Knowledge for our youth

It’s no secret that knowledge is power. It is also very obvious that when people know what their rights are, they aren’t taken advantage of as much.

We emphasis all the time that people should know their rights, but what about our youth ? I am talking about high school kids from grade 10 and up. They start to work during school vacations and really need to know what the basic labor laws are, what Bituach leumi is and why we need it. What is income tax and what the minimum wage is.

It is about time that these subjects be taught as part of the school curriculum  

It is interesting and useful to everyone.

 

I am interested in hearing people’s feedback on this – please post comments on the blog only.

 

 

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

 

Night shift work

"Night shift" is specifically defined in the "work and rest hours" labor law (1951): "Any work day of which at least two hours are between 22:00 and 06:00 shall be considered night shift."

Note: It is enough that a minimum of two hours of the work day/shift are between these hours for the employee to receive all the rights regarding night shift, for all of the hours worked in continuity with the two hours (the two hours can be at the begining, end or middle of the work day)

So what does it mean that this work day is considered "night shift" ?

The law does not specify any special value for night shift work.
The only thing that the law specifies is that night shift work "will not exceed a seven hour work-day." (section 2 B of the law)

There is a court ruling that any compensation for night work remains a topic for negotiations between the employee (or a trade union) and the employer, the same way that the law does not intervene in the hourly rate to be paid to employees (with exception of course to minimum wages)

The effect of the shortening of the work day to seven hours for night work is:

1) That from the 8th hour and onwards, the employee is entitled to overtime pay (125% for the first 2 hours and 150% for each additional hour). However there are restrictions on overtime for night work. In certain sectors these restrictions do not apply: (for example: Medical staff, Electric company, Hotels, Guard duty and more)
2) When configuring the employee’s hourly rate the number of hours taken into account for the calculation will be the number of hours in a regular work day and not the number of hours of night shift (7).

The information contained here is not legal advise, nor is intended to be, but it is to give a better understanding of the law, in general. There may be a collective or sectorial agreement which binds your employer, please check before you conclude that the above is applicable to your situation.

Individual paid consultation sessions are available.

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

Why you shouldn’t withdraw severance pay

Since the changes in the pension plan programs was implemented in Jan 2008, much confusion still exists.

In the past when an employee was fired after a minimum tenure of 1 year, they were paid severance pay by the employer.

Some employers had a severance pay fund that they contributed to each month in order to offset sudden large payments to terminated employees. For the employee this really didn’t matter as they still received the money directly from the employer.

Then there were employers who started an account for there employees in a Bituach Menahalim (manager’s insurance) plan with an insurance company. These plans allowed the employee to diversify their monthly contributions (as well as the employer’s contribution) by designating part as a lump sum payout at retirement and part as a pension to be paid monthly at retirement. This was changed making it mandatory to designate one or the other when signing up for the plan.

In 2008 that changed with implementation of the mandatory pension plan, which basically did away with the lump sum payout altogether. The idea was to ensure that all employees had a pension for retirement.

The pension plans all have several components: employee’s contribution (which is deducted from their payslip each month), the employer’s contribution (which is noted on the payslip as well) and severance pay contribution, which is paid by the employer. This is usually 8.33% of the gross base pay.

Before the implementation of the mandatory pension plan law, employees who were terminated from their jobs were only paid severance pay by the employer if the amount in the severance pay portion of the pension plan wasn’t sufficient for the amount owed by law. In cases where it was sufficient, the employer provided the employee with a signed release letter to the pension fund, in efeect releasing the accumulated sums to the employee. Many non-suspecting employees withdrew the severance pay portion, thereby seriously hindering their future pension payments from the fund by reducing the capital substantially and rendering their account non-active.

If someone were leaving employment to go on pension, it might make sense to withdraw the severance pay portion if they needed the money, but for employees who still have many years until they reach retirement age, it is highly inadvisable as it will hinder their monthly pension when the time comes to utilize it.

Now you cannot say that you didn’t know.

Disclaimer notice: This article is intended to be general information only and not to be taken as specific advice. In each case it is highly recommended that you speak with a licensed pension plan advisor/ insurance agent or with the pension fund, specifically, as the profitablity differs in each case.

 

 

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

 

Tax update for 2011

The following new changes/ updates will go into effect Jan 1st. 2011:

1. The 101 tax form that all employees and pensioners are required to fill out each year has been updated. The new form now includes details in section D on income from scholarships (which are exempt from income tax but must be declared).

2. Section 8 of the 101 form (requests for exemptions and reductions) now includes a new clause for returning citizens, who can receive extra tax credit points provided they check this box and they have a valid "returning citizen" document which is issued by the Ministry of Absorption. A photocopy needs to be attached to the 101 form. 

3. Change in V.A.T. law. The reduction in V.A.T. from it’s current rate of 16% to 15.5 % has been delayed until Jan 2013. This still doesn’t mean anything as it still needs to be approved in the bi-annual state budget for 2013-2014. As for now – no change.

4. Starting in Jan 2011 any payment of subsistence pay (eshel) will no longer be exempt from tax and will not be recognized as a deductable expense by the Israeli Tax Authorities.

5. The minimum annual amount for contributions to charity has been raised to 310 shekels and the maximum has been updated to 7,636,000 shekels.

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

 

Who is exempt from Social security payments ?

There are three types of income that determine the basis for Social Security and Health Tax payments:

1. salaried employee

2. self-employed

3. other income (not work related)

 The following are exempt from payment:

1. Housewives – provided they are married to an ensured person and that they do not work outside of their household.

2. An insured person who is unemployed
    and has no income and is one of the
    following:

A. Prisoner or detainee being held in Jail for
    a period of up to 12 months.

B. New immigrant – exemption for 12
    months from that date of Aliya

C. Citizens who have reached age 18 are
    exempt for up to 12 months (max) not
    necessarily consecutive, provided they
    enlist in the IDF before age 21.

D. Citizens who have reached age 18 and
    are studying in a high school (only up to
    and including 12th grade) or in a
    vocational training school are exempt
    during their studies and for an additional
    12 months afterwards (see C above) This
    exemption will always start between
    ages 18-21 and doesn’t start after
    discharge from army service onwards.

E. Prisoner or detainee being held in Jail for
    a period of more than 12 months, even if
    they have income.

F. A soldier in compulsory army service who
    is unemployed (neither self-employed or
    salaried)

Source: Bituach Leumi website (www.btl.gov.il)

 

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

10 days left to utilize tax benefits on kupot gemel & life insurance

If you have a life insurance policy or a kupat gemel savings account, you have 10 days left (until the end of the tax year) to capitalize on the tax benefits by making a deposit by Dec 31st. 

If you are self-employed use the deposit slip to claim your tax deduction when filing your taxes.

If you are a salaried employee, you will need to submit the original deposit slip to the payroll department at your place of work.

You need to state on the deposit slip that no one except you will be utilizing the deposit slip for the tax benefits and sign it.

The tax credit will show up on your December payslip. 

 

The credit is 35% of whatever you deposit. Not a bad deal, but you have to hurry – time is almost up !

 

 

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

 

 

 

 

The self-employed and Social Security

Self-employed individuals need to pay monthly advances towards their Social Security payments. Many times their accountant will get the advances reduced or stop them altogether.

While this may seem normal, it may seriously deprive the self-employed individual with regard to compensation from Social Security in case of a work-related accident.

Recently, a self-employed individual sued Social Security for a work-related accident that occurred to him, after Social Security rejected his application for compensation.

the court upheld Social Security’s decision, since the self-employed person didn’t pay advances on his Social Security payments. this despite the fact that he had no outstanding debts to Social Security and he made annual payments !

Although each case needs to be reviewed individually and not all cases are the same, caution should be taken when cancelling monthly advances to Social Security. It is advisable to confer with a CPA or Certified Tax Advisor. 

 

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

labor court, scare tactics and lawyers fees

In many case where an employee or former employee sues his employer in labor court, the employer’s lawyers will try to reach a settlement by offering less than is actually owed, by using scare tactics. They will tell the employee that if the case reaches court they will ask for reimbersement of legal fees, “which will almost certainly be awarded.” This in fact is not necessarily true, but an unknowing employee may be convinced that this is actually an absolute truth and settle for less than he is actually owed because he does not want to end up paying legal fees.

It is imperitive that employees know that the labor courts are usually tend to favor the employees when labor laws are blatantly ignored or disregarded by employers. This is because employees are not required to use the best criminal lawyer to sue and can represent themselves, while the employers almost always have lawyers who defend them. The employee is not familiar with legal protocol either.

This of course does not mean that the court finds in favor of the employee all the time, but if there is reasonable proof of the employees claims, that is usually the case. It is important that before you go ahead with the case, you discuss your situation with reliable lawyers, check out McKain Law official site and get in touch with the expert.

There are a few  more things to keep in mind about labor court:

1) Either party can  appeal to the National Labor Court and all decisions by the lower court can be reversed.

2) In most cases the court does not award legal fees to either party.

3) The fine for tardy payments by the employer is specifically defined in the law, 10 percent for the first week and 5 percent for each additional week, are not automatic and most employers will not pay the fine unless ordered to do so specifically by the court.
Even in court the employer will try to get out of paying the fine by saying it was a mistake, or it was unintentional.

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

The common denominator of Israeli employees

Over the years I have seen just about everything in Israeli payroll. I have worked for many different clients and come across every type of employer you could think of.

There were those who were willing to pay a lot for things to get done as long as they didn’t have to deal with any of it and the income kept coming in steady and faster than the expenses. There were those who would run employees into the ground (if they didn’t quit first) by always thinking they could add more and more tasks and responsibilities at the same price. There were the employers who were very skimpy on pay and winched at any mention of pay raises, There were those who were smart enough to know that a happy employee is a productive one and it is a two way street.

But the common denominator between all of these places of employment is that the vast majority of employees do not begin to understand how to read their payslip, let alone what their rights are. It’s not something that is taught in High school, although it probably should be.

The first step to ensuring that people retain their lawful rights is to make sure they understand them. Then they will know to demand what they rightfully are entitled to.

If enough employees complain to the authorities about employers that disregard the labor laws, there will be more fines and penalties issued and employers will think twice before trying to pull a fast one on unknowing employees.

Everyone should know how to read their payslip and understand it, not just the "net pay in the bank" number.

Israpay’s specially designed mini-seminars can help you achieve this and much more in a short but precise single meeting at a reasonable cost.

The issues are explained in English and in layman’s terms, so you can understand it regardless of your financial background or lack of.

Contact today for more information on the next mini-seminar. 

The mini-seminars are usually held in the early evening hours and typically run 2 hours.  Participants receive valuable written material and there is time for Q & A.

 

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

 

stay tuned for news on the upcoming "employee rights handbook", the first English language guide to Israeli payroll, labor laws and much more. 

 

 

Why do I need recomendations ?

o.k. let’s face it, everyone likes to be complimented. It’s part of human nature. And when we do a good job, we have earned the praise. After a while it’s usually forgotten. When an employee is terminated, in most cases they are not going to get a recommendation letter, so it is always good practice to keep hard copies of all awards, praises and recognitions you earn at work, as they happen. If you can scan them, even better. Many potential employers want to see recommendations or speak to prior employers, supervisors, clients or peers.

You can never really have too many recommendations. If you have a good working relationship with your boss, you should ask for a recommendation letter for your portfolio. It should be on company logo paper and should be dated and signed by whoever is writing it for you. It should state your job title/position and state your name and Israeli ID number. It should have your start date (and end date if relevant) but they should be kept precise and not be overdone. They should describe the functions you served and job responsibilities as well as describing your ability and skills.

It’s a good idea to get contact information, such as email and cell phone number from superiors who resign the company to move on or get promoted.

 Sometimes a verbal recommendation is just as good.

Remember: A good portfolio of recommendations and citations is always a welcome addition to your cv. 

 

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