payroll

Oct 2010 AACI mini seminar a huge success !

Moshe

AACI mini seminar – huge success !

Submitted by Moshe on Tue, 23/11/2010 – 10:14

The October 2010 mini-seminar at AACI Jerusalem had a wonderful turnout of over 30 people !

The feedback I received was that it was informative and precise and interesting. All of the attendees felt that they gained important knowledge and were glad they attended.

I want to personally thank each and every one of the attendees as well as Josie Arbel and Sheila Bauman of the AACI who organized the event. Without their dedicated work it would not have been possible !

Moshe

Order and enforcement of labor laws

Moshe

Order and enforcement of labor laws

Submitted by Moshe on Tue, 23/11/2010 – 00:12

 

The Administration of order and enforcement of labor laws takes a lot of action in implementing the directives of the labor laws in the State of Israel. The Labor laws, whom the administration has been trusted with enforcing, are defined as protective laws, that make up the legal infrastructure of the Israeli employment market. the purpose of these laws is to set a minimum Raff and to determine basic social rights for employees. These rights are expressed in setting employment terms for employees, that come to ensure a person’s honor, his ability to self fulfillment, equality, division of justice and more. A good portion of these laws have considerable financial significance and they increase the minimum wage to be paid to an employee, with aim to ensure a relatively appropriate standard of living in exchange for his work.

The Administration, as both the professional and authorized agent, coordinates under it’s auspices the enforcement of 19 labor laws, and locating violators and minimizing the detrimental treatment of salaried employees in the lower pay scales.

Goals:
1) Implementation of labor laws via efficient and effective mechanisms of
licensing and enforcement.
2) Creating and establishing practical basis for cooperation with internal and
external enforcement partners.
3) Intensifying both employer and employee awareness to directives of labor
laws within the administration’s responsibility.

The administration’s actions, both criminal and administrative are accompanied, guided and handled by the legal bureau of the Ministry of Industry, Trade & Labor.

Please note that while all complaints are followed through, a complaint may not necessarily solve your own personal issue with the employer and further action by you may be needed.

The administration can be contacted as follows:

Voicemail for complaints: 1-800-354-354 (can be done anonymously)
Tel: 03-622-3116
Fax: 03-682-8690
Email: achifa-ma@moital.gov.il

The administration of order and enforcement of labor laws
Derech Salameh 53
Tel-Aviv

Collective agreements and how they affect you

Moshe

Collective agreements and how they effect you

Submitted by Moshe on Tue, 09/11/2010 – 21:40

Most of the terms of employment are set not by law, rather by collective negotiating, thereby determining that the collective agreement is the basis for employee’s rights and duties.

The arrangements in collective agreements can be best characterized by the fact that they are not uniform. In each collective agreement one can find a different arrangement which is the fruit of collective bargaining. From the non uniformity of rights in collective agreements one can learn that not only are the span of rights different , but there are large groups of employees who do not share the same rights.

So, what is a collective agreement ?
They can be effectively divided into 2 types:
1) General Collective agreements
These are reached & signed by organizations that represent factoriesemployers in a certain field (such as: construction, textiles, diamonds, hotels, electronics, etc.) or in all fields (cost of living increase, travel expenses, Havra’a payment) and the liason office of general organizations and the worker’s union (histadrut) that represents the employees in a certain field or sector as well as the government (usually the Finance ministry).
2) Special Collective agreements
These apply to a certain employer and are signed by both the management of the employer and the worker’s union that represents the employees of that employer.

Some collective agreements get issued as a expanded regulations order by the minister of Labor, thereby becoming mandatory for every employer in the State of Israel.
A few examples of this are: travel
reimbursement to and from work, cost of living increase.

When a collective agreement is signed it binds all employees and an employee cannot say that he disagrees and didn’t approve it. That is why there are worker’s unions.

Not always does a collective agreement define the terms of employment. Frequently Small or private employers or where personal contracts are used, the contracts define the terms of employment, However, it should be noted that the personal contract cannot diminish or contradict the rights defined by law or by an expanded regulation order or collective agreement that may apply to the employer due to the field in which he operates. In short, the personal agreement cannot violate the labor laws of the State of Israel or the expanded regulation orders of collective agreements which are treated as labor laws. The personal agreements can however improve the terms in the law or collective agreement.

Even if a personal contract specifies explicitly terms that diminish the terms/rights defined by law, it becomes null and void, even if an employee signs it.

In small places of employment, it was customary to have work agreements based on verbal agreements, which would be always hard to prove. In such cases the law provides the minimum.

Since Jan 2008, when the section 24 of the protection of wages law came into effect, making mandatory written notification to all employees describing their terms of employment and specifying what needs to be written on this notification, verbal contracts have no place anymore.

see my blog post on correction 24:

and the blog post on “what needs to be included on my payslip” :

What happens to unused vacation days ?

Moshe

 

What happens to unused vacation days ?

Submitted by Moshe on Mon, 08/11/2010 – 20:23

If your employer has a policy of erasing unused vacation days that have been accrued, then basically it’s “use them or lose them”.
This is totally legal provided the employer notifies the employees in ample time to allow them to utilize the accrued days.

If an employee has 10 accrued days, the employer can’t notify the employee on Dec 31st that the days will not be carried over to January. He can and should specify this in employee’s contracts or notification of work conditions as well as a reminder in Sept or Oct with the payslip and notification on employee notice boards.

If such policy does not exist then the days are accrued and carried over from one year to the next. This is easily checked as the balance must be listed on the paylsip.

When an employee resigns or is terminated his position, all unused vacation days that have been accrued are paid out on the last payslip.

Mandatory Pension law – updated Sep 7, 2010

Moshe

Mandatory Pension law – updated Sep 7, 2010

Submitted by Moshe on Sat, 09/10/2010 – 23:18

 

The mandatory pension law was recently updated (Sept 7, 2010).
Originally planned for gradual annual updates from 2008 – 2013, when the mandatory % will reach 15% (5% employee, 5% employer and 5% severance pay -employer)

The new revision now ads another year (2014).
Starting Jan 1, 2014 the mandatory pension will be 17.50% as follows:
employee – 5.5 %
employer – 6.0 %
employer (pension) – 6%

The mandatory pension revision also specifies:
1) that it applies to employees who retired at retirement age and receive a stipend from social security (Bituach Leumi).
2) An employee who begins work at a new place of employment and is insured in a pension plan from his previous place of employment, will be eligible to receive the percentages specified in the mandatory mandatory pension law from day one with the new employer.

see the full wording of the mandatory pension plan here:

AACI’s Navigational Series: Know Your Rights

Moshe

AACI’S Navigational Series: Know Your Rights
Starting Employment – What am I entitled to ?
What is mandatory for the employer to pay (and deduct)
from payroll ?
What is optional, and how to read the payslip.

When: Monday, October 11, 2010 7 p.m. Continue reading “AACI’s Navigational Series: Know Your Rights” →

Everything you wanted to know about Havra’a payment

Moshe

 

Everything you wanted to know about Havra’a payment

Submitted by Moshe on Mon, 30/08/2010 – 23:51

 

What is Havra’a payment ?
Havra’a payment (or convalescence pay) is an annual, mandatory payment effecting all employers in the state of Israel via an expanded regulation order signed by the Minister of Labor. This means it is treated as a law.
Havra’a pay is paid to all employees who have at least one year of tenure with the employer.
Those who don’t are not eligible, but the following year are eligible to receive Havra’a payment for the full year plus the portion of the first year.
The payment is a number of days (see table below) multiplied by the rate (currently 351 shekels), which is updated every June. Employees who work less than full-time positions, it is prorated according to your % of position actually worked (including sick days, vacation, reserve duty and maternity leave).
There are two rates, one for the private sector and another, higher rate for the public sector. There are also separate tables of days of Havra’a eligibility for Histadrut employees, municipal employees and teachers.

Since most of the users of this site are employed in the private sector I have chosen to relate to this only.

Tenure with employer                       Number of Havra’a days
1 year                                                                     5
2-3 years                                                                   6
4 -10 years                                                               7
11-15 years                                                                8
16-19 years                                                                9
20 years and  upwards                                         10

 

Example: an employee who has been employed with the employer for 4 years in the private sector would receive as follows:

7 days * 351 sh = 2,451 sh (gross)

Note: There are employers who prefer to pay Havra’a on a monthly basis instead of a one-time annual payment. This is legal and the result would be an additional payment on each payslip of 1/12 of the Havra’a payment. Of course the amount needs to be updated annually (usually in June or July payroll).

Penalty for tardy payment of payroll

Moshe

 

Penalty for tardy payment of payroll

Submitted by Moshe on Mon, 23/08/2010 – 20:44

The protection of salary law specifies that salaried employees must be paid by the last day in the period of time for which they are being paid (i.e. the last day of the month), however salary will only be considered to be have been paid late if 10 days have passed since the due date. In plain English, this means it cannot be enforced until the 10th of the following month, thereby creating the myth that salaries can be paid by the 9th of the month.
But what actually is the penalty for late payment ?
The law specifies that for the 1st week of tardy payment the employer is penalized 5% of the amount that hasn’t been paid and from the second week onwards, for each additional week (or part thereof) an additional 10%.
The same applies for monies that were deducted from the employee’s pay but not transferred by the employer to it’s rightful destination on time; For example pension plan savings.
Labor courts tend to be lenient on penalizing employers when the employer claims that it wasn’t purposely done or for reasons that weren’t in his control.
There are things that can be done, like filing an anonymous complaint with the Ministry of Trade, Commerce and Labor’s hotline (see essential phone numbers in the menu bar on this site)
Late payment of payroll on a recurring basis is usually a just means for resigning your position and retaining rights to severance pay if you have worked at least 1 year with the employer.

Radio interview on RustyMike Radio

Moshe

 

Tune in to Israpay’s radio interview – August

Submitted by Moshe on Fri, 23/07/2010 – 10:34

You are invited to tune-in to my radio interview on the “Goldstein on Gelt” show with Doug Goldstein.

www.rustymikeradio.com

Monday August 23, 2010 at 7 p.m. (Israel time)

Your comments on the show are appreciated.

Enjoy !

The Israeli Pay Slip: An in-depth explanation for the perplexed

Moshe

This article was published in the Job Search in Israel blog

Perplexed

For those of you that are working in Israel, or have worked in the past, trying to decipher your pay slip is one of the most complicated things you will experience in the workplace, right up there with understanding how to use the coffee machine. We are fortunate to have Moshe Egal-Tal available to provide us with a comprehensive article about the intricacies of the pay slip, so that you can better determine how you are being compensated, and confirm that there are no mistakes. Continue reading “The Israeli Pay Slip: An in-depth explanation for the perplexed” →

Information on correct employment of youth

Moshe

Information on correct employment of youth

Submitted by Moshe on Tue, 29/06/2010 – 13:04

 

As summer vacation approaches, it is time once again to refresh everyone’s memory as to the laws regarding youth employment.

AGE OF EMPLOYMENT

It is strictly forbidden to employ youth under age 14.
Youths between the ages of 14 – 15 can be employed in light work only. Light work is defined as work that will not hinder or impair their health or development.
During the school year and in certain dangerous jobs, it is permitted to employ youth only from age 15 and up, under condition that the mandatory learning law does not apply to them.
(examples of dangerous jobs: heavy cutting machines, manufacturing and processing of flammable substances or items, work at temperatures below 4 c or above 40 c.
As for youth employed in commercials, preformances, etc. a special permit is needed from the Ministry of Industry, Trade and Employment, Other special regulations as to employment conditions and hours apply.

WORK NOTEBOOK & MEDICAL APPROVAL

The law mandates the employer to demand from youth employees (under age 18) to produce a work notebook, as a prior condition of employment.
This notebook is issued by the local employment services office. In order to procure a work notebook, applicants need to show up in person with their Israeli I.D. card (or one of their parent’s I.D. card where they are listed), a doctor’s note from the family practitioner, that they are healthy and able to work, 2 passport pictures. There is no fee to procure the work notebook and it is issued on the spot.
The work notebook needs to be on premises at the place of employment.

NOTIFICATION LAW

The purpose of this law is to make clear the conditions and terms of employment, rights and obligations of the employee.
Each youth must receive a written notification. signed by the employer, within 7 days of start of employment and it must include all of the following:
the ID number of the employee, employee’s name, address, start date and length of employment, work hours, job description, houly rate and all benefits and payments (i.e. travel expense), name and job description of the employee’s direct superior adn any other information which can help the youth understand his job and what is expected of him.

WORK HOURS

Youths can be employed for up to 8 hours maximum per day and no more than 40 hours per week.
Youths aged 16 and above can be employed for up to a maximum of 9 hours per day, as long as the maximum of 40 hours per week is complied with.
The above does not apply to youths that are employed and who are covered by preferential terms of employment or a collective agreement and also handicaped youth (physical, mental) who are employed in protected factories (factories that the State of Israel participates in their financing).

OVERTIME employment of youths in overtime is completely forbidden by law !

Weekly day of rest

It is forbidden to employ youths during their weekly day of rest (Shabbat) and there is no possibility of receiving a permit for this.

Breaks

After 6 hours of work, it is mandatory to allow youth a 45 minute break for rest and to eat, at least 30 minutes must be consecutive.
The break is usually on the employee’s time (i.e. unpaid) but this should be agreed apon before employment commences in order to avoid future misunderstandings.

NIGHT WORK

The law states that between the hours of 20:00 and 08:00 A.M., it is forbidden to employ youths under age 16.
Employment of youths, between ages 16 – 18 is forbidden between the hours 22:00 and 06:00 A.M. unless a special permit has been granted
from the Ministry of Industry, Trade and Employment.

RECORDING WORK HOURS

All employers are required by law to keep track and record the exact hours of work of all youth employees, and if such is done manually, each youth who is employed, and the employer need to authorize their hours by signing off on them daily.

ANNUAL VACATION

For the first four years at the place of employment a youth is entitled to 18 calander days (14 actual work days) of vacation time per year.

TRAVEL EXPENSES

In addition to pay, youth are entitled by law to re-imbersement for travel expenses from their home to work and back. The maximum rate per day for travel expense is 23.70 shekels. The employer is obligated to ensure that the youth employees have means to return safely home after work. youth who work 18 days or more, are usually paid the rate of a monthly free bus pass (chofshi chodshi). Those who work less than 18 days would be paid per day at the rate of cost (up to the max 23.70 sh)

FINES & DEDUCTIONS

It is illegal to fine or punish youth by means of salary deductions, unless specifically permitted by law. This includes any dedections for “damages”.

TAXES AND SOCIAL SECURITY

A youth’s income is taxable, just as a regular (over age 18) employee.
The only difference is that youth between 16-18 are eligible to receive an extra tax point each month. Male youth (16-18) receive 3.25 tax credit points, while female youth (16-18) receive 3.75 tax credit points. Each tax credit point is worth 205 shekels (as of Jan 2010).
Working youth are exempt from payments towards social security (bituach leumi) and health insurance (bituach briut), however the employer is obligated by law to pay the employer’s portion of social security as follows: (as of Jan 2010) 0.38% of the total gross pay – up to 4,809 shekels and 0.61% of every additional shekel up to 79,750 shekels.

MINIMUM WAGES FOR YOUTH (in Israeli Shekels) – updated June 2010

Age—— Monthly salary **—– Hourly Rate
——————————————————–
up to age 16 —– 2,695.13 —— 15.58
up to age 17 —– 2,887.63 —— 16.69
up to age 18 —– 3,195.65 —— 18.47
apprentices * —– 2,310.11 —— 13.35

* apprentices are in accordance with the apprenticeship law only)
** The monthly salary is for full-time position – no more than 40 weekly hours or 173 monthly hours. Partial positions are configured accordingly.

Even if a youth agrees to work for less than the amounts in the table above, it is illegal and the employer cannot pay less than the minimum.

IMPORTANT NOTE: There is no such thing as a “trial period” or “training” where the youth employee would not be paid !
Every period of employment carries mandatory payment for work from the first hour of work. Payment is mandatory for training, explanatory meetings, etc. such as pre-work meetings for summer camps.

On-line filing of taxes

Moshe

All about on-line filing of taxes in Israel

Submitted by Moshe on Sun, 27/06/2010 – 16:29

 

 

As part of correction 161 to the tax ordinations, anyone who is required to file an annual tax report (form 1301) is now required to file on-line.

This is to be done in one of two ways:
1) transmition via the tax authority’s computer (sha’am) thru tax representatives (CPA, Tax Advisor or Lawyer) that are connected to the sha’am computer.
2) transmition via the internet

this change is effective immediately and includes tax reports for 2009

On June 16, 2010 the knesset finance committee authorised the tax regulations which enable exemptions from filing on-line for individuals whose income does not exceed 75,000 shekels annually.
Married couples 150,000 sh (75,000 each) as well as for individuals that they and their spouse have reached retirement age (65).
This does not apply to individuals or their spouses who are controlling owners of companies as they are defined by the tax regulations.
This new regulation will also not apply to those who filed to receive the negative tax stipend.

It should be noted that the above exemptions are only applicable for the on-line report but do not exempt from filing an annual report as per the tax regulations.

To find out if you need to file contact a certified tax representative (CPA or tax advisor).