If it is not possible to make contributions to a pension fund, the "approximate work" rule will apply, whereby at the end of the employment relationship, the employer will pay the employee a severance pay of the amount that contributions would have been
To avoid high financial expense at the end of the employment period, the employer can set aside his share of the pension insurance and severance pay each month to his own specific place (such as a dedicated bank account)
Employers of foreign workers in the construction and special technology fields, as well as nursing care companies that employ foreign workers, must deposit their pension insurance and severance pay contributions into a special security account at Mizrachi - Tefachot bank
An employer of a foreign worker that is an infiltrator, is required to make a monthly security deposit for his employer in lieu of the pension insurance contributions. The security deposit is 36% of the worker's salary of which 16% is paid by the employer and 20% is deducted from the worker's salary.
For more information see social benefits for foreign workers on the Ministry of Labor, Social Affairs and Social Services website]
According to the extension order for pension insurance that came into affect in 2008, foreign workers in Israel are entitled to pension insurance contributions from their employers.
- The contributions amounts to the foreign workers' savings fund are identical to the amounts contributed to Israeli employees' pension insurance. For more information see Pension Insurance for Employees.
- Because pension savings are long-term savings, the contributions for foreign workers should be deposited into a non-pension fund or a special deposit account that the workers will be able to redeem when they finish working in Israel.
- Employers of foreign workers in the construction special technology fields, as well as nursing care companies that employ foreign workers, must allocate the funds to a special security account in Mizrahi - Tefahot Bank, which will be available to the worker at the end of his employment. This account is made up of the employer's contributions component and severance pay contributions only, and does not include the worker's contribution.
- As of 01.05.2017, the employer of a foreign worker who is an infiltrator is required to deposit a monthly deposit for the employee instead of the pension insurance contributions. The deposit will be 36% of the employee's salary, 16% will be paid by the employer and 20% will be deducted from the employee's salary. For more information, see Security Deposits for Foreign Workers who are Asylum Seekers.
- As of 01.02.2019, according to the extension order in the hotel industry, employers of foreign workers in the hotel industry must also make monthly contributions for each foreign worker (except daily workers) made up of the severance pay contributions and the employer's penison contributions. For more information, see Employers of Foreign Workers in the Hotel Industry must make Monthly Deposits.
Who is Eligible?
How to Claim It?
- The right is given automatically by the employer.
- The employer must set aside the amounts specified in the expansion order into a bank account that was opened specifically for this purpose or into pension savings account with one of the insurance companies, on a monthly basis (the conditions of the savings account must ensure that the money can be withdrawn without a fine when the worker's employment in Israel is over).
- In cases where the money can not be deposited into a provident fund, the employer must deposit them in a designated bank account in the name of the worker, so that they will be paid to him during his employment. In these cases, the employer does not have to pay the worker's share and is not entitled to deduct the employee's share from his salary. In other words, the employer must deposit the employer's contributions and the severance pay payments only.
- In a case that the employee violated the worker's rights, a complaint can be submitted to the Ombudsman for Foreign Worker Rights. It is recommended to contact aid organizations that assist foreign workers.
Compensation for a worker who did not have funds contributed for him
- According to the ruling of the national labor court (see the court ruling below), if the employer did not set aside the funds for his worker he is required to pay the worker compensation of the sum of what the contributions would have been if he had set them aside.
- If the worker is not entitled to severance pay (for example he resigned in circumstances that don't entitle him to compensation, or before completely a full year of work), the employer is required to pay him compensation in the amount of the contributions he was required to make, i.e., the employer's compensation (6.25% as of July 2016, 6.5% as of January 2017) + compensation component (6% as of 2017).
- If the worker is entitled to severance pay, the employer must pay the worker full severance pay (8.33% of his last salary for each month that he worked) and in addition pay the employer's compensation (6.25% as of July 2016, 6.5% as of January 2017) + compensation component (6% as of 2017).
Foreign workers in the construction, agriculture and special technology fields and foreign workers employed by nursing care companies
- Those who employ foreign workers in the construction, agriculture and special technology fields and foreign workers employed by nursing care companies, must make a monthly deposit for each foreign worker they employ. The amount of the deposit is made up of the amount of the severance pay component and the employer's pension contribution that the employer must pay the employee for a full-time job, pursuant to the expansion order or collective agreements that apply to him. In reality this deposit replaces social payments. For further details, see Employers of Foreign Workers in the Construction Industry, Unique Technology Fields and Nursing Companies, must make Monthly Deposits
- As of 01.02.2019, this obligation also applies to employers of foreign workers in the hotel industry. For further information, see Employers of Foreign Workers in the Hotel Industry must make Monthly Deposits.
- In such cases, the employer is not required to deposit the employee's share and is not entitled to deduct the employee's share from his salary.
- The deposit will be given to the foreign worker upon his permanent departure from Israel, but if the worker stays in Israel illegally, a fine will be deducted from the deposit. For further details, see Withdrawal of Deposited Funds by Foreign Workers in the Construction Industry, Unique Technology Fields and Nursing Companies.
Workers in the Nursing Field that are Jointly Employed by a Nursing Company and Patient
- A foreign nursing care worker that is employed by a nursing company for a patient that is entitled to a Long-Term Care Benefit, is entitled to work conditions including a pension, proportionately from each of his employers (the patient and the nursing company).
- The share of the nursing company is determined on the benefit rates to which the patient is entitled, according to the National Insurance Institute's.
- The scope of the position that the patient is obligated for, is the amount of hours required to make the employment a full-time position.
- For additional information see Joint Employment of a Foreign Worker by a Nursing Care Company and a Patient.
Foreign Workers who are Asylum Seekers
- Beginning from 01.05.2017, employers of foreign workers that are asylum seekers must make a monthly deposit for them, in lieu of pension insurance contributions, to a special account at Bank Mizrachi.
- The deposit amount is 36% of the worker's salary, of which 16% is paid by the employer and 20% is deducted from the worker's salary. For additional information see Security Deposits for Foreign Workers who are Asylum Seekers.
- The deposit will be given to the foreign worker upon his permanent departure from Israel, but if the worker stays in Israel illegally, a fine will be deducted from the deposit. For additional information, see Withdrawal of the Deposited Funds by an Asylum Seeker who is a Foreign Worker.
Restrictions on the release of funds after termination of employment
- It is not possible to insure foreign workers in a pension fund, and therefore it is accepted that at the end of their employment they will receive the funds deposited to their social insurance by their employer (employee compensation component + compensation component).
- In addition, the worker will be entitled to receive from his employer the compensation component and severance pay component (in the event that he is entitled to severance pay) for the period for which the employer did not deposit such funds.
- Foreign workers in nursing companies, in the construction industry and in the special technology field are entitled to receive their deposited funds in their entirety when they permanently leave Israel, contingent on having the appropriate visas.
- If a foreign worker stays in Israel illegally, a fine is deducted from his deposited funds. For additional information see Withdrawal of Deposited Funds by Foreign Workers in the Construction Industry, Unique Technology Fields and Nursing Companies.
- A foreign worker who is an asylum seeker that has left the country permanently before the date he is required to leave, is entitled to all the funds deposited for him by his employer, less management and income tax expenses at the rate of 15%.
- If the foreign worker who is an asylum seeker leaves the country after the date on which he was supposed to leave Israel, amounts will be deducted from his deposit based on the amount of time he delayed leaving the country. For additional information see Withdrawal of the Deposited Funds by an Asylum Seeker who is a Foreign Worker.
- Welfare Department - Jerusalem Municipality
- Worker's Hotline
- Hotline for Refugees and Migrants
- Physicians for Human Rights - Israel
Assistance in Employing Nursing Care Workers
- Internet hot line for those who employ foreign nursing care workers
- Elder care law services
- Yad Riva - Legal aid for senior citizens
- Reut and Eshel - Guidance services for senior citizens and their families who care for them.
- Kav Lamassik Information and Legal Advice for Foreign Workers.
- Ba-Bayit- Welfare and Aid for the Golden Age
- For a complete lists of organizations offering assistance and support to senior citizens
- For a comprehensive categorized listing of healthcare organizations offering assistance and support to people with disabilities click here.