Israel

Overview of Israel

Israel lies right on the Mediterranean ocean and is part of the middle East. The capital city is Jerusalem and Tel-Aviv is the nations finance hub with the second highest concentration of high-tech companies in the world. Israel has a population of 8.8 million people and is known as the holy land to Christians, Muslims and Jews. The official languages are Hebrew and Arabic. Israel is the only liberal democracy in the Middle East and is one of only 3 countries in the world to not have a constitution. All eligible men and women of Israel are drafted for military service once they turn 18 (2 years for women and 2 years and 8 months for men).

In Israel, the business culture is fast-paced, informal and buzzing. the dress code is business casual and there is no formal dress code for the office. Be on time for meetings but do not be surprised if your Israeli business partner is 10-15mins late. Answering a phone call in the middle of a meeting is also usual for Israelis, do not be offended. Meetings are quite informal and people will just speak their mind, rather than waiting their turn. Meetings in coffee shops are not unusual. Business partners take time to get to know each other also out of the office so be prepared to socialize outside of office hours.

Currency of Israel

• New Israeli Shekel (NIS)

Health Insurance and the Social Security system of Israel

Israel introduced universal healthcare in 1995. The compulsory medical insurance plan is funded by the health tax and other government funds. An employer is legally obligated to provide a healthcare as part of the benefits package otherwise he/she is responsible for any medical costs. There are 4 official healthcare organizations: Clalit, Leumit, Maccabi, or Meuhedet.

Israeli healthcare covers the following:

• family and preventative medicine;

• medical diagnosis and treatment (inclusidng alcohol and drug abuse)

• hospitalization (general, maternity, psychiatric, and chronic);

• surgery (including elective surgery);

• transplants;

• medical equipment and appliances;

• first aid and transport to medical facilities;

• obstetrics and fertility treatment;

• medications (including some for severe illnesses) approved by the National Health Basket (updated annually);

• treatment of chronic diseases and paramedical services;

• physio and occupational therapy;

• mental healthcare;

• IVF treatments for the first two children up to the age of 45 and abortions.

Employer cost of Israel

The cost for an employer to hire someone in Israel is a plus of 7.60% to the gross salary.

Salary and bonuses of Israel

Employees who work on a wage are paid monthly.

After being employed for 1 year, employees are entitled to a so-called Recreation Payment. This is paid between July and September. The amount is determined by law every year and depends on the number of years of employment.

Public Holidays in Israel

Most public holidays follow the Hebrew calendar which is why the dates fall on a different day of the Gregorian calendar every year. These are the official holidays however many others exists where schools are closed but there is no break in the business sector.

• between March 26 & April 25 – Passover
• between April 1 & May 1 – 7^th Day of Passover
• between April 15 & May 15 – Independence Day
• between May 15 & June 14 – Shavuot
• between Sept 5 & Oct 5 – New Year
• between Sept 14 & Oct 14 – Yom Kippur (Day of Atonement)
• between Sept 19 & Oct 19 – Sakkut (Feast of Tabernacles)
• between Sept 26 & Oct 26 – Simchat Torah/Shmini Atzeret

Working Hours in Israel

Office hours are from 8:80/9:00am to 6:00pm, Sunday to Thursday. Some international companies will be open on Friday mornings but in general no business is conducted on Fridays after sundown.

A regular work week is 45 hours.

The first 2 hours of overtime are paid at a rate of 125% and the following are paid at 150% the hourly rate.

In most Israeli employment contracts, a clause is included that sets forth an arrangement by which the employee receives a predetermined overtime pay, estimated on the number of hours of overtime such an employee will work. The estimated number of overtime hours are specified as the “overtime quota” in the employment agreement.

Vacation in Israel

During the first 5 years of employment, an employee is entitled to a minimum of 12 days of paid vacation time. In the 6^th year of employment, this goes up to 14 days, in the 7^th year an employee gets 15 days and in the 8^th year 16 days. After the 8^th year, an additional day is added per year to maximum of 20 days.

Sick Leave in Israel

During the first 5 years of employment, an employee is entitled to a minimum of 12 days of paid vacation time. In the 6^th year of employment, this goes up to 14 days, in the 7^th year an employee gets 15 days and in the 8^th year 16 days. After the 8^th year, an additional day is added per year to maximum of 20 days.

Termination/Severance in Israel

The procedure to terminate an employee in Israel are quite strict and must be adhered to exactly, if the termination is to be valid. The employee is given a summons to a hearing which must include all the reasons as to why the employee should be terminated. The employee must be given enough time to prepare for the meeting and can hire a lawyer for it.

At the meeting, the employer must listen to the arguments the employee brings forth and allow room for discussion. The hearing must be recorded and notes must be passed out to the employee, if he/she requests them. Only after having time to reflect on the meeting, will the employer inform the employee of his decision.

If the decision is made to dismiss the employee, this must be stated in writing and the dismissal date must be given. An employee who has worked for the company for longer than one year is entitled to 30 days notice.

The law states that an employee who has worked for a company for 1 year or longer is entitled to severance pay. The severance pay rate is one months’ pay for every year worked.