If you were laid off in Israel recently or know someone who was, make sure all your termination rights were respected. This article will tell you what those layoff rights are.
Israeli Labor Laws & Scales of Justice

This article is a guest post by Israpay's Moshe Egel-Tal, CSPP.

Latest update: October 2020

What are the Israeli employee's termination rights?

Prior notice

An employer is required by law to give prior notice to an employee upon layoff. The employer can waive the employee's services for this period of time but it must be paid in full regardless.

Monthly salaried employees get 1 day's additional notice for each month worked for the first 6 months.

From the 7th – 11th month, it's 6 days plus 2.5 days for each additional month beyond 6.

From 1 year of tenure onward, the employee requires 30 days' advance notice.

Severance pay

If you worked at least a year with the present employer in most cases you are eligible for severance pay. Severance pay needs to be paid within 30 days of termination and is paid by the employer or a severance pay fund.

Unused vacation days

Any unused vacation days that you have accrued must be paid out to you in your last payslip.

Termination letter

This is of utmost importance, especially if you intend on filing for unemployment benefits: make sure the letter is on company stationery, dated and states the reason for termination and the effective termination date.

Pay attention that the effective termination date should be *after* the prior notice period. For example: an employee with 5 years' tenure receives a termination letter dated Jan 1st saying that he will be terminated, effective Feb 1st i.e. after the 30-day notice period. This is legal. However, if the letter had said “effective Jan 11th” – this is illegal.

Other critical documents to get when laid off in Israel

Release letters for any savings, pension or hishtalmut funds

These are a must- without them you will not be able to withdraw from any of the funds.

The letters need to be on company stationary, dated and should be addressed to the fund. Each letter must specify that you have stopped working for the employer and that the employer releases the amounts accumulated in the fund to you, specifically the employer's and the employee's parts.

In each case, the employer sends the letter to the fund and you receive a photocopy. Make sure it is signed and has the employer's stamp on it as well. Keep this in a safe place, preferably with the policy or yearly statements the fund sends you.

Authorization letter of employment

This is required by law and is a proof of employment. Should be kept on file with your records and needs to include name, ID number, job description, start and end dates.

A copy of the 161 tax form

Only when you're eligible for severance pay: if you file for Israeli or foreign tax returns, this is the official document which states your severance pay due and the taxes paid on it. For each year of tenure, there is a ceiling which is tax exempt. In 2009, that ceiling is NIS 10,980. Unless your monthly salary was higher than the ceiling, it should be exempt from taxes.

Recommendation letters or referrals

Always a good idea, especially if you were laid off due to cutbacks, the economic situation, etc., in other words, at no fault of your own. Make sure these are on company stationary, dated and state your name, position held, tenure and responsibilities. Ask your supervisor or boss,  who will usually be happy to write a recommendation letter for you.

Internal contact lists

You never know when you might need to contact someone from this place of employment. Write down names, job descriptions and phone numbers of colleagues and key personnel (like the HR dept, payroll). Make sure you have the employer's contact information as well e.g. from an empty envelope or other piece of company stationary.

The above information pertains to employees whose pay is monthly based. Temporary hire through agencies, hourly employees and others – there may be some differences in the law. This article is a general overview and only intended to give a clearer picture and is not meant to be taken for word in every situation. For more information on specific cases, contact Moshe.

About the author

Moshe Egel-Tal, CSPP

Moshe Egel-Tal is a certified senior payroll professional (CSPP) with over 20 years experience in the finance field. He has vast experience in payroll instruction to end users, setup and implementation of payroll departments and fine-tuning payroll processes for companies. Moshe has lectured at university on labor laws in HR managers' courses and at payroll comptrollers' courses. Born in Chicago, Moshe made aliya in 1978 and resides with his wife and 3 sons in Jerusalem. Get Moshe's book “Tax Benefits for Salaried Employees in Israel“.

For more information about Moshe, see his Jobshuk profile or LinkedIn profile. If you need help with labor issues in Israel, Moshe can help you with his consultation services.

If you like this article, you'll enjoy The 25-Point Layoff Success Checklist You Hope to Never Need.

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This Post Has 25 Comments

  1. Benji Lovitt

    What if they reduced my job (and pay) by 50%? Can I claim anything for that?

  2. Moshe

    If an employer one-sidedly reduces your work time (and or pay) this is grounds for resigning your position as it is an infringement on your existing terms. If you have been working at least 1 year, you are eligible for severance pay even though you resign.
    see previous article I posted on Jobmob regarding resigning your position and receiving severance pay.

  3. Dara

    The prior notification of lay-off is very interesting to me, and something I’ve never seen exhibited here in America. It provides a more gentle attitude, in my opinion, and would be beneficial for us to adopt here.

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  5. Maggie

    I was delayed from receiving total severance pay after termination because the employer’s accountant ignored my request that he send a letter to the insurance/pension company to release the funds and when he did so did not address it to the pension fund but to the insurance company in general. Is this legal? It has been more than 2 months and still no pay.

  6. Louis

    If payments to a keren pitzuim are mentioned in my contract, can my employer withhold pitzuim after laying me off, claiming that I worked less than a year? Isn’t the keren pitzuim part of my salary and benefits?

  7. Moshe

    Louis, The severance pay portion of any fund (including pension, bituach menahalim or severance pay funds) are the employer’s property. In order to be eligible to withdraw those funds you need to have a signed letter by the employer releasing them to you.
    Since you worked less than a year and are not eligible for severance pay, the employer is not obligated to release the severance pay to you.
    It is not part of your salary, but a benefit once you have tenure of at least 1 year with the employer.

  8. Moshe

    sorry for the delay in answering this, i guess it got lost somehow –
    At any rate, any requests you have from your former employer should always be done in writing and sent by registered mail. this way you can actually prove you demanded it. If it’s been done via phone, it’s your word against theirs and hard to prove.
    It’s definitely not your problem where the accountant sent the letter and to whom it was addressed. you need a letter from the employer which acknowledges that you worked for them. It should state your full name, i.d. #, start and end dates and what your position was.
    You also need to receive a release letter addressed to the insurance company which states that you have ceased to be employed by the employer and releasing in your care all funds accumulated in the account.
    you also need to receive a 161 tax form from the employer.
    without the release letter and 161 form you cannot access this money at all.
    If the amount accumulated of severance pay is less than what you need to receive (1 month’s pay for each full year worked)
    The employer needs to pay you the difference. You need to contact the insurance company/pension fund and they will explain to you when you are eligible to receive the money (usually at retirement age only- age 62 for women, 67 for men) this due to new legislation regarding withdrawl of pension funds. i will also say that in most cases even if you could withdraw the money now, it would be taxed making the idea not worthwhile)

    best of luck


  9. David

    Are these points (especially the notice part) still correct today (in sync with current law)?

  10. Moshe

    Yes, David they are still correct today.
    These points do not change very frequently if at all.


  11. David

    I heard that instead of 14 days notice (under 6 month employment), the employer can waive that and pay only for each month worked an additional day. Is there any basis to that practice?

  12. Moshe

    David, Yes, that is correct. The law specifies one day per month worked up to 6 months after that it’s 2.5 days for each additional month (plus 6 days for the first 6 months). The 14 days is only after you have tenure of at least one year. I think you may have misunderstood the law.

  13. Ari

    Hi Moshe,
    This web siste is very helpful. Thank you. I understand that before terminating the employment relationship, the employer must provide the employee with advance notice. It is the law that this notice be written? Thank you,

  14. Moshe

    Glad the site was a help to you.
    Advance Notice can be given orally, but an employer who does so will want to back himself up legally and will therefore usually issue it in writing afterwards. Failure to do so is only opening up a pandora’s box for possible future disputes which may lead to lawsuits.
    Any employer who respects himself will always issue any notice to an employee in writing.

    best wishes,

  15. David

    Thanks a lot Moshe for your respond, but now i’m more confused than before. In this article under “Prior notice” you write, that someone that worked less than 6 month has to be given 14 days notice. But in your answer to my question you write that this applies only after one year if working. What is now correct?

    Thanks for your help.

  16. Moshe

    I should have been clearer in the blog. The 14 days for under 6 months apply to monthly-salaried employees. Employees who are paid by the hour are entitled to 1 day per month worked for the first 6 months and an additional 2 1/2 days for each additional month over 6 months as I wrote you previously.


  17. Edan

    Hi, I was recently laid off from work after about 4 and a half months. I wasn’t given prior notice at all and in fact the letter that I was given said that my employment had been terminated a day earlier. I was looking over the contract and it says that fro someone who has not been working there for one year(or maybe it was 2) the regular Prior Notice of Termination of Employment rule of 2001 would be in effect. The question is this: The information given on a different website says that the employer only has to give me one days notice, while here it says two weeks. WHich is correct and where can I read the law myself?
    Thank You

  18. Moshe

    After working for 4 months you are entitled to 4 days advance notice. If this wasn’t given, you are entitled to payment for 4 full days of pay (as if you had worked those days). This needs to be itemized seperately on the payslip.

    You can see the Hebrew wording of the law here:
    (copy and paste into a new browser window)

    Note: there is a very limited English Translation of some of the laws but the English isn’t compatible with the Hebrew content and looks like it hasn’t been edited or proof-read.

  19. Kate B

    It is nice to see that Israelis get as much as Europeans do when their jobs end.

  20. Catherine Lawrence

    HI, I worked for a School in Israel for two years, I left this May. During the course of my second year there the school delayed paying me in full by two months (Oct and Nov 2015) and in April and May 2016 I didnt get my pay until June. I was asked to leave by my Director who tried to fire me 3 times as she said she was angry at me asking for my pay and wanted me to go, then I was dismissed without any procedure in May after a child I had been teaching who had done very well over two years, made a complaint against me after I asked him to put up chairs at the end of the day in the classroom, the principal fired me on the spot with no written complaint, no procedure but a threat of the child’s father;s lawyer saying not to come back to work again, I wa terrified and very depressed at this point, I left immediately in tears and in a very bad way.. A few weeks before this happened I was asked by the principal and a mother of one of the students to enable the school to process my last and final salary (in june) for april and may to sign a form and to say not to come back for anymore money, i said wheres the figure for Junes salary ? they said they would fill it in after in a few days, i said i was not happy with this but with no rent for two months i was grateful for anything, i said i dont want money i havent worked for, they translated to me but since found out it was all a lie, i signed my rights away for interest and compensation and severance pay – i would never had done this if i had known as have been living with next to no money for all that time, they also halved my salary twice for travel and pension cuts in Feb and March

    to summarise:

    i wasnt paid properly for two months, then i had to call the parents of the children i taught to get the money myself, the Director said wait – for two months

    I recived my April and May salary in June
    then i was dimissed without procedure because of child’s complaint about me and had to go immediately.

    I was left with no work, no money until June, which was minimal, no severance pay and the document they lied to about its translation the school wont give to me now so i can’t proceed to court with my lawyer without it.

    I am now teaching successfully again full time but have suffered severe depression and finanical hardship, they also delayed giving me payslips for 7 months so all my Aliyah benefits re: tax return and rent subsidy are not processed yet.

    please help


  21. Moshe Egel-Tal

    Catherine, this type of question is more of a private consultation type, but from what I understand you need to know:
    1. Your rights are protected by law and you cannot waive them. If you sign a document waiting your rights when they have been clearly been abused, the document is illegal and will not stand up in court.
    2. An employer cannot force an employee to sign a document in order to get paid what they are rightfully owed.
    3. From what you wrote, it seems the employer intentionally tramples labor laws:
    Failure to pay on time
    Failure to procure payslips to the employee
    Failure to give a hearing prior to termination
    Failure to give advance notice of termination
    In addition, publicly shaming an employee
    All of these things are serious offences and should be reported to the Ministry of Economics hot line 1800-354-354. You should get a lawyer who specializes in labor laws. It sounds like you have a no-brainer case.

  22. Yigal Nathan

    Hi, i have been called for hearing as company is shifting office to another country. I worked on hourly basis for 5 days a week for 4 years and 11 months. For how many previous months salary will they calculate for average pay of my severance pay. What will happen to my Sick days balance which is around 73 days. Will sick days be paid or just casual leave days.Will i get unemployment allowance from government till i find new job and which should i register with them. Is there any time period.Thank you in advance

  23. Claire grinberg

    Hi Moshe. My company accused me of stealing! Ive been with them for over 10 years. Ive never stolen in my life. They decided to fire me. Where do I stand now?

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