate the most litigation?

Layoffs, gender rights, and social rights.

C. Which challenges in the area of human resources law and practice do you expect to become more important over the next five to ten years?

It is expected that freelancer’s rights, distance workers, artificial intelligence, retirement age, and other related issues will all become much more important in the future. 

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