The Law authorizes The Israeli Ministry of Work, Trade and Labor work inspector to impose up to 35,000 NIS fines on employers who breach employment laws.
Background: an ongoing expanding phenomenon of non compliance with employment laws in Israel instigated, in 2006, the nomination of a Ministry of Industry, Trade and Labor (MOITAL) Committee on the enforcement of labor laws. The Committee's recommendations were integrated in a new MOITAL law - The Law for the Enhancement of Enforcement of Labor Laws – that recently entered into force. The Law's aim, according to the Law's bill, is to enhance and increase efficiency of the enforcement of labor law on employers and on manpower contractors, using administrative procedures that include imposing financial sanctions.
Main Law sections: the Law mandates the Work Inspector to impose financial sanctions on employers in the case of labor law infringements. The Law provides for three levels of financial sanctions: 5000 NIS; 20,000 NIS; 35,000 NIS. The first level pertains to infringements regarding issues such as management of working hours record, posting a sexual harassment code and employee breaks during work hours. The second level pertains to infringements regarding issues such as vacation, over-time, youth employment and maternity leave. The third and most grave level of infringements pertains to issues such as late payment of salary, minimum wage, undue dismissal of women, undue dismissal of IDF reservists and pension payments, etc.
The Work Inspector is required to notify the Employer in advance about any detected violation that warrants fines, detailing the infringement in question and the level of the fine to be imposed. The Employer then has the right to plead in writing to the Inspector for the revocation or reduction of the fine.
The Law imposes responsibility (and corresponding liability) for monitoring labor law compliance in a corporation on the General Manager. This liability can also sometimes take the form of personal payment of fines by the GM.
One of the Law's most important sections imposes joint liability on Employers and manpower Contractors, in cases where the Employers ordered manpower from said manpower Contractors. In furtherance of this principle, the law specifies three conditions for the imposition of such liability on the Employee, as to the time he was employed for the Employer: 1) the service was given by at least four employees 2) the service was given for at least six months 3) notice was given to the Employer and the infringement was not remedied within 30 days.
The responsibility imposed on the Employer requires the latter to take all reasonable actions in the circumstances to prevent infringement of the rights of the employees of the manpower Contractor. A good defense for said Employer might be reliance on periodic voluntary inspections made by a certified salary reviewer.
The Law also regulates the terms of any contract entered into between the Employer and the manpower Contractor. The Law imposes criminal and/or civil liability in cases where such contract does not stipulate employees' salary components or where it provides for consideration to Contractor that is lower than the rate warranted by the Minister for certain types of workers. The Employer is also required, by the Law, to oversee the manpower Contractor in regards to possible infringements and violations specified by law. The Employer can be liable for such infringements unless the Employer can prove that it took the necessary steps to fulfill its duty or that it relied on voluntary inspections.
Commencement date: June 19, 2012.
References: The Law for the Enhancement of the Enforcement of Labor Laws, 2011.
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