Employee Rights in Israel – Complete Guide 2025 | NETO

Overview of Employee Rights in Israel

All employee rights in Israel are enshrined in law. Like all developed countries, Israel ensures the welfare and rights of workers. In most organizations, employees are the most valuable resource — both in terms of importance and payroll costs.

Today, when all information is available online, almost every employee is fully aware of their rights, and there are many labor lawyers who help employees enforce them. The majority of employee lawsuits succeed (estimated at about 70%) — even though employers are usually represented by more experienced attorneys.

In some cases, labor law violations are committed in good faith and out of ignorance — which, of course, does not exempt the employer from liability.

Employment Agreement

By law, the employer must provide the employee with a written employment agreement within 30 days of the start date. The agreement describes the role, direct supervisor, working days and hours, salary, social benefits, and additional conditions.

The employment agreement is a binding document and must include all legally mandated information. Failure to provide it exposes the employer to penalties.

Working Hours and Rest

A full-time position is defined as 182 hours per month (42 hours per week). Every employee is entitled to a weekly rest day (usually Saturday). Under the Hours of Work and Rest Law, no employee may work more than 12 hours per day (including overtime).

Overtime Compensation

• 125% — for the first 2 overtime hours per day
• 150% — from the 3rd overtime hour onward
• Maximum: 16 overtime hours per week (58 total hours/week)

Annual Leave

Every employee is entitled to paid annual leave. The number of vacation days increases with seniority:

• Years 1–5: 16 vacation days per year (including the day of rest)
• Leave entitlement accrues monthly
• At least 7 consecutive days must be taken per year
• Upon termination: the employee is entitled to payment for all unused vacation days

Sick Days

Every employee accrues 18 sick days per year (1.5 days/month, up to a maximum of 90 days), subject to submission of a medical certificate.

• Day 1: The sick day is used but not paid
• Days 2–3: Two days used, but only 50% is paid
• From day 4 onward: 100% of daily salary paid

Public Holidays

Every employee is entitled to payment for 9 public holidays per year (according to the Jewish, Muslim, or Christian calendar), provided:

• The employee has completed at least 3 months of work
• The holiday falls on a regular workday
• The employee worked the day before and after the holiday

An employee who works on a public holiday is entitled to 150% of regular pay.

Recreation Pay (Dmei Havra’ah)

Recreation pay (dmei havra’ah) is paid once a year — usually in July/August — to employees who have completed at least one full year of employment. The amount is determined by a seniority table. Unpaid recreation pay from the last year of employment is settled upon termination.

Travel Expense Reimbursement

Every employee who uses public transportation to commute is entitled to reimbursement of travel expenses to and from work, provided the distance exceeds 500 meters. Read more about travel reimbursement →

Pension and Severance Contributions

Under the mandatory pension extension order, every employer is required to make monthly pension contributions. The employer contributes 6.5% of the base salary to the pension fund, while the employee contributes 6%. The employer also contributes 6% for severance under Section 14 of the Severance Pay Law.

Upon dismissal after one full year of employment, if the severance fund does not cover the full statutory amount, the employer must top it up to 8.33% of the last salary × years of service.

Pre-Dismissal Hearing (Shimua)

Before dismissing an employee, the employer is legally required to hold a pre-dismissal hearing (shimua). The employer must notify the employee in advance, in writing, of the reasons for the planned dismissal, and give the employee a genuine opportunity to present their case.

Dismissal without a proper hearing may be considered unlawful termination, entitling the employee to additional compensation beyond regular severance.

⚠️ Disclaimer: The information on this page is intended for general knowledge only and does not constitute legal advice. Please consult a lawyer or professional as needed. For official and up-to-date information, refer to the Ministry of Labor and the National Insurance Institute.