By: Kan-Tor & Acco Law Office | Experts in Foreign Worker and Expert Mobility Law
In recent years, especially in light of the growing shortage of labor in the construction, industrial, and agricultural sectors, many employers in Israel have turned to the “private recruitment” channel to bring foreign workers from abroad. This process, which allows bringing workers from various countries of origin (subject to bilateral agreements or specific government decisions), requires a significant investment of resources, time, and money on the part of the employer.
However, many employers find themselves facing a serious setback when the worker decides to “disappear,” “quit,” or “run away” shortly after arrival or during employment. For the purpose of this discussion, we will refer to this phenomenon colloquially as the “runaway phenomenon,” even though in some cases the departure may be justified (inadequate housing, unpaid wages, etc.). The result of worker runaways creates double damage for the employer: the loss of labor and recruitment investment, and the freezing of deposit funds held by the state.
This article examines the phenomenon, the legal framework, and proposes the recommended legal approach for releasing the frozen funds.
Private Recruitment and Bringing Workers to Israel
Employing a foreign worker in Israel is a complex bureaucratic process. Employers must demonstrate compliance with eligibility criteria, obtain work permits from the Population and Immigration Authority, and pay various fees and levies. The ultimate goal is to address labor shortages while protecting workers’ rights and complying with state law.
Who is a “Runaway” and Why Do They Leave?
A “runaway” is a foreign worker who enters Israel legally through one of the existing channels and is employed by a specific employer, but at some point abandons their workplace without prior notice and without legal arrangements regarding their status with the new employer or authorities.
The reasons for leaving (“running away”) are usually economic:
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Wage incentives: Many workers are tempted to work for “pirate” employers or subcontractors offering higher cash wages (“under the table”) without taxes or insurance.
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Cost-saving: Pirate employers do not pay fees and levies, allowing them to offer higher net wages at the expense of legality.
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Misinformation: Sometimes workers are misled by acquaintances in the foreign community who promise easier or more profitable work outside the legal framework.
Can and When is a Worker Allowed to “Run Away”?
It is important to clarify a critical legal and ethical point: in Israel, workers are not bound to an employer as they once were. The principles of freedom of occupation and human dignity apply to foreign workers as well.
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Passport retention prohibited: Employers are strictly prohibited from holding a worker’s passport as leverage. Violating this is a serious criminal offense.
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Freedom to resign: A worker cannot be forced to continue working and is entitled to resign with proper notice under the law.
However, “running away” is not an orderly resignation. When a worker disappears without notice, they breach their employment contract and often lose legal status in Israel, since their work permit is tied to a specific employer or sector.
The Deposit Trap: When the Employer Pays for the Worker’s Offenses
One of the main requirements for bringing foreign workers (in certain sectors and cases) is the deposit of a bank guarantee or cash to ensure the worker’s departure from Israel at the end of employment—sometimes tens of thousands of shekels per worker. The purpose of the deposit is to provide a financial source to pay the worker if the employer fails to fulfill obligations, and to prevent an economic burden on the state if deportation becomes necessary.
What happens when the worker runs away?
In the event of abandonment, the employer must immediately notify the Population and Immigration Authority. This step is critical to remove the employer’s liability for employing the worker and to cancel the work permit.
However, the real problem begins here. The employer, who reported legally and is not at fault for the abandonment, seeks to recover the deposited funds. The response from authorities is usually refusal or a long-term delay.
The Absurd Situation: Waiting Years for Your Own Money
According to common practice and certain interpretations of Ministry of Interior procedures, the state refuses to return the deposit as long as the worker remains in Israel (even if they are now illegal). The state argues the funds are needed to cover potential future deportation costs.
These procedures are not published and are generally unknown. In practice, a request for deposit return can only be made in one of two situations:
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The worker leaves Israel.
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A prolonged period elapses (usually three years) from the date of reporting the abandonment.
This situation is intolerable, especially given the lack of procedural transparency. Employers with multiple runaway workers may find themselves with deposit sums of tens or even hundreds of thousands of shekels “frozen” in state coffers for years, despite acting in good faith, legally employing workers, and reporting abandonments promptly. Such delays harm cash flow and unfairly penalize law-abiding employers.
Additional Losses from Abandonment
Beyond the non-return of the deposit, the employer loses recruitment costs, may be left with housing rented to the worker for a year (often non-cancellable), and has limited eligibility for refund of fees (over 8,000 ₪ per worker per year), which depends on specific conditions such as the worker registering with a new employer, permanently leaving Israel, or dying within six months of permit issuance.
Moreover, reporting the worker’s end of employment does not automatically “erase” them from the employer’s quota. As long as the worker remains in Israel and is not legally registered with a new employer, the original employer is blocked from hiring a replacement worker for at least three years, unless an exemption is granted by the Authority’s Exceptions Committee—requiring careful planning before submitting a new employment request.
Kan-Tor & Acco Recommendation: Don’t Wait – Go to Court
Our firm, specializing in foreign worker and expert mobility law, has encountered many cases where employers waited years for funds. We believe this is not an unavoidable fate. In cases where the employer acted in good faith, reported the abandonment promptly, and was not involved in the worker’s departure, there is no legal justification for delaying funds.
Case Study: Deposit Return for Fraud by Foreign Workers
Recently, our firm handled a complex case for a company in the trade sector that privately recruited 30 foreign workers. To understand the employer’s responsibility, consider the numbers: with an average deposit of ~20,000 ₪ per worker, the company had to place ~600,000 ₪ in guarantees with the state.
Shortly after arrival, 17 workers abandoned their housing and effectively “disappeared.” Our arguments in court demonstrated that this was not a normal resignation or labor dispute, but a planned fraud. We proved that the workers came to Israel with malicious intent to leave the employer, using the company merely as a “stepping stone,” while the company, acting in full good faith, bore all economic burdens (flights, fees, insurance, and housing arrangements).
The court accepted our position that law-abiding employers should not be penalized for worker fraud and ordered the immediate release of the specific deposit, even though the workers had not yet left Israel. Key factors in the employer’s favor were lawful employment, documentation of the abandonment, and provision of proper housing.
10 Tips for Employers:
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Ensure agreements comply with the law (special agreements are required for foreign workers) and reflect the nature of employment in Israel.
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Pay employees the wages agreed upon in the permit application and employment contract.
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Never hold workers’ passports; they must remain with the worker at all times.
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Maintain good personal relations with workers; it helps in understanding the situation if abandonment occurs.
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Provide suitable housing per your commitments to the state and workers.
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Consult immediately with a specialized lawyer regarding legal compliance and inspections by the Interior Ministry or Labor Ministry.
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Include an “exit clause” in rental agreements in case workers run away.
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Conduct external audits and document employment and housing conditions.
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Keep all evidence of immediate reporting and attempts to contact the worker.
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Send a strong, reasoned legal demand via lawyer to the Population Authority for deposit release upon notification of abandonment. If the request is refused or ignored, take the matter to court. Filing a petition can compel the state to release the deposit immediately, including reimbursement of fees and legal expenses in some cases.
From our experience, Israeli courts have shown willingness to examine the reasonableness of the Authority’s decision, and when presented with a clear factual picture of a good-faith employer versus rigid bureaucracy, the scales often tip in favor of fund release.
In conclusion: The runaway phenomenon is a “state-wide plague” in certain sectors, but employers should not bear the cost. If you encounter refusal to release a deposit for an abandoned worker, do not wait three years. Seek professional legal advice to explore the possibility of reclaiming your funds—right now.
