Employing Workers via a Manpower Agency in Israel
Hiring through a licensed manpower or placement company lets you engage workers for a temporary, project-based or operational need · without carrying the full employer bureaucracy yourself. This 2026 guide explains how the model works, the difference between placement, manpower and payroll, your legal duties, how to choose a provider, and NETO's licence #1565.
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Employing workers via a manpower agency in Israel means engaging a licensed provider that employs the worker and places them with your business. It is important to distinguish three services: a placement company sources and screens candidates; a manpower company may actually employ workers and place them at a client (this requires a Ministry of Labor licence); and payroll / EOR solutions manage employment and payment for workers already chosen. Start from the facts · who works, for whom, for how long and who manages the work · then choose the route and document the division of responsibility. NETO is a licensed manpower contractor (licence #1565), supervised by the Ministry of Labor with guarantees deposited there: it issues the invoice, employs the worker on a payslip and carries the employer-employee responsibility, in suitable cases.
This summary is generated from the page content and the linked sources · full detail below. It is not legal advice.
Guide Summary
What every business owner and HR manager should know about employing workers through a manpower company, in brief:
- Placement, manpower and payroll are three different services · not the same thing.
- A manpower company that employs and places workers needs a Ministry of Labor licence.
- Start from the facts · who works, for whom, for how long and who manages the work.
- Define who the employer is and who is responsible for the reporting and rights.
- Verify the provider's licence · NETO holds licence #1565.
- In the NETO model, NETO is the legal employer and carries the responsibility.
Employing via a manpower agency · key facts
Placement vs Manpower vs Payroll
"Manpower and placement" are not the same thing · they are two different services that are often mixed under one heading. A placement company usually sources candidates, performs initial screening and connects a candidate to a business · the employment itself then usually passes to the employer. A manpower company may actually employ the workers and place them at a client, subject to the relevant laws and licences.
Alongside these are payroll and EOR (Employer of Record) solutions, which focus on managing employment and payment · not necessarily on recruitment itself. NETO is a licensed manpower contractor (licence #1565) and provides an operational solution for orderly payment and employment in suitable cases. The right choice starts from the facts, not from the heading.
How the Manpower Model Works
In the manpower model the provider is the legal employer of the worker, while your business directs the day-to-day work. In practice:
You sign an agreement with the manpower company and order the worker for the work · defining scope, period and rate.
The provider issues you an invoice for the work; you approve and pay the provider.
The provider pays the worker on a payslip and is responsible for the employer-employee relationship, contributions and reporting.
The Employer's Legal Duties
Working through a manpower company does not mean responsibility simply disappears. Israeli law regulates manpower contractors precisely because workers must be protected, and a client that uses workers still has duties. The essentials:
- Engage only a licensed provider. A manpower contractor that employs and places workers must hold a valid Ministry of Labor licence · verify it before you start.
- Ensure the worker's rights are honoured. A client may bear responsibility if the provider fails to pay the worker's rights · choose a provider that pays a lawful payslip.
- Watch the substance of the engagement. If a placed worker is managed as your own employee over a long period, classification questions can arise · document the arrangement.
- Keep proper documentation. Agreement, work orders, invoices and reporting · these protect both your business and the worker.
Choosing a Provider · 5 Steps
Start from the facts and not from the heading · define whether the need is finding people or managing employment and payment, then choose a route:
Decide the real need. Is the problem finding workers, or managing employment and payment for workers you already have?
Check the regulation. Determine whether a licence or regulatory arrangement is required for the type of activity.
Define the roles. Who is the employer, who manages the work day to day, and who is responsible for the reporting.
Compare the total cost. Salary, rights, management, insurance, risk and operating time · not just the headline rate.
Document and start. Record the division of responsibility between the business, the worker and the provider, then begin in an orderly way.
Placement · Manpower · Payroll · NETO
What actually differs between the routes · a practical comparison:
| Function | Placement | Manpower | Payroll | NETO |
|---|---|---|---|---|
| Sources and recruits candidates | Yes | Sometimes | No | No · an operational solution |
| Actually employs the worker | No · passes to the employer | Yes | No | In suitable cases |
| Manages payslip, reporting, payment | No | Yes | Yes | Yes |
| Suits a worker already found | Less | Partly | Yes | Yes |
| Manpower contractor licence | Not always | Required | Depends | #1565 |
This is a general comparison and not legal advice. NETO does not present itself as a placement company where no recruitment is performed.
The Licence · #1565
NETO operates in Israel under manpower contractor licence No. 1565 from the Ministry of Labor. In practice this means working with a regulated body for orderly payment and documentation routes · subject to a case-by-case check of the nature of the engagement, the documents and the reporting required.
Employing Workers via NETO
You can employ workers through NETO in a manpower / outsourcing / payroll model. NETO acts as a licensed manpower company (licence #1565): it is permitted to employ a worker to perform work for a client it has an agreement with, and to carry the employer-employee responsibility. The client receives an invoice, and NETO pays the worker on a payslip.
Suitable for engagement as needed · project-based, hourly or ongoing roles.
NETO is responsible for the employer-employee relationship, payslips, contributions and reporting.
The client receives a valid tax invoice from NETO and pays NETO. See salary payment by invoice.
You direct the work day to day · without the employer bureaucracy. Learn more about Israel payroll and EOR in Israel.
Frequently Asked Questions
What is the difference between a placement company and a manpower company?
A placement company mainly sources candidates, performs initial screening and connects a candidate to a business; the employment itself then usually passes to the employer. A manpower company may actually employ the workers and place them at a client, subject to the relevant laws and licences.
When should a business consider payroll or an Employer of Record?
When the worker has already been found, but the business wants payroll, reporting and payment handled in a more orderly way. Payroll and EOR solutions focus on managing the employment and payment, not necessarily on recruitment.
Is NETO a manpower company?
NETO offers orderly payment and employment solutions in suitable cases and operates under manpower contractor licence #1565, supervised by the Ministry of Labor. It is important to distinguish an operational payment solution from a recruitment or placement service.
Does employing through a manpower company require a licence?
A manpower contractor that employs workers and places them with clients is required to hold a licence from the Ministry of Labor. NETO holds licence #1565, with guarantees deposited with the Ministry of Labor. Employers should verify a provider's licence before engaging.
What should a business check before choosing a provider?
Start with the facts: who works, for whom, for how long and who manages the work. Check whether a licence or regulatory arrangement is required, define who the employer is and who is responsible for reporting, compare the total cost including rights, and document the division of responsibility between the business, the worker and the provider.
Who is responsible for the worker's rights in the manpower model?
In the NETO manpower model, NETO is the legal employer: it issues an invoice to the client, pays the worker on a payslip and is responsible for the employer-employee relationship, contributions and reporting. The client manages the work day to day. Proper documentation protects both the business and the worker.
Summary
Employing workers via a manpower agency in Israel should be examined by the substance of the engagement: who works, for whom, for how long, who manages, and which document and payment fit the work. Placement sources candidates, a manpower company may employ and place a worker at a client, and payroll and EOR focus on managing employment and payment. A manpower contractor that employs and places workers requires a Ministry of Labor licence · so verify the provider's licence before you start.
NETO provides an operational solution for orderly payment and employment in suitable cases, under manpower contractor licence #1565 and Ministry of Labor supervision: the client receives an invoice, NETO pays the worker on a payslip, and NETO carries the employer-employee responsibility. Avoiding invented services and misclassification protects the business · so check each case on its facts and start in an orderly way.
Last updated: 09/07/2026 · this is general information and not legal, tax or accounting advice. Each case is examined on its facts.
Employ Workers in Israel · the Orderly Way
Let NETO be the licensed employer of record for your placed workers · invoice, payslip and compliance handled under licence #1565. Register free, or ask us on WhatsApp.
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