Hire in Israel

EOR in Israel

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Israel, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Israel ―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in Israel and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs. 

Hiring in Israel

Among the many statutes governing the employment relationship in Israel are the Wage Protection Law, the Annual Leave Law and the Advance Notice for Dismissal and Regulation Law. The Basic Law: Human Dignity and Freedom and the Basic Law: Freedom of Occupation are also important underpinnings of Israeli labor law.

A written employment contract is not specifically required for Israeli nationals. In the case of foreign employees, however, the employer must provide each worker with a written copy of the employment contract in a language that the employee understands. 

Employment contracts in Israel

As you look to hire employees in Israel, here are some standard regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

Working hours

The regular workweek, which typically runs from Sunday to Thursday, is 42 hours. In workplaces that work five days a week, the number of hours per day is 8.6 hours for 4 days and 7.6 hours for the remaining day. The Ministry of Industry, Trade, and Labor must approve any schedule that involves longer hours.

A break of no less than eight hours must divide one working day from the next. Additionally, most employees must be given a weekly rest period of at least 36 consecutive hours, which for Jewish workers must include the Sabbath—sundown Friday to sundown Saturday—and for non-Jewish workers must include Friday, Saturday, or Sunday, whichever is the standard day of rest for that worker’s religion.

Night shifts cannot exceed seven hours and must be limited to no more than seven nights in total every two weeks.

Employees working a six-day week cannot be employed for more than four hours of overtime per day and 12 hours per week. Employees working a five-day week cannot be employed for more than four hours of overtime per day and 15 hours per week.

Compensation

As you consider the appropriate salary to offer new employees, keep in mind:  

• Effective April 1, 2023, Israel’s standard monthly minimum wage is 5,571.75 shekels.  
• The increased minimum wage also applies to foreign workers. 
• Employers must pay 125% of the worker’s normal wages for the first two hours of overtime in a day and 150% for any hours thereafter.  
• Those who work on a holiday or Saturday are entitled to 150% of their normal pay and a vacation day. 
• Compensation must be paid in full by cash or check at the place of employment or by deposit into an employee-authorized bank account. No other form of payment is permissible unless a collective agreement allows it.  
• Monthly salaries must be paid at the end of each month. 

As your employer of record in Israel, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses

Israel’s labor code does not address mandatory bonuses.

Probationary period

Trial periods range between six months and five years. Often, they are six to twelve months, with the employer empowered to extend them for various periods.

Termination and severance

In Israel, there is no regulation prohibiting employers from terminating employees at any time for any reason, except when unlawful discrimination is involved. In terminating employees, however, employers must provide proper notice or compensation in lieu of notice. In addition, collective agreements and individual contracts can put limits on employers’ ability to terminate employees.

According to the Law on Resignation and Dismissal Notice of 2001, employers or employees seeking to terminate employment must give notice, the length of which depends on the length of service with the employer.

If the worker is on a monthly salary, the following notice requirements apply: 

• One day’s notice for each month for the first six months of service 
• Six days’ notice plus two and a half days for the seventh month to the first year 
• A month’s notice after the first year 

Employee benefits and paid leave in Israel

When negotiating terms of an employment contract with a candidate in Israel, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave

Female employees who have worked at least one year for the same employer are entitled to 26 weeks of maternity leave. The first 15 weeks of maternity leave are paid by the National Insurance Institute. The rest of the leave is unpaid. Pregnant employees who have worked less than one year are entitled to 15 weeks of maternity leave only.

Up to seven weeks of maternity leave may be taken before the estimated due date. Maternity leave may be extended for such circumstances as multiple births or hospitalization of the new mother or the baby.

A birth grant also is paid within a month after the birth to help with some of the baby’s initial expenses.

Vacation

Employers in Israel are required to grant employees between 13 and 21 days of paid vacation, the amount depending on workers’ length of service with the same employer. An employee must take at least seven consecutive days off in any given year but can carry over the remaining leave days into the next two years.

Employees may not choose to take pay in lieu of leave, but upon termination, they are compensated for any unused leave they have earned.

Employees forfeit their right to be paid for leave if they work for pay for another employer during the leave period.

Holidays

Workers are entitled to nine paid holidays per year.

These can be the Jewish religious holidays or, in the case of workers of other faiths, holidays related to those religions. While about 75% of Israelis are Jewish, there is a large Muslim population and a smaller number of Christians. Jewish holidays follow a lunar calendar, so the date of the observances varies each year. They are observed from sundown to sundown.

Of the Jewish religious holidays, only the first and last days of Sukkot are national holidays.

Sick leave

Under the Sick Pay Law, employees who miss work due to illness are entitled to paid leave starting with their second day of absence. The maximum amount of paid leave depends on their length of service with their present employer. The benefit is 50% of an employee’s regular salary for the second and third days missed and 100% of the regular salary after that. Employees accumulate one and a half sick days per month of service with their employers (18 days per year) up to a maximum of 90 days.

Compensation for sick leave up to 90 days is borne by the employer. After 90 days the leave may be payable by an insurance company, disability insurance, pension fund, or the National Insurance Institute depending on the circumstances.

Health coverage

The National Insurance Institute provides social security, including disability insurance, health insurance, long-term care, maternity benefits, unemployment insurance, child allowances, and old-age and survivors’ pensions.

Employers, employees, and the government contribute to the system. Some benefits are paid on an earnings-tested basis.

Additional benefits

In addition to healthcare benefits, employees in Israel are entitled to pension, which is funded by government tax revenues, as well as workers compensation, which is covered through mandated employer insurance.

Employer social costs will cover a large portion of employee benefits in Israel, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance if needed.

Updated: January 11, 2024 

Employee onboarding with an employer of record in Israel

We write and validate all local employment contracts, streamlining the onboarding process for you and your Israel employees—all you have to do is provide relevant information and review and approve the employment agreement. As your employer of record in Israel, we will:   

• Schedule a welcome call to discuss HR and employment information for Israel, as well as answer any questions 
• Prepare a customized employment contract in English or other local language 
• Share the employment contract and benefits information with the new employee for signature and review 
• Gather tax and banking information from the employee to set up payroll 
• Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll 

The entire onboarding process for the employee is often completed in as little as two weeks. 

Partner with Safeguard Global as your Israel employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution, to expand and hire in 170+ countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Israel. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.  

Disclaimer

The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.