By Amit Acco, Partner |
A foreign expert working in Israel shall be paid a gross monthly base wage that is not less than double the average gross wages of a salaried employee (in 2021: 20,800 NIS per).
Base wage is defined in the regulation:
“base gross wages for a regular position before any payment for overtime or additional shifts. Calculation of additional payment by an employer to its employee for overtime shall be based on the aforementioned base wages.”
Within the application for a Permit to Employ a Foreign National Expert, the following guidelines provide:
“No deduction shall be made for adequate accommodations or any additional sums, and no deduction shall be made for medical insurance…” (See foot note 1 below for further details)…Payment of part of the wages with food and beverages supplied to the expert employee at the place of work” (See footnote 2 below for further details)
Although not mentioned in the regulation, it is understood from both practice and discussions with Ministry officials that any ongoing monthly addition to the base salary can be part of the calculation, if:
- is being paid to the Foreign expert during the whole period of his/her work in Israel, and
- the payment is unconditionally paid (for example: not a bonus for achievements if any or additional hours of work), and
- the sum appears clearly in the payslip and is fully taxable.
Evidence Required of Prevailing Wage
The signatory on behalf of the employer should confirm that the company can and will pay the foreign national the prevailing wage.
The CPA (internal CPA works for the company or External CPA) should confirm that the prevailing wage can be paid by the company and was indeed paid (extension case, following payslip audit).
Common Practice in Israel
Israeli companies follow the regulation strictly, as the ramification of no compliance is severe: Heavy fines, cancellation of work permit, blacklisting of a company, etc. For ensuring compliance, the companies normally appoint an accountant (either internal-inhouse or external) to verify the salaries and audit them.
Companies also conduct periodically mock inspections to verify compliance.
Footnotes:
1″beyond the sums specified in the valid Foreign Workers Regulations (Prohibition on Unlawful Employment and Securing Adequate Conditions) (Rate of Deduction from Wages for adequate accommodation), 2000, and Foreign Workers Regulations (Prohibition on Unlawful Employment and Securing Adequate Conditions) (Rate of Deduction from Wages for Medical Insurance Fee), 2001. “
2 “shall be made only after obtaining the written consent of the employee, and shall not exceed the market value of such food and beverages based on receipts, and such payment shall be made in accordance with the Wages Protection Law, 1958.”
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