Changes in pension plan rates in public sector

The new referendum issued by the finance Ministry applies to all public sector employees and is in effect from Jan 1, 2011

According to this referendum, both employee and employer contributions towards benefits in Kupot Gemel for pension will be raised by 0.5% 

This means that from Jan 2011 – Dec 2012, the employee’s contribution will be raised from 5.5% to 6% while the employer’s contribution will be raised from 6% to 6.5% 

Starting in Jan 2013, both the employer’s and the employee’s rates will be raised anoth 0.5%

employer 7%

employee 6.5%

 The second change is regarding Bituach Menahalim programs.

This basically will make the pension plans and bituach menahalim plans equal in terms of rates. 

Up until now the rates were 5% each; employer and employee, 8.33% towards severance pay (employer) and up to an additional 2.5% for loss of work liability.

Frim Jan 2011 – Dec 2012 the employee’s contribution will be raised to 5.5% and the employer’s contribution will be raised also to a max of 5.5% provided that with the loss of work liability, it will not top 7.5%

Starting in Jan 2013, both the employee’s and employer’s contributions will be raised to 6%  provided that with the loss of work liability, it will not top 7.5%

 

 

Moshe Egel-Tal, CSPP
Founder and CEO, Israpay   "making payroll simple"

 Sitehttp://www.israpay.com
 Email:  mo***********@***il.com

Skype: motal7

Snail Mail:  p.o. box 44429 Jerusalem, Israel 91443

 Follow me on social networks: Facebook, xing, twitter, Plaxo, FriendFeed, LinkedIn, Digg, Tagfoot, Myspace    Username: Israpay

  

Employer’s Social Security contributions to change as of April 1st 2011

Social Security recently published directives to employers regarding a change in the % of employer’s contributions towards their employee’s benefits via payroll.

The changes are basically a reduction from the lower bracket (up to 4,984 shekels) and a raise in the % from the higher bracket (anything above 4,984 shekels). The amounts are gross (pre tax).

the % of the deductions and the raise are not equivilant.

 

Also, the maximum pay for Social Security and Health tax purposes is 73,422 shekels, as of Jan 2011.

 

 

 

Moshe Egel-Tal, CSPP
Founder and CEO, Israpay   "making payroll simple"

 Sitehttp://www.israpay.com
 Email:  mo***********@***il.com

Skype: motal7

Snail Mail:  p.o. box 44429 Jerusalem, Israel 91443

 Follow me on social networks: Facebook, xing, twitter, Plaxo, FriendFeed, LinkedIn, Digg, Tagfoot, Myspace    Username: Israpay 

Employee’s rights: Israel vs. USA

living in Israel, the only true "democrapic" country in the world, many people feel that there is so much that could be made better. If only the authorities and government offices would actually be service-oriented. If only the government would be attentive to the people’s needs and desires and actually stick to their campaign issues that got them there in the first place. The list really goes on and on. I have heard many people say "why can’t they do things like in the states" ?

What is a democrapic country you ask ? A  democrapic country is a country that thinks it’s democratic but the Bolshevik and bureaucratic crap is more dominant, while the democratic part is very selective and only when it suits the ruling party.

I can’t vouch for the other issues, but in regard to employee’s rights and labor laws, Israel has passed the USA along time ago. The USA could actually learn a thing or two from Israel in this regard. 

When employees are interviewed they have rights: there are questions that potential employers cannot ask: personal, sexual preferences, political views are all off limits.

When they are hired, there are procedures, embedded in labor laws, as to proper notification to the employee, what needs to be included in this letter, what is mandatory payment and what needs to show up on the payslip.

When employees are terminated, or resign, they also have rights, regardless of the reason of resignation or termination.

Apparently, in the USA there are many loopholes that allow employers to "erase" payments due to employees, on a whim. Here are a few examples that I came across recently:

An employee resigns to take on another position. If they do not give advance notice, the employer can choose to not pay out the remaining non utilized vacation days that the employee has accrued ! This is ludicrous by Israeli standards. This is totally legal and there is nothing the employee can do about it.

In Israel, an employee can be fired for stealing from the employer, but he would still be entitled to a payout of his remaining vacation days.

The same is true regarding advance notice. If an employee receives a monthly rate and has tenure of at least one year, he is liable to give 30 days advance notice or have the equivalent deducted from the final payment calculation. The same applies to the employer, he must give the employee 30 days notice (in the same scenario) or pay out the equivalent.

note: for hourly-rate employees it depends on their tenure (1 day for each full month worked for the first 6 months, and 2 1/2 days for each additional month)

 

 

 

Moshe Egel-Tal, CSPP
Founder and CEO, Israpay   "making payroll simple"

 Sitehttp://www.israpay.com
 Email:  mailto:my*****@***il.com” data-original-string=”AgAHCBSPyfjbB9spYXc1BQ==484fe/ZAviOQ5Qb9DMXcNvIfNFCbotJHViA3oEgUjg3KosocPxsHcxS2qNiw7/sglyq” title=”This contact has been encoded by Anti-Spam by CleanTalk. Click to decode. To finish the decoding make sure that JavaScript is enabled in your browser.

Skype: motal7

Snail Mail:  p.o. box 44429 Jerusalem, Israel 91443

 Follow me on social networks: Facebook, xing, twitter, Plaxo, FriendFeed, LinkedIn, Digg, Tagfoot, Myspace    Username: Israpay 

Five signs of a bad boss

There are many indications that one can detect if they are aware of them, even in job interviews (!), that will indicate a "bad" boss or mildy put "an employer you do not want to work for. This is especially true in Israel, where some employers just blatantly disregard labor laws. However, things are improving in this area in the last decade since Government enforcement has become more involved. they act on anonymous tips and after investigation submit suits in labor law, which heavily fine employers for recurring infractions of the law.

Here are a few examples (and their hidden meanings):

1. You are asked whether you serve in Reserve military
    meaning: The employer is not very patriotic nor
    ethical. They will not hesitate to hire someone who’s qualifications may be less, as long as they are not absent from work to serve their country.

2. Female applicant is asked whether she intends on giving birth in the future
Even though this is totally against the law (discrimination), many employers want to know whether they will need to find a replacement while you are on maternity leave. This will add to their payroll expenses, but is totally irrellevant and none of their business.

3. The employer suggest you do an unpaid internship "to learn the ropes"
Also, totally illegal. Interns or trainees must be paid at least minimum wages and travel expenses. This is a strong indication that the employer is a cheapskate and probably not worth working for.

This excellent article in the Wall Street Journal by Diana Middleton which can be an eye opener to bosses, but can also help employees recognize whether their boss is a "bad" boss too:

http://online.wsj.com/article/SB10001424052748703786804576138141599946476.html?mod=WSJ_mgmt_LeftTopNews

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Moshe Egel-Tal, CSPP
Founder and CEO, Israpay   "making payroll simple"

 Sitehttp://www.israpay.com
 Email:  mo***********@***il.com

Skype: motal7

Snail Mail:  p.o. box 44429 Jerusalem, Israel 91443

 Follow me on social networks: Facebook, xing, twitter, Plaxo, FriendFeed, LinkedIn, Digg, Tagfoot, Myspace    Username: Israpay 

Are you employed in two places of employment simultaneously ?

 

Are you presently employed by two employers as a salaried employee ?

NOTE: if you are employed by more than two employers, you will need to go to your local Bituach Leumi with a copy of each of your payslips and this article does not  apply to you. 

If you are earning less than 4,984 shekels gross pay from your main place of employment, you are entitled to pay social security (bituach leumi) and health tax (bituach briut) at the lower rate up to the 4,984 ceiling from deductions from your pay by your secondary employer.

In the past, in order to do this you had to go in to your local social security office and bring with you your teudat zehut and your payslip from both places of employment.

This was a time-consuming process which wasn’t very efficient due to narrow working hours open to the public, usually during the morning and not every day. This required a day off in order to complete.

As of 2010, Social Security instigated the 644 form and warranted employers to accept the employee’s signed declaration in order to configure the social security and health tax deductions accordingly.

Now they have taken it a step further. You can now do the reconciliation on-line on Bituach Leumi’s website. You can also read more about this, as well as download all the forms needed for any number of applications for eligibility for: old age stipends, survivor’s stipends, maternity leave forms, work-related accident forms and more…..

Losing an essential personal identification document like a social security card can majorly impact your employment.Click on the following to know how do i get a replacement social security card within a week.

 They even have an English site too.

http://www.btl.gov.il/Pages/default.aspx

Moshe Egel-Tal, CSPP
Founder and CEO, Israpay   “making payroll simple”

 Site: http://www.israpay.com
Email:  mo***********@***il.com

Skype: motal7

Snail Mail:  p.o. box 44429 Jerusalem, Israel 91443

 

 Follow me on social networks: Facebook, xing, twitter, Plaxo, FriendFeed, LinkedIn, Digg, Tagfoot, Myspace    Username: Israpay   

 

A new verdict by the labor court regarding an employer’s legal access to an employee’s email account

Most employees have an email account at work. While it is assumed by employers that this is to be used for work, many employees use their work email to send occasional private messages too.

While this may seem quite normal, there are many borderline activities that may not be completely kosher, but were never ruled upon and therefore were unknowns.

Two recent cases that cam before the labor court and the rulings on these cases actually set forth a whole new chapter in work email: what is the status of the email account ? does the employer have the right to access the email accounts of his employees ? Or is this an infringement in privacy ?

 The first case was a woman who was fired while pregnant and sued the employer for infringement of the pregnant employee’s rights and woman’s employment labor laws. 

The employer claimed that her pregnancy had nothing to do with the termination and asked to submit evidence, by way of emails and documents obtained from the employee’s email account that the employer setup for her at work.

The emails, claimed the employer proved that the employee had sent her CV to potential employers and was actually searching for another position on her work-time, which the employer felt was unethical and not up to time utilization standards that he expected from his employees.

The court accepted the employer’s claims and ruled that the termination was legal due to the circumstances and evidence that was shown. The employee appealed to the National Labor Court, which overturned the ruling and found in favor of the employee.

 

The second case was regarding an employee who setup a self-employed business and used his work email to conduct this business on work-time. This employee was fired as well and the emails were submitted to the court as proof.

The court this time ruled in favor of the employee, the employer appealed, but the appeal was rejected.

 

The court issued a 90 page document which basically divides email accounts into 3 categories:

1. Email accounts owned by the employer, which are assigned to an employee for his use at work and only for work purposes.

2. Email accounts owned by the employee (usually Internet based such as Google, Yahoo, hotmail, Walla). These accounts are accessible from any computer with Internet access (unless blocked by the employer’s server).

3. Email accounts that are multi-functional – used primarily for work, but the employee uses this email account to send personal messages as well.

 

In the first category, the employer is allowed to access the employee’s email account freely with no restrictions or prior consent needed.

The second category can never be accessed by the employer without a court order, even though the information may be sometimes stored on the employer’s computers.

The third category can be accessed by the employer only after receiving express prior written consent from the employee.

 

The court also clearly outlined guidelines for all employers, for Internet and email usage in the work place. These need to be spelled out clearly in writing and should be incorporated into the contracts of all employees as well.

The bottom line is that employee’s emails are protected by law and the employer cannot read them freely just because he owns the email account or because they were written using the employer’s computer or on work-time. 

 

Moshe Egel-Tal, CSPP
Founder and CEO, Israpay   "making payroll simple"

 Sitehttp://www.israpay.com
 Email:  mo***********@***il.com

Skype: motal7

Snail Mail:  p.o. box 44429 Jerusalem, Israel 91443

 Follow me on social networks: Facebook, xing, twitter, Plaxo, FriendFeed, LinkedIn, Digg, Tagfoot, Myspace    Username: Israpay 

Be careful how you fill out your 101 form

OK, I will consent that this is a rare case indeed, and not every employee who mistakenly checks the wrong box on the 101 tax form will be arrested. However, it is important to understand what this form is all about and how to correctly fill it out. The other issue is that purposely filling out incorrect information is not only a criminal offense, but the tax authorities can and will discover your mistake due to a cross-check that they apply with employer’s annual reports.

I will try to explain this in a nutshell: The employee is required by law to fill out a 101 tax form at the start of employment and at the beginning of each tax year (by Feb 28th). Those who fail to do so, or leave blank vital info regarding additional income (via payslip) will be taxed at the max rate (currently 45%) from the first shekel !

The taxes in Israel are annual, thereby enabling a reconfiguration each month, which basically means that in March’s payroll all employees who have not turned in their 101 forms get hit with a mandatory 45% tax on the accumulative salary since January  !

The tax authority’s assumption is that when an employee is hit with such a huge amount of taxes, they will run and fill out the 101 form properly. It is also easier for them to make the employer "the bad guy" by deducting the tax.

Know this: section dalet of the form regards your income from this employer and section heh regards your income from other employers. If you have only one employer you need to check the box which states "I have no other source of income". Again I remind you that this is regarding payslip income only ! Any income from rent or stocks or stipends from Social Security are irrelevant on this form.

Do not forget to sign the form – without your signature the form is void and it is as if you didn’t fill out the form.

The case noted in the teaser was from 2003, regarding an employee who worked at 2 jobs simultaneously. At each place of employment he stated that it was his only place of employment and that his wife was not working, although she was. This guy took it a step further, he actually went to the ministry of interior and changed his residence to Nahariya in order to get the 15% tax credit on all income, which he received from both employers !

Well, at year’s end all employers are required to file a report with the tax authorities regarding the annual pay of all of their employees, as well as their personal details and those of there spouses. This info is cross-checked with the employee’s info and when inconsistencies are found they are investigated. The crimes this man committed amounted to 450,000 shekels of tax benefits he wasn’t entitled to. The court awarded him 10 months in prison, a 40,000 shekels fine and if a future repeat happens within 3 years he will return to prison for another several years. Obviously he had to return the tax credits he wasn’t entitled to as well, with interest.

Better to be honest and know how to fill out the form correctly.

This gave him extra tax credit points

 

Moshe Egel-Tal, CSPP
Founder and CEO, Israpay   "making payroll simple"

 Sitehttp://www.israpay.com
 Email:  mo***********@***il.com

Skype: motal7

Snail Mail:  p.o. box 44429 Jerusalem, Israel 91443

 Follow me on social networks: Facebook, xing, twitter, Plaxo, FriendFeed, LinkedIn, Digg, Tagfoot, Myspace    Username: Israpay 

Chapter 37 of the tax law – credit for support of one’s spouse

Everyone supports their spouse ! Well at least they should, I mean that’s what spouses are for, to support each other.

Yes, but that’s not the kind of support we’re talking about here.

Up until Dec 31, 2004, if a husband or wife did not work or have income from a pension or from self-employed work, the working spouse received an extra tax credit point via their payslip each month.

Corrections of the tax law in 2005 and 2006 changed this.

The extra tax credit is now only available to  retirement age individuals whose spouse has no income and is supported by their spouse.

If your spouse had no annual income and neither of you are of retirement age, only the tax authorities can authorize additional tax credits. You would need to submit a tax rebate request for salaried employees along with your 106 form(s) at the end of the year. 

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Moshe Egel-Tal, CSPP
Founder and CEO, Israpay   "making payroll simple"

 Sitehttp://www.israpay.com
 Email:  mo***********@***il.com

Skype: motal7

Snail Mail:  p.o. box 44429 Jerusalem, Israel 91443

 Follow me on social networks: Facebook, xing, twitter, Plaxo, FriendFeed, LinkedIn, Digg, Tagfoot, Myspace    Username: Israpay 

Increase in maximum mandatory transport payment via payslip

Due to the recent increase in public transportationl expenses, the munion of industrualists released a memo on Jan 31, 2011 which states that according to the recent collective agreement, the maximum mandatory daily reimbursement for tavel expenses has been updated  to 24.40 shekels per day, as of January 1, 2011.
 

Moshe Egel-Tal, CSPP
Founder and CEO, Israpay   "making payroll simple"

 Sitehttp://www.israpay.com
 Email:  mo***********@***il.com

Skype: motal7

Snail Mail:  p.o. box 44429 Jerusalem, Israel 91443

 Follow me on social networks: Facebook, xing, twitter, Plaxo, FriendFeed, LinkedIn, Digg, Tagfoot, Myspace    Username: Israpay 

New law proposal

On december 20th, 2010 a law proposal to update the minimum wage law was put in motion in the knesset. The proposed law ammendment would put the minimum wage at 53% of the Average Salary in the Economy (ASE).

As of January 2011 the ASE is 8,307 shekels.

If approved, the amendment would update the minimum wage from the current 3,850 shekels to 4,402 shekels.

Obviously, the hourly minimum wage would be updated accordingly, as well.

Due to the continued errosion of salary because of price increases, this is a blessed proposal which has the backing of the Histadrut and many Mk’s. Let’s hope they will pass this bill in due time with no further delays.

stay tuned !

 

Moshe Egel-Tal, CSPP
Founder and CEO, Israpay   "making payroll simple"

 Sitehttp://www.israpay.com
 Email:  mo***********@***il.com

Skype: motal7

Snail Mail:  p.o. box 44429 Jerusalem, Israel 91443

 Follow me on social networks: Facebook, xing, twitter, Plaxo, FriendFeed, LinkedIn, Digg, Tagfoot, Myspace    Username: Israpay