Introduction:

As of February 1, 2019, employers of foreign workers in the hotel industry are required to make monthly deposits into a designated bank account managed by the Population and Immigration Authority for each worker they employ, except for daily workers
The amount of the deposit is comprised of the sum of the severance pay component and the employer's pension contribution component, which the employer must pay the worker for a full-time position, in accordance with the hotel industry's collective agreement. If the worker did not work a full month due to one of the reasons detailed below, the deposit amount is relative to the amount of time he worked
In actuality deposits can only be made beginning 01.04.2019 and the deposit for the time between 01.02.2019 and 01.04.2019 is made retroactively in one payment or in 3 equal payments
The deposit is given to a foreign worker when he permanently leaves Israel, but if the worker stays in Israel illegally, a fine is deducted from his deposit


Tip
This page deals with deposits made for foreign workers that came legally into Israel and are employed in the hotel industry.

For information on deposits made in other cases see:

As of February 1, 2019, employers of foreign workers in the hotel industry are required to make monthly deposits into a designated Bank Mizrachi account managed by the Population and Immigration Authority for each worker they employ.

  • The amount of the deposit is comprised of the sum of the severance pay component and the employer's pension contribution component, which the employer must pay the worker for a full-time position, in accordance with the hotel industry's collective agreement. If the worker did not work a full month due to one of the reasons detailed below, the deposit amount is relative to the amount of time he worked.
  • The deposit replaces the social payments, meaning that in actuality the employer is exempt from paying social benefits or provident fund payments to the worker.
  • The obligation to deposit funds into the deposit account applies from the first month the foreign worker is employed.
  • The employer is not entitled to deduct the amount of the deposit from the worker's salary.
  • The deposit will be given to the foreign worker upon his permanent departure from Israel, but if an employee stays in Israel illegally, a fine will be deducted from the deposit.
  • There is no obligation to deposit funds for daily foreign workers, such as a citizen of a country bordering Israel (such as Jordan), who returns home daily, at the end of his working day.

Target Audience and Prerequisites

  • Employers of foreign workers in the hotel industry (that is not a citizen of a country that borders Israel and returns home every day).

Deposit Amount

  • The deposit amount in the hotel industry is the amount the employer would have to pay for social benefits - Pension Insurance for Foreign Workers, severance pay according to the hotel industry expansion order:
    • As of January 2017 an employer must deposit 6.5% of the worker's monthly salary for pension insurance. If, due to the coverage for occupational disability, there is a need to increase the costs to the employer beyond 6.5%, then the total costs to the employer in respect of the acquisition of loss of work ability and the employer's contributions to the benefits will not exceed 7.5% of the worker's salary. The rate of employer's contributions to employees insured by an old pension fund is 7.5% of the monthly employee's wage.
    • The severance pay deposit component is 6% of the worker's monthly salary and is 8.33% of the monthly salary if the worker has manager's insurance.
  • If the worker did not work a full month for one of the following reasons, the deposit amount will be relative to the amount of time worked:
    • The worker did not begin his employment period at the beginning of the month.
    • The worker did not complete his employment period at the end of a month.
    • The worker took unpaid leave during the month due to illness or vacation to temporary leave the country.
    • In these cases, the amount of the deposit will be calculated relative to the number of work days the worker actually worked in that month divided by the number of days in the month. When calculating the employee's working days, one must take into account the weekly rest days, vacation days, sick days, holidays and other days in which they do not work by law.
Example
  • The deposit amount an employer must deposit for a full time employer at minimum wage is 662 NIS (5300x12.5%).
  • A worker that begins working in the middle of the month and works 10 days plus 2 weekly rest days and 3 sick days is considered to have worked a total of 15 days that month.
  • That month has 30 days. The worker worker 50% that month (30/15).
  • The employer is required to deposit 331 NIS for the worker that month (662x50%).

Stages of the Process

  • In actuality deposits can only be made beginning 01.04.2019.
  • The deposit for the time between 01.02.2019 (the day the regulation passed) and 01.04.2019 is made retroactively in one payment on 01.04.2019 or in 3 equal payments, without linkage, on 01.04.2019, 01.05.2019 and 01.06.2019.
  • The monthly deposits should be made into a designated bank account managed by the Population and Immigration Authority's unit of deposits in the Service Administration for Employers and Foreign Workers.
  • The bank that manages there deposit accounts is Bank Mizrachi Tefachot (bank no. 20, branch 618).
  • The employer will transfer the deposit funds through a bank clearing center, which enables computerized transfer of payments.
  • At the time of payment, the employer must send a report to the online reporting unit by using a set file, citing payment of the deposit for each foreign worker he employs. The report should include the details of the employer, the details of the foreign worker, the amount of the deposit and the period for which the deposit was paid.
  • The employer or nursing company must transfer the deposit funds by no later then the 15th of the month following the relevant work month.

Paying the Deposited Amount to a Foreign Worker

  • A foreign worker who permanently leaves Israel (according to the period of stay stipulated in his license) is entitled, upon his departure from Israel, to receive all the money deposited by his employer plus profits and minus the deduction for account management expenses and income tax.
  • If the worker to stays in Israel past his licensed period, a fine will be deducted from his deposit according to the period of his illegal stay in Israel. In the event of an illegal stay of more than 6 months, the entitlement to receive the deposit will be denied.
  • Deposit money that is not withdrawn by the foreign worker will be transferred to the Public Trustee after two years from when the worker's residence permit expired, and will be used to help with the welfare and health of foreign workers and for strengthening care and support services for foreign babies who have no status in Israel.
  • For additional information see Withdrawal of Deposited Funds by Foreign Workers in the Construction Industry, Hotel Industry, Unique Technology Fields and Nursing Companies.

 

Please Note

  • Failure to pay the deposit on time by the employer, as detailed above, constitutes a violation of the conditions of the permit given to the employer for the employment of foreign workers.
  • The Director General of the Population and Immigration Authority may impose restrictions or sanctions as a result of this violation, and may, among other things, prohibit the employer from employing new workers.
  • In addition, this violation may also lead to civil and criminal proceedings against the employer.
  • Paying the deposit does not exempt the employer from paying the worker's social benefits for the periods for which he did not pay the deposit.

Aid Organizations

Assistance in Employing Nursing Care Workers


Government Agencies

Laws and Regulations

Additional Publications

Credits