Israel PEO Services

The Israeli Market

Over the years, Israel has experienced a high average rate of growth. Given its small consumer market domestically, Israel has strategically turned beyond its borders to sell its products and offer its technologies. Other than the high technology and industrial manufacturing, the diamond industry is another important sector that contributes to the economic growth of Israel. The main strengths of Israel economy, which stand behind the technology-driven growth of the economy in recent years, are the well-educated workforce with post-secondary education, a fair amount of research and development, and a high percentage of high technology industries in the economy. These are the strong factors upon which economic growth has depended thus far.

Another area where Israel has an edge is in its global impact. The export-oriented focus, generations of immigrants from around the world with their knowledge of cultures and languages and global networks of connections, have long contributed to position Israel as an island of success.

Employment Information

• The usual working hours in Israel are across 5 working days. With 8.6 daily hours for 4 days per week, and 7.6 hours on the other day. Some roles may require work 6 days per week. In the event of a 6-day working week, 8 hours per day is the standard, not exceeding more than 42 hours per week.
• Overtime payments generally sit at 125% payment for the first 2 hours exceeding the standard working hours. 150% payments are paid for any overtime worked beyond the first 2 overtime hours.
• Employees in Israel are usually given bonuses, however this is a part of an agreement between the employee and employer.

Holiday days in Israel are defined by the law, stating which dates are partial working days and which are not.

• Monthly Based Salary – Employer will pay holidays as a full working day.
• Daily / Hourly Based Salary – employer will pay a full payment for 9 specific holidays under two conditions:

1. The employee has been employed for at least 3 months prior to the holiday.
2. The employee has worked a day before and a day after the holiday (absences requires his/her employer's consent).

Hiring in Israel

The following data should be transferred while hiring a new employee:

1. Contract conditions between the employer and the employee, including salary's components, insurances and funds, etc.
2. Employee declaration regarding his/hers personal details (form no. 101) - To be filled out and signed by the employee prior to the first day of employment. The following form will be updated and signed at the beginning of each calendar year and / or if any changes occur. Employers will verify that the employee has fulfilled their bank details.

The employer must manage an accurate time and attendance system specifying each month as follows:

• The number of days each employee worked.
• The number of vacation days each employee used.
• The number of sick days each employee used.
• The number of reserve duty each employee served.
• The number of hours each employee worked.
• The number of days/hours of unpaid absence each employee took.
• This data must be provided to the payroll provider in order to avoid disinformation on the pay slip.

Impacts from COVID-19

The restriction on employee mobility has been one of the critical measures worldwide to stem the spread of the COVID-19 pandemic. An Israel PEO allows companies to avoid mobilizing employees from their home country and forego the associated expense. This service is particularly advantageous for companies that do not have a legal identity in the country they wish to operate.

Similar to other countries across the globe, Israel also took measures to promote remote working practices during the COVID-19 pandemic. Since the pandemic, ‘hybrid’ working patterns have been largely adopted, with many staff working some days at home, and some days in their offices.

Cultural Information

• Israel is the birthplace of the Jewish culture, encompassing a diverse range of characteristics including art, philosophy, literature, poetry, and more.
• Judaism is the most common religious affiliation of the Israeli people, with Muslims and Christians making up some other major groups.
• Israel is one of the most linguistically diverse countries in the world, with 34 languages being commonly spoken in the country. Of these languages, Hebrew, Arabic, English and Russian are the most common.