Severance Pay for Foreign Workers: Rights of Tourists and Palestinians in Israel

The Essence

Severance pay (pitzuim) is compensation that an employer is obligated to pay an employee upon dismissal. This right extends not only to Israeli citizens but also to foreign workers, including those working on a tourist visa and Palestinian workers, provided certain conditions are met. The purpose of this payment is to provide financial support during the period of searching for new employment.

Who is Entitled?

The right to receive severance pay depends on your status, the duration of your employment, and the reason for the termination of the employment relationship.

Main eligibility criteria:

• You have worked for the same employer (or at the same workplace) for at least one full year.
• The dismissal was initiated by the employer.
• In some cases, you may be entitled to severance pay even if you resign (e.g., due to a worsening of employment conditions, health issues, or relocation).

Who is NOT entitled (common cases):

• Employees dismissed for serious disciplinary misconduct (requires a ruling from the Labor Court).
• Those who have worked for less than 12 months for a single employer.
• Employees whose pension contributions under Section 14 of the Severance Pay Law fully cover the amount of the severance pay (requires verification of your pension agreement).

Your Rights

The amount of severance pay is calculated using a standard formula; however, special rules and deductions may apply to foreign workers.

Standard Calculation: The amount of severance pay is typically one month's salary for each year of employment. The calculation is based on the last full monthly salary.

Important: For foreign and Palestinian workers, a portion of the pitzuim amount may be deposited into a special account (pikadon). It is necessary to clarify whether your employer made such deposits.

Step-by-Step Guide

The process of obtaining severance pay requires sequential and precise actions.

1. End of Employment: Ensure you have an official notice of dismissal (Michtav Piturin) or proof that you have ceased working.
2. Contact the Employer: First, approach the employer with a written demand for severance pay. This issue is often resolved directly.
3. Check the Pension Fund/Pikadon: Find out if the employer made contributions in your name to a pension fund or a special deposit account (Kupat Gemel / Pikadon). Part or all of the severance amount may be located there.
4. Filing a Claim (in case of refusal): If the employer refuses to pay, you have the right to file a claim with the Labor Court (Beit Din le-Avoda). The statute of limitations for severance pay cases is limited; you must act quickly.

Document Checklist

Gather a complete set of documents to prove your right to compensation.

• Passport or other identification document.
• Work visa or work permit (if applicable).
• Employment contract (if one was signed).
• All payslips (Tlush Maskoret) for the period of employment.
• Letter of dismissal (Michtav Piturin).
• Any correspondence with the employer regarding your employment and dismissal.
• Bank details for the transfer of funds.

Potential Pitfalls

Knowing these nuances will help you avoid losing money and time.

• Statute of Limitations: Do not delay in demanding payment. By law, there are strict time frames for filing a claim in court after dismissal.
• Resignation: If you resign on your own initiative, you generally lose the right to pitzuim. However, there are exceptions (worsening of conditions, health status). It is crucial to prove that the reason for resignation was justified.
• Unreported Wages: If part of your salary was paid "under the table," proving its actual amount for the severance calculation will be extremely difficult. Always insist on a full, official salary reflected in the tlush maskoret.
• Deposit (Pikadon): For many foreign workers, the employer is obligated to deposit money into a special account. This money constitutes your severance pay. Ensure that the employer has fulfilled this obligation.

Contacts and Links

To protect your rights, you can contact the following authorities. Official links and phone numbers should be verified on government websites.

• Population and Immigration Authority: Deals with matters concerning foreign workers.
• Ministry of Labor, Social Affairs and Social Services (Misrad ha-Avoda): Monitors compliance with labor laws.
• Labor Court (Beit Din le-Avoda): The body for resolving disputes between an employee and an employer.
• Non-governmental organizations: There are organizations that provide free legal assistance to foreign workers.

Dictionary

Key terms that will help you in communications with your employer and with official bodies.