The Contractor’s Responsibility in Israel

The Contractor’s Responsibility under Criminal Law for employing Staff without Work Permit or Working Visa in Israel

A. General Responsibility for Workers without Working Visa

1a. Liability of the Employer and its staff

A company acting as an employer of staff without valid work permits who employs an employee who has no valid work and stay permit is sentenced to 1 year prison or a fine up to 276,800 New Israeli Shekels (ca. 100,000 USD). 

1b. Liability of the Contractor as indirect employer

What happens, if your company uses a subcontractor who employs illegal staff on your work site? According to the law and Israeli court practice, the main contractor and its officials are equally punishable, if

The sub-contractor is a recruitment agency 

or

if the illegal employees without a work visa work on the work site or property of the customer (the main contractor)

2. Personal liability of the employer’s functionaries

If the employer is a company, the functionaries of the company have to supervise and to make everything possible to avoid illegal employment. 

The functionaries are: managers and directors, as well as the clerks in the company responsible for the company’s legal duties with respect to the employment of foreign workers, such a project managers and human resources staff.

If illegal employment has occurred, the mentioned functionaries are deemed responsible under criminal law, unless they can prove that they undertook everything to avoid the violation. It is often not easy to provide the necessary evidence. 

The punishment for the responsible functionaries is a fine up to 29,200 NIS. However, if there is more than one illegal employee, this fine is increased accordingly. 

B. Illegal employment of residents of Judea and Samaria or Gaza

Apart from the mentioned provisions in the Foreign Workers Act, the Entrance to Israel Act penalizes the one who employs a resident of the territories without valid stay or work permits. In the course of the new Intifada that has broken out last year, the latest amendment from 2016 of the law has both intensified the penalties and extended its scope.

1. Scope

Under the law, punishable is anyone who employs, directly or indirectly, by himself or by means of another party who is employed by him or on his behalf, a resident of the territories without valid permit (Sec. 12b2(a)(2) Entrance to Israel Act).

The new wording “indirectly” and “by means of another party who is employed by him or on his behalf” strongly implies that the Main Contractor will be punishable, regardless of how the illegally working Palestinians were recruited (whether the subcontractor is a recruitment agency or not).

2. Penalties in Israeli law

The punishment for the employer is imprisonment up to 2 years or a fine up to 75,300 NIS.

If the employer is a company, the sentence is a fine up to 301,200.

If two or more employees or if an employee was employed for two or more consecutive days, the punishments are higher: Imprisonment up to 4 years or a fine up to 226,000 NIS; for a company, the fine is up to 452,000.

C. Operational Advice for Employers in Israel

From the above follows, that the employment of foreign workers through a subcontractor is possible but must be handled with care and precaution. In order to avoid criminal responsibility quickly, there are quick measures and measures to be taken on the long run (i.e. within days): 

The  subcontractor who provides for the foreign staff should sign a confirmation on its company letterhead, confirming that it is a licensed contractor in Israel, that it has been allocated a contingent of Palestinian Employees and all Palestinian and foreign employees he brings on site hold a permit issued on the name of the subcontractor. 

The subcontracting agreement with should be carefully reviewed and a signed copy should be put into the file regarding the work permits. If there is no written subcontracting agreement, such document should be signed immediately. 

Every morning, there should be a staff member on site and control the work permit of each worker. There should be a record on which day which staff member was responsible for the control and the staff member should sign on a confirmation that the control was performed.

In particular, if the subcontractor is a recruitment agency, the license should be presented and a photocopy put into the file. The license and eventual other documents should be examined by an Israeli lawyer experienced in the field.