Many of us dream of resigning but fear losing our accumulated severance pay. As it turns out, in Israel there are many cases where an employee can resign and still retain severance pay. One only needs to know when the law allows it.

Israeli Labor Laws & Scales of Justice This article is a guest post by Moshe Egel-Tal, CSPP. If you’d also like to guest post here on JobMob, follow these guest post guidelines.

Scared about your severance rights?

The employed-job sector has gone through many revolutionary changes in recent years that are characterized mainly by a huge turnover of positions. The days when an employee was secure and stable in his position for life – that were a major factor in accepting a position – are no longer. Employees aren't afraid anymore to change jobs and if someone stays at a position for 3-4 years it is considered a long-term position. Due to high employee mobilization, many employees would like to resign in order to pursue other job opportunities but refrain from doing so because they know they will only get severance pay if they are terminated by their employer.

A new law may help…

There is a pending law that is waiting for Knesset verification, which if passed will enable employees to resign after completing one year of tenure with an employer and still receive severance pay. Many are skeptical about this law's chances, especially since it was already voted upon in the 16th Knesset and defeated.

Update 18/11/10: the law still hasn't passed yet.

What is “a tangible worsening”?

The most common case of resignation that is recognized by law as a “forced situation” on the employee – thereby granting him severance pay rights as if he was terminated – is called a tangible worsening of his employment conditions or reasons that as a result one would not be expected to continue in his position. The wording “a tangible worsening” includes a very wide range of situations which aren't clearly explicit in the wording of the law. So what is “a tangible worsening” ? The rulings of Israel's National Labor Court have defined this as a situation in which the employer has narrowed an employee's steps or worsened his working conditions to a point where he has no alternative but to resign.

Typical examples

The classic case is regarding an employee's wages, which are a basic and integral part of any employee's terms and conditions of employment in a contract between the employee and the employer and cannot be disregarded unilaterally by the employer. Valid instances that are determined to be “a tangible worsening” of terms of employment are:

  • frequently recurring failure to pay salaries for an extended period of time
  • failure to pay minimum wages
  • reducing wages (salary cut)

There are, of course, other reasons that fit well into this category. For example, failure to transfer social benefits that have been deducted from employee's payslips to their destination, or employing an employee at less than minimum conditions as specified by the law. One example of the latter is requiring an employee to work on Shabbat or a holiday without ample compensation as required by law. Another would be an employer ignoring significant breaches in safety, health issues. Unfortunately, a one-time case isn't usually regarded as “a tangible worsening”.

15 cases according to the Severance Pay Law

Here is a list of 15 cases where an employee can resign and claim severance pay according to the Israeli severance pay law (Hebrew):

  1. wage cut
  2. wages at below the required minimum
  3. repeated tardy payments of salaries
  4. non-transfer of social benefits
  5. employment on Shabbat or holiday without required upgraded compensation
  6. employer ignoring safety or health issues
  7. infringement on employee's status, authorization or responsibilities
  8. change of employers
  9. transfer of employee to another site with same employer
  10. employee's change of residential address (to over 40 km distance)
  11. deterioration of health of employee or member of immediate family
  12. an employee who was sexually harassed
  13. a female employee who stayed at a shelter for abused women for over 60 days
  14. an employee who after giving birth and completing maternity leave, wants to resign in order to stay home and take care of her baby (provided this is done within 9 months of the birth of the baby)
  15. an employee who resigns in order to join the Israeli army or police.

This list is not comprehensive. There may be other instances that warrant the same end result, including some which have been ruled upon by the Labor Court and some which have not. Obviously, in instances where the employee instigates trouble or purposely causes damages to the employer, he would not be entitled to severance pay.


This article is a general guideline and by no means should it be used except in clear cut cases. It is advisable to consult with a labor law specialist or a lawyer who deals in labor law issues.

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.

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Jacob Share

Job Search Expert, Professional Blogger, Creative Thinker, Community Builder with a sense of humor. I like to help people.

This Post Has 105 Comments

  1. josh

    If you quit from my company, they will give your severance pay, even if none of the above happened. I think that standard procedure for a company is to pay into a severance pay fund/insurance. Why would a company want to give you this money, which for a ‘long-term’ employee can come out to 50 000NIS and up, rather than pocketing it themselves? The only reason I could think of is a wish to keep a good relationship with the employee and not ‘breaking bridges’. Is this a perk?

    1. Jacob Golan

      As to benefit the Living Financial Smarter Community. What is the law in regards to this example.

      You hand in your letter of resignation, the next day your employer cuts your hours to from 9 to 2. Then tells you to take off on Friday. Is the employer still liable to pay you the full time hours since you provided the notice in writing before your hours were cut?

      Can you now be paid severance because of this employer hostile action?

      Can I just write a letter and refuse to work the two hours and start my new job early?

      I am stuck what to to?

  2. Moshe

    Josh – that is common practice in recent years in the Hi-tech industry, mostly to get employees to join the company and because of the market – many employees change jobs in Hi-Tech very frequently.
    There are also companies I know of that proclaimed this as policy and after a few years when some employees wanted to utilize it they said they changed their policy.
    it actually is a perk, but the article is referring to cases where you are entitled by law.

  3. Dana Markus

    I worked in a hi-tech company for just over 3 years from 2000 – 2003. After giving birth in Nov 2003, I gave notice in February 2004 (after completing maternity leave)in order to stay home to take care of my infant. I did not get pitsuim. Can I try to claim pitsuim now, and if so how do I go about doing it?

  4. Moshe

    Dana – The law regarding outdated issues is 7 years, so it is still relevant.
    It is the company’s responsibility to pay severance pay owed within 30 days of termination of employee-employer relationship, however it is also the employee’s responsibility to demand any payment owed him/her (preferrably in writing).
    This could mean that if you haven’t demanded payment, they may be able to wangle out of paying you any interest of linkage as a penalty for paying it late.
    To sum up: if you haven’t requested in writing – do so with no further delay by registered mail.
    If you have done so already you can sue in labor court.

  5. david myers

    Hi Moshe, I’ve recentley been fired after 15 years with the same company. I worked as a programmer, the company has informed me they are delaying payment of my pitsuim until I produce the latest versions of all my programs.Is this legal? What are my rights? What are their rights?

  6. Moshe

    David – this is totally illegal. you must be paid severance pay up to 30 days after employee-employer relations are severed (i.e. your last day of actual work). you didn’t state whether you were given ample notice (usually 30 days), if not you need to be paid for that as well, although the employer has the option of “buying out” the ample notice (one can be fired immediately provided he recieves payment for the ample notice period).
    if you are still in the “ample notice period” you should do your best to do your job or whatever the employer asks of you, but if you are no longer employed there – they can basically take a hike.
    you should write a formal dated letter to the company asking for all that is owed you, including severance pay within 30 days. send by registered mail and fax. If the money isn’t paid within 10 days of the due date, you can file with labor court.

  7. david myers

    Thanks for the advice,I’ve sent the registered letter, and I’m waiting to see what their response will be. I was wondering what the worst case scenario might be, if they want to accuse me of causing financial harm to the company because they don’t have the source files of systems I’ve developed. Could this be a legal basis for not paying pitsuim.?

  8. david

    Moshe please could you tell me which amount is used as the basis for pitsuim?
    The basic salary, bruto lgemel, bruto ltashlum or neto ltashlum

  9. Moshe

    It’s called Base salary and this is the basis for severance pay (pitzuim) unless otherwise stipulated in a contract or work agreement (union, etc)

  10. josh

    If you have worked at a company for an extended period, is the severance pay calculated on an incremental basis (as your salary has risen over the years) or based on your last base salary?

    Thanks in advance.

  11. Moshe

    It is incremental.

  12. pearl

    Hi Moshe,

    I worked for a company from June 2006 until Oct 2007 when I went on maternity leave. I extended my leave until Sept 2008 when I resigned (for personal reasons). The company paid me pitzium though I think it is less than what I should get.
    How can I figure out what they owe me?

    Also I now want to get unemployment but since I didnt work 300 days in the last year and half (or did I if I include my official maternity leave) I dont think I am entitled. I was told that I should probably be signing up at unemployment and that after 3 months I will receive unemployment benefits. Is this true? If yes, and I signed in once but not since, can I start again now and do I get the retroactive time since my resignation/first time I signed in or does the clock start now?

  13. michele

    Question: My husband’s israeli company is about to give him much less severance/pitzuim than we had expected.

    How is severance calculated exactly? What is “base salary”? The amount you take home, the amount prior to paying in for the Keren Hishtalmut and pension? If he earned, say NIS 11,000 but came home with NIS 7000, on which amount is the severance based?

    many thanks.

    pitzuim are much lower than we expected. is pitzuim (severance) based on the amount of money you earn BEFORE THINGS LIKE KEREN HISHTALMUT and pension

  14. Moshe

    Michele – see comments #9 & # 10 above. I do not have enough information to answer you – but the severance pay is calculated on the gross base salary without additional components (travel, over-time hours, bonuses, etc) and the amount is 1 month for each full year worked. if the amount owed for each year is less than 10,500 shekels (updated as of 1/2009) it is tax free. anything over that is taxable.

  15. Lynn

    Hi Moshe,

    I checked on the National Insurance Institute website to see if I’m eligible for unemployment benefits, but I’m still confused. I started working full time for a company in August 2006. Then in January – April 2007 I took an unpaid vacation. I wanted to return to work earlier but my employer said that by law they had to give my replacement a three month contract, even though she ended up leaving before the three months were up. I eventually returned to work after Pesach, still full time, until the end of September 2007 when I took another unpaid vacation for a month. When I returned in beginning November I spent 3 weeks negotiating a new contract before finally returning to work the last week of November. This time I worked 3 days a week and every second Friday. I went on maternity leave on 3 October 2008 and am still on maternity leave. I’ve been told that I may qualify for severance pay and unemployment benefits if I resign to take care of my child (which is what I really want to do).

    I’ve worked exclusively for this company for 2 years. Would I still qualify for severance pay despite the unpaid breaks? Would I qualify for unemployment benefits if I resign to take care of my child and how do I calculate unemployment benefits when I worked approximately 10 months full time and 10 months part time?

    I hope you can help. I’m supposed to return to work beginning May, but if I qualify for the above then I will send them my resignation by registered mail. One last question. Do I have to mention in my resignation letter that I qualify for severance pay? My employer is very snaky and will do anything “legal” to avoid paying me.

    Thanks in advance for your help!

  16. Yossi

    I have worked in Tel Aviv for 4 years.
    I recently got a job offer up North – I will probably live there during the week, and will come home to my family for shabbat.
    My employer will do ANYTHING to not pay me pitzuim.
    I will be moving more than 40 km for my new job – HOWEVER, my family will still be in its current residence.
    Does this entitle me to pitzuim???

  17. sarah

    Is bonus cut (like 13th salary) is considered as deterioration of condition of work and can be used to quit and get severance pay?


  18. Moshe

    Sarah – a bonus is as it’s name implies. The fact that a bonus was paid once, or even over a long period of time,turn it into a mandatory payment.
    The answer is no.

  19. Moshe

    Answer to comment #18 – Yossi
    In order to use the moving reason to resign, in the classic case, you need to move permanently with your family and change your address in your Israeli ID at the interior ministry. The situation you described will probably not entitle you to severance pay. I do not rule it out, depending what the employer’s attorney recommends. I do not know if such a case has been brought before the labor court or not.

  20. Moshe

    Answer to #17 – Lynn
    In your resignation letter you need to specify the reason and the date it goes into effect. You need to give 30 days notice or it can be deducted from monies owed you by the employer.
    There is no need to mention severance pay or anything else in this letter. keep it simple and to the point.
    ask that the employer acknowledge receipt of the letter and send it by registered mail. ask for a receipt and staple it to your copy of the letter.
    send a seperate letter demanding payment of all owed you, as well as letters releasing any insurance/pension plans to you.

    as for unemployment, you need to check with your local unemployment office. I imagine that it’s prorated according to your actual gross pay. You need 12 consecutive months worked to be eligible.

  21. titik

    I have been working full-time for that company for 5 years from 2004 to 2009. I got maternity leaves on November 2009 and delivered my triplet on January 2010. About May 2010, I tried to go back to work in a part-time basis but my employer did not want me back. I have a lot of financial problem and in dire need help to care of my babies. Should I be qualified to receive unemployment insurance? Can anyone tell me what I should do? Please respond.

  22. Moshe

    An employee who goes on maternity leave is protected by law. The employer must save her position for her when she returns and cannot fire her for two months after her return.
    The law is very strict on violators of this law.
    you can contact the administration of enforcement and regulation (a dept. of the Ministry of Industry, Trade and Employment):
    66 Menachem Begin way Tel-aviv 67138
    Tel: 03-563-4219/4222/4262

    For a more in-depth consultation you can contact me directly via email:

  23. josh

    I think that the issue might only be about the unemployment insurance, since I understand that the two month ‘no-fire’ period starts immediately after the three month maternity leave period and is not delayed by the mother extending that period. You should check what happens since you started the period earlier than the actual birth.

    FWIW, you are fully eligible for unemployment and there is nothing to wait for, go to the unemployment office right away to verify and register. The office does not hand out money right away and you might have missed some time already.

    Given that, nonetheless, you should check if you were eligible for getting fired (bad performance, or laid off with others).

  24. Moshe

    Josh (comment 25) is correct about the unemployment issue, However you will need a termination letter from your last employer.
    The non-termination period of 60 days starts from the end of your maternity leave. maternity leave is:
    for a single birth: 98 days from the date you gave birth
    for twins: 119 days from the date you gave birth
    for triplets: 140 days from the date you gave birth
    (for every additional baby – add another 21 days)

    Josh is correct in that there is no time to be lost as the clock is ticking so to speak and the sooner you file the better your chances for unemployment. they do not pay retro-actively in most cases.

    You are definitely eligible for severance pay if you worked for 5 years (maternity leave doesn’t endanger that)- one month’s pay for each year worked, as well as a payout of any unused vacation days you have accummulated.

  25. Ben

    What is the case if you are outsource working at the client company for 2 years, and the client offers you a permanent placing with them (where there is a contract between your outsourcing company and the client company to “buy” you over. ?
    In other words, you are a companyA Employee working at companyB. CompanyA pays your salary but also CompanyA is payed by CompanyB for your services…

  26. Moshe

    Usually in this case your rights, such as tenure are continued, as the actual place of work hasn’t changed. This is actually to your benefit.
    Just make sure that your “new” employer has listed your tenure as the start date with the outsource company.

  27. Ben

    Thanks Moshe, looks a bit brighter now.
    How would you get the new employer to list it in that way? are they obligated to do this? And if they do would that mean that i would get severance pay?
    Lets say it all works out and the new company lists my date in this way, how would I go about claiming severance ?

  28. Moshe

    Ben, sorry if I wasn’t clear on that – you are not be eligible for severance pay presently, but you will should you be terminated by the new employer at any stage (since you already have 2 years tenure). and yes, they are obligated to do this – that’s the law.
    The confusion may be due to the change of employers- when a new employer purchases a company along with the employees, the employer has changed and therefore all employees would be eligible for severance pay and start anew with the new employer. This does not apply with employment agencies and outsource companies, as in your case, the law is specific on this.

  29. Yonathan

    What if a startup that you join promises stock options at signing and then after six months (or two years, depending on the employee) decides not to offer them to employees. Is this considered “worsening conditions” and the employees are eligible for pitzuim?

  30. Moshe

    stock options aren’t something that you are given and then it is stopped, such as payments via the payslip that are optional or a custom in the workplace (such as a half hour lunch break on the employer’s expense). I imagine that you don’t have anything in writing to support your claim that options were promised. If you do, you might be able to sue in labor court. If not, they will say that the policy was changed and there’s not really much you can due about it.

  31. Tricia

    Hi Moshe.

    I’m an expat that has worked in Israel for seven years. I’m owed a lot of severance. I’m a teacher who finished working 17 Jun, but my contract officially ends 31 Aug and this is considered my ‘last day’. My severence should be paid by 30 Sept in my estimation. My employer has placed my severance funds with the same company who holds the pension funds. The amount that I am owed by my employer is more than is in the fund however. My employer has estimated the difference and will pay me this small difference on 15 Sept, ahead of time. However, the ‘company’ who holds the majority of the funds is telling me, that 1) it must be paid into an israeli bank account and 2) that funds will not be available until ‘october’ and they will not give me a date.
    Former employees have been paid up to 3-4 months late. I cannot afford for this to happen. Please advise. thank you.

  32. Moshe

    Tricia, When a person has a pension plan that includes a severance pay portion, withdrawing the severance pay portion will hinder the pension payments and may also invoke tax because of the premature withdrawl. Therefore my advise is not to touch the money in the pension company at all.
    The sevarnce pay is configured by the employer based on a statement they receive from the pension company and the difference is paid by the employer. In order to receive the money you can open an account in the postal bank and the money can be transferred via western union anywhere in the world. In order to receive severance pay the employee must submit the 161 and 161A tax forms whcih they receive from the employer. If you submit the forms, your payment from the employer should be prompt. The pension companies have their own rules as to withdrawls and there isn’t much you can do about that.

  33. Moshe

    If I understand what has transpired, you have already resigned due to a worsening of conditions.
    Hopefully, you will find a better place of employment soon. I would send a dated and signed letter to the employer demanding severance pay.
    If it isn’t paid within 30 days you can persue other venues: such as an attorney letter to the employer or a lawsuit in labor court.

  34. Rahel

    I worked half-time, as an hourly employee, in a particular job for over three and a half years. Approximately a month ago, my employer notified me, both verbally and by email, that as of the beginning of September, he was reducing my hours to quarter-time through no fault of my own but rather because of a decrease in the volume of incoming work. He said (but did not write in his follow-up email) that the reduction might be temporary, but he did not specify a date when the full number of my hours would be reinstated. The period of my reduced hours was therefore open-ended, with no specified end date.

    Since this would have put me into a catastrophic financial situation, I had to find other employment. Also, it is possible that as a result of my job change, I will have to give up another part-time job at a place where I have worked for nearly a decade and that I enjoy very much.

    Recently, I was told that I am entitled to severance pay on the grounds of “worsening of conditions.” I spoke to my former employer about it, and he says that he does not believe I am entitled to severance pay because I resigned. I told him — and also wrote in my resignation letter — that my reason for leaving was the decrease in the number of my hours. He said that the reduction in my hours would have been only temporary (but again specified no ending date) and that it was to begin only in October. He also said that he would look into the issue with the company’s accountant early next week and promised to get back to me.

    I have copies of the email in which my employer notified me that my hours were to be reduced and of my own resignation letter, in which I cite the reduced hours as my reason for leaving.

    What should I do? Please advise.

    Thank you so much. I appreciate your help.

  35. myt

    I am leaving Israel for an indefinite time period. Am I entitled to severance, from my company where I have been working for the past 3+ years.

  36. Moshe

    With the information you supplied in your question, It would appear that you are not eligible for severance pay since you are resigning your position which does not entitle you to severance pay. I assume you are counting on reason #10 above – moving 40 km or more, but that only applies within Israel.


  37. Moshe

    I sympathize and wish your wife a speedy recovery and good health, but the law doesn’t specify anything regarding health. In my opinion you are not eligible. try to speak to the employer and ask them to pay you severance pay despite the fact they are not obligated to. Maybe they will agree, especially if they were happy with your work. Sometimes companies tend to help out in personal situations. Best of luck.

  38. myt

    Hi Moshe,

    Sorry for not responding earlier. My wife has health issues, so she is presently abroad with her parents along with our son. For this reason, I will have to leave Israel for an indefinite period of time. Does this reason, entitle me to severance.

    Thank you,

  39. myt

    Moshe, thank you for time and your answer.

  40. H

    Hi Moshe,
    I recently was laid off. I received dmei chufsha and dmei havraah on my last tlush, but I don’t see anything written there about pitzuyim. According to what I’ve read, you get about 1 month of salary per year worked, for pitzyim when you are fired. How should I claim for that?

  41. Moshe

    TO: H (COMMENT #42
    You should draft a letter (dated and signed of course) and send it a.s.a.p. to the employer by registered mail. keep a copy of the letter as well as the receipt as it is proof you requested the severance pay. you may need this in labor court, if it comes to that.
    In the letter you should also request a 161 tax form as well as release letters for any pension plan, kupat gemel, bituach menahalim or keren hishtalmut plans you may have as well as an ishur ha’asaka (a letter verifying that you worked for the employer)

  42. Moshe

    Yosef, you need to demand it in writing from your employer. If they refuse or do not answer you can sue them in labor court, however, many times the employer will use the lame excuse that it was an oversight or something and the court usually accepts this. I would recomend you let it slide.
    Not because you are not entitled it, but the beaurocracy and time you will need to spend on this until it is decided isn’t really worth it, especially since they paid the pay itself.

  43. Yosef Billyack

    Hi Moshe,

    I was working for a company for less than 6 months when we parted ways (they fired me but claim I just left without the 30 days notice).

    They didn’t pay me my last months pay for 21 weeks. An accountant worked out how much money they owe me by law, including the late payment charge but they only paid me the amount owed to me if they paid me on time.

    How can I get the 205% that they still owe me?

    Thank you in advanced

  44. Mark Feldman

    Hey Moshe,

    I would like to quit my job and receive severence pay. I started with this job 1 match 2010. Is two weeks in advance enough notice? Do i necessary need to send my resignation letter by post or can I hand it in? Also, the reason I would like to move on is because we are getting a new marketing director (who also runs the office, hires and such..) can this go under the pretext of ‘change in employees?) if yes, if I give them 2 weeks notice before 1st match 2011 (then I assume I have completed that year? and how about holiday pay? is there a way I can get a pay for that as well? What would be the best way to go about doing that..

  45. Moshe

    Change of personnel / boss in itself is not considered “worsening of work conditions”.
    The amount of time you need to give advance notice is dependant on your base pay – if it’s monthly or hourly. Monthly paid employees need to give 1 day for each of the first 6 months worked and 2 1/2 days for each additional month – in your case: 6 + 2 1/2 * 5 = 18.5 days.
    for hourly paid employees – 1 day for each month worked (11 days)

    You must work these days unless your employer waives this (get it in writing).

    You should give always give notice in writing and hand it to your boss. If you can, make a copy and get it stamped “received” with a date, for your records.

    Holiday pay is mandatory – see my blog on that here:

    If it wasn’t paid demand it.
    Vacation days you have not used are paid out to you on the last payslip.


  46. jason

    Dear Moshe,

    I have a question: If I decide to quit my job and have not yet completed my year, am I entitled to vacation days? Also, would I be entitled to sick days? (even if I wasn’t not sick).

    secondly, if I do decide to complete my year, what rights can i expect? Sick days. are those included in the last pay check?

    Thank you in advance,


  47. Moshe

    Firstly, vacation days that you have accumulated to your credit and have not utilized are always paid out when an employee leaves his job, regardless of the reason and also regardless of how long they have worked. The amount of days you are eligible for annually is divided into 12 and you are credited per month, not annually.

    In the private sector, sick days are only paid when a person is sick. use them or lose them.
    In the public sector, there are certain conditions under which an employee recieves a buyout of unused sick days, but this is not a law nor required in the private sector.

    As for completing your year before leaving, I assume you would be resigning your position, you would only be eligible for severance pay if one of the conditions in this article apply to you.


  48. Moshe

    Author’s note and clarification:
    Due to several questions pertaining to #10 above (the 40 km issue). The following have been verified by legal counsel:
    1) The 40 km only applies within Israel.
    2) The “center” of one’s life is a major consideration for labor court’s rulings on this issue. In otherwords, you may have “moved” on paper but where you actually live and work will be the deciding factor.

  49. mark

    Hey Moshe,

    Thank you for your detailed response. I would like to just add my final question, I finally resigned from my previous job. I was wondering, the vacation days that I am entitled to, are they taxable?


  50. Moshe

    Your question isn’t really relevant to the article, but yes, vacation days are taxable as are everything else that’s paid out via the payslip, except severance pay which has a ceiling of 11,650 shekels (Jan 2011) for each full year worked, which is exempt. Anything more than that is taxable.

  51. Vlad

    Dear Moshe,

    I’m working for a Customer being outsourced by an HR Firm. The Customer pays to the Firm and then it pays to me.

    Unexpectedly, on 15.12.2010 I was informed that the Customer’s budget exhausted and my job in the project has to be terminated on 31.12.2010.
    The Customer informed the Firm and it gave me the notice of job termination, promising to pay the severance pay after 15.01.2011.
    The outsourcing Firm could not pay me for that month not receiving anything from the Customer.

    However, after 10 days of such an unemployment I was informed by the Customer that the project received an additional reduced budget for 3 months – until 31.03.2011. Since 11.01.2011 I’m working in the same project for 3 days a week.

    I’ve asked the Firm to give me the new job termination notice with 31.03.2011 as the last day of work.
    They refused, promising to find a new customer and a position for me during this period…

    My salary almost is not changed – in the form the missing days are marked as “paid vacation” (as I guess are paid from my own reserve or severance money).

    How to make the Firm to give me the job termination notice now?
    Do I have the right for my severance pay, if now I will ask the Firm to terminate my job on 31.03.2001?

    Thanks in advance,

  52. Moshe

    This is an issue for which you should contact me directly. The Q & A comments on this blog post are meant for short questions and not as a replacement for consultation.


  53. Vlad

    Hello Moshe,
    thank you for your fast response.

    I’ve to correct the detail: I got an e-mail from the Firm saying that they made a mistake in my salary calculation and overpaid for full four days. So really my salary is going to be much lower.

    How to contact you directly?
    Could you give me your phone or e-mail?
    I guess you have my e-mail.

    Thanks and best regards,

  54. Jacob Share

    Vlad- to contact Moshe for his consulting services, visit his company website, Israpay.

  55. anita

    my maternity leave has finished and i have decided not to go back to work in order to look after my child. i worked for 2.5 years and I think i can claim pitsuim. If i do claim it, can i ever go back to work in the same company? Would i have to pay back the pitsuim? thank you…..

  56. Moshe

    Hello Anita,
    If you resign your position in order to take care of your baby, the law recognizes your situation and your resignation is termed “termination” for all purposes, including severance pay. so the answer is yes you would be eligible.
    An employee who is paid severance pay cannot return to work for the same employer for 6 months, otherwise they would need to return the severance pay.

  57. anita

    thank you for your response, it was very helpful….. one more question…. would I also be able to claim unemployment benefit, after quitting my job in order to look after my baby? ( I am receiving pitsuim)

    Also if i have outstanding sick days, should i be paid out for those too?

    Thank you in advance


  58. Moshe

    Unemployment pay cannot be collected while you are on maternity leave. If you quit your job to look after your baby (at the end of your maternity leave or after the extended period of non-paid leave ends) you may be eligible if you meet the other criteria. see social security’s website for more information:
    you can also try to call their hotline *6050

    unused Sick-day balance is only paid out to public sector employees who have worked for at least 10 years and have used less than 65% of the allotted sick days. And even then it’s not paid out 100%. There is a set calculation as to how this is done, but it is irrelevant in the private sector.

    all the best


  59. Baruch

    Dear Jacob

    I worked part-time at my job and then switched to full-time. In terms of calculating severance pay for the period I worked part-time, would my company look at my last part-time pay slip (as I would expect) or at my last full-time pay slip (as someone suggested to me)?


  60. josh

    If I understand correctly, they are definitely not required to use your last pay slip, and this might only be a nice fringe benefit to management levels or if you have this stated in your contract. Many companies pay into a (your) severance fund every month as a percentage of your salary (not from it). If you leave the company and are eligible, the fund is released to you. If you are not eligible, they can simply pocket the money. Some companies do not bother to pay into the fund, or embezzle the money, and then might find it hard to pay up when the time comes.

  61. Moshe

    Answer to # 62 – Baruch
    Actually both are correct. In order to configure severance pay for someone who worked part-time for one period and full-time for another each period is considered a separate entity and a separate calculation would be done for each and then the sums be added together or you would configure the total amount for full-time then after figuring out the actual percent of time worked -multiply the total by the actual percent of time worked.
    example: someone worked 50% job for 1 year and full-time for another year. monthly salary was 10,000 sh
    2 years * 10,000 = 20,000 (for full-time)
    12 months * 50% = 6 months
    12 months 8 100% = 12 months
    total 18 months – 1.5 * 10,000 = 15,000

  62. Moshe

    Answer to # 63

    You don’t understand correctly as there are set laws on severance pay, how to configure them and has nothing to do with management level.
    Occasionally, a contract has better benefits than the basic law, in which case the contract presides. The law is there to ensure a basic level is adhered to.
    The severance pay portion is calculated from your base pay, but the employer pays it totally – it is not deducted from your pay. Since changes in the law in Jan 2008, severance pay is mandatory and the company can not pocket the money. They release it to the employee upon his leaving the employer.
    Not paying into the fund is a criminal offense and punishable by stiff fines and even imprisonment. Not to mention that the pension funds claim interest and link the base fee owed to the consumer index for late payments.
    Employees are encouraged to sign up on-line for a secure password and username to access their account on the pension plan’s site and keep tabs on when the employer deposits the money.
    The funds also send out quarterly and annually written reports to all fund members (these can also be printed with a click from the user’s area on the site).
    Reccuring infringements of pension plan rights should be reported to the Ministry of Labor’s hotline at 1800-354-354

  63. josh

    if someone works for five years, accrues a nice severance pay fund, but leaves for a better opportunity at a company across the street, wouldn’t the severance fund simply go back to the company? Is this fund a pension or for pitzui piturim?

  64. Moshe

    Since the law changes regarding mandatory pension plans were initiated, there is no such thing as severance pay fund. Severance pay is a portion of the pension plan and paid by the employer only.
    Today, it is rare that employers need to actually pay severance pay out of their own pocket, since 8.33 % usually covers it. In the public sector, especially with older pension plans, that have a lower % of severance pay, the employer sometimes needs to add to it. The severance pay is “paid” by releasing the accumulated funds to the employee via written consent to the fund and the employee upon end of employment.

  65. josh

    I apologize, something is not clear to me. We’ve talked above about when an employee is entitled to ‘pitzui piturim’ and when they are not (moving away 40 km, reduction of working conditions, etc… Are you saying that this law has changed and the employee is always entitled to the pitzuim, even if they choose to leave the company for ‘no justified reason’?

  66. Moshe

    That is exactly what I am saying. The employer releases the whole policy – all portions: employee’s, employer’s (including severance pay)
    They will hold onto the severance pay portion only in extreme cases of theft, etc

  67. jschutz

    Can someone working as a “volunteer” on a volunteer visa for an Israeli amuta
    ever be considered an employee with respect to severance pay entitlement, if he has been working long term (10 years) full time and receiving monthly stipends and financial benefits (money for rent and arnona) that exceed the legally required minimum wage?

  68. Moshe

    This is more a legal question which depends on your “legal status”. since your status is volunteer and not employee, to the best of my knowledge, I do not think it applies to you.
    If one has a volunteer visa they can not legally work, unless they get a work permit. The same applies to tourists. Even if they take on a job, it is risky for the employer as he can be heavily fined. The amounts that a volunteer receives is irrelevant to this and law regarding severance pay only applies to employees, i.e. Israeli citizens or those who have legal work permits.


    Thanks Moshe. I spoke with a local lawyer who told me that the courts tend to favor the worker in this kind of a situation, looking at the actual facts than visa status. In other words, if it looks like an employer/employee relationship, then severance should apply. In my case, after 10 years I did receive a work permit and then worked for 11 more years before being dismissed. When I began to receive a salary, my job, which was considered senior staff, did not change at all and neither did my net income.

  70. Liora

    After working for a company for nearly 8 years I have resigned to take care of my children. I resigned within the 9 months of having my last child. Additionally, I submitted my resignation in writing and gave a 30-day notice. My employer is resisting paying me severance as they say I should have given 3 months notice. Is it really reasonable to give an employer 3 months notice? As I understood it I followed the law and am entitled to severance. Did I not follow the law? What are the steps I need to take to push the issue?

  71. Moshe

    Liora, You are 100% right. The law specifies what advance notice is and an employer cannot add to it.
    Even if your contract specifies this and even if you sign it, it is still illegal and will not stand up in labor court.
    You are entitled to severance pay and it needs to be paid within 30 days.
    You need to get a 161 tax form, submit it to the tax authority office (make 2 copies beforehand) and fill out a 161 A tax form (this the tax authority will help you fill out)
    The tax authority should provide you with 2 letters for your employer – how much tax to deduct from your severance pay or whether it is tax free and the other just confirming that you submitted the 161 A form.
    If your employer refuses to pay, send them a registered letter (or get a lawyer to write one for you). If you don’t get an answer within 10 days you can suit the employer in labor court.
    If you have a pension fund, they need to give you a release letter addressed to the fund releasing the fund to you. You need to send a copy of the 161 to the fund along with other papers – contact them for more details.

    Best of luck


  72. Liora

    Thanks, Moshe, for your answer. I have a follow up question. A woman goes on maternity leave for 3 months and then returns to work. After she returns to work for a couple of months she then decides she would rather stay with her children, is she still entitled to severance as long as she resigns within the 9 months of giving birth to the last child?

  73. Moshe

    Liora, The answer is yes, as long as it’s within the 9 months since she gave birth.
    If a woman resigns to take care of baby and after 3 months starts to work for a different employer for higher pay, she is still eligible for severance pay.

    all the best

  74. becky

    i work in high tech and resigned from my work last week.

    our CEO promised the whole team this summer, that if anyone wanted to resign they would pay the pitsuim.

    i asked yesterday about this, first they told me that they will not pay it for me.

    i was employeed 1 year and 4 months. this was my first job in Israel, i have lived in Europe before.

    later they told me that they will pay me a littel amount, 2000 shekel. and that one more part of it. c 2000 shekel my CEO has to decide if he wants to pay.

    but my monthly salary has been 14 000 shekel. wo how could it be so low? i think they are bullshitting me…

    i have heard that it should be a bit more then a monthly salary.

    if anyone could help i would be really happy.

  75. Moshe Egel-Tal

    Hi Becky,

    First of all, unless one of the reasons listed in this article apply to you, if you resigned your position, you aren’t eligible for severance pay according to the law. However, if you can prove that the employer promised anyone who left would be paid severance pay (a recording or written notice for example) you would be able to get it, of course if the employer changed his mind you might have to sue in labor court. You could try that anyways and ask co-workers to testify that this is true. They may not want to do that for fear of losing their jobs, so you can ask the court that they testify w/o the employer’s knowledge or to summon them to testify.
    There also is another issue- if you were insured in a mandatory pension plan, the severance pay portion is yours in any case and the employer must release it to you. The amount of severance pay is one month per year worked and prorated for any portion of a year in addition. So for 1.4 years it would be 19,600 sh less the amount in the severance pay portion of the pension plan.
    Best of luck !

  76. Moshe Egel-Tal

    Josh, there is no contradiction. The reasons are still in effect and have not been nullified. What has changed is the mandatory pension plan law – which started in Jan 2008. It basically states that all employees are eligible by law for a pension plan if they didn’t already have one. The “waiting period” is 6 months from start date. However, if one had an existing plan from a prior employer that was active up until starting with the current employer, the wait period would be 3 months and the employer would need to start it retroactive to the employee’s start date. When anyone is eligible for severance pay the employer checks with the pension plan company to receive the severance pay portion balance in the employee’s plan. Once he has that information the employer can calculate how much the employee is due and deduct from that amount the balance of severance pay in the pension fund. The difference would be paid out via a payslip (separately itemized of course) to the employee. If the amount in the fund exceeds what is owed the employee or the employee is not eligible for severance pay – the funds are released to the employee and that’s it. There is another thing called article 14 – see the blog on this issue on my site – only relevant if the fund is not mandatory pension, rather full pension.

  77. josh

    Moshe, I still do not understand the contradiction here. If there is a mandatory pension plan, then the employer must release it. Why would someone (new or with seniority) not have the mandatory pension plan and if s/he could sue their former employer for not giving them the right to the pension plan.

    Given that, have the previous legal reasons to leave work and still get severance pay been annulled? If there is a mandatory pension plan, why are we still talking about severance pay?

    1. Moshe

      As I said, there is no contradition. Anyone with a pension plan from prior to 2008 (when the mandatory pension plan started) or employees who have personal contracts or work with an employer who signed a general collective agreement which entitles employees to higher % rates of contributions than the mandatory pension plan law, the law doesnt apply.
      Severance pay is also a law. Anyone eligible for severance pay, the employer needs to calculate how much the employee is entitled to and then deduct the current amount already in the pension plan in the severance pay contribution.
      There may be a payout in addition to releasing the funds and there may not.

  78. gila

    What happens if you resign after many years because you found a better job-are you entitled to vacation days and unused sick days and pizuim? How do you get these if entitled

  79. Moshe

    Unused vacation days are always paid out when you leave your position regardless of the reason.
    Sick days are use them or lose them. They are only paid out in the public sector and only under certain conditions.
    Severance pay (pitzuim) is only paid to employees who were terminated or resigned under explicit circumstances, specifically defined in the severance pay law, which garner their resignation as if they were terminated and would entitle them to severance pay. Finding a better job is not one of those reasons.
    You do not need to ask for any of these – it is done as part of the end reconciliation for any employee who leaves or is terminated. You can ask the payroll accountant. Everything should be itemized on your last payslip.

  80. Benji

    I started working at my employer 11.5 months ago. According to my working contract, he and I must give at least 2 weeks notice before leaving the company. About 18 days before my 1 year was complete, he gave me a 2 week notice.
    He gave me a letter saying that my separation from the company was “Hadadi”, mutual, and the date of my last day is 3 days before my 1 year at the company. I am going to ask the employer to change this document and remove the “mutual” wording.. Will this affect my ability for pitzuim, and unemployment if I need it, and he does not change the wording?
    In addition, the company has a “policy” where they don’t pay overtime (hi-tech). My contract is very clear that I am supposed to work 176 hours per month, paid hourly. I have accumulated and tracked over the last 6 months about 50 hours of overtime. I will present this to him in writing asking for wages. I understand the overtime hour wages that I can request, but what if he says no?

  81. Moshe

    The advance notice you received (assuming you received a monthly rated salary and not per hour or day) is not in compliance with the law. You are eligible for a 1 day fro each of the first 6 months of employment and another 2.5 days for each additional month, so you should get at least 18.5 days notice, if not 21 days. A contract cannot contradict the labor laws and if it does, the labor laws preside. This is a right that cannot be waived.
    If you don’t agree to leave, then you are definitely being terminated and you should receive a letter saying your position was terminated and why. If you apply for unemployment pay, you will need this letter and the wording on the proposed letter will make you ineligible. My guess is they chose that wording in order to avoid paying you severance pay. This and the fact that it is right before the end of 1 year of tenure. The law is on your side, an employee who is terminated after 11 months is still eligible for severance pay, though he may have to sue in labor court to get it, simply because the court sees this type of termination as a transparent reason to get out of paying severance pay.
    As for overtime, this is a bit more complicated. I suggest you contact me via my site and set up a consultation meeting. This is too lengthy to go into on this forum.

  82. blake

    hey moshe,

    i had been working at my job for about 8 or 9 months then i was fired. i was then rehired about two months later and it has been about 5 months since i am working. is it possible to get the severance pay if my boss fires me. thanks

    1. Moshe

      Hi Blake
      If you are rehired within less than six months from termination date, it is considered continuous.
      Yes, you would be entitled to severance pay if terminated.
      Best wishes

  83. Gerard

    Hi moshe,

    I work for 2,8 years with the company and they gave me a 30 day notice letter, terminating our contract
    I work on an hourly base and the hours vary, in the first 15months an avarege of 70 hours per week and later on bassically full-time. How should my pitzuim be caculated? Is it only over full-years worked, or over all months I worked?

    1. Moshe

      Hi Gerard
      If you worked part time for one period of time and full time for another period of time, each period should be calculated separately.
      If your base pay changed each month due to number of hours worked, the last 12 months are averaged out and that is the base for pension.

  84. Josephine

    Mr Share,

    What are the laws regarding severance pay in Israel for 2016?
    I have been employed for just under 2.5years.
    We are about to move offices (same building different floor)
    I have a new boss, he has been there for just over 3 months (I’m not a fan..)
    My employer has been good to me, so I don’t want to do anything wrong by the company.
    I have made up my mind and want out and believe I am entitled to severance pay.

    I have read your previous post on severance pay and am wondering if it still applies? The following points are particular of interest:

    1. Change of employers
    – Can this also be general management?

    2. Transfer of employee to another site with same employer
    – Can this be same building different office?

    3. Employee’s change of residential address (to over 40 km distance)
    – How long would I have to move for?

    4. Employer ignoring safety or health issues
    – Have you heard of any examples?

    What actually is the severance pay? Do you receive 3 months salary in total? Is it one payment or over 3 months?

    1. Moshe

      Hi Josephine
      Your questions are way too lengthy to address here. I suggest that you contact me privately to setup a consultation. This is a paid service. More info can be found on my website:
      You also might find my Employee’s Rights Handbook usefull.

  85. Esti

    Hello Moshe,

    I am not an Israeli citizen and have been working in Israeli IT company over 10 years.
    Because the ministry of interior did not allow to extend my working visa, i should stop working in that company.
    I wonder in that case, i am entitled to receive unemployment compensation (דמי אבטלה)?
    Due to some other issues, i may stay in israel for a few months.

    1. Esti

      i forgot to mention that i worked there with Foreign worker visa. it means, i do not have permanent/temporary residence status even.

      1. Moshe

        Hello Esti
        Unemploynent is paid by Israel social security (Bituach Leumi) and the criteria are on their website (in English too). One of the basic criteria is that someone is ensured for unemployment and has paid via their payslip for at least 12 consecutive months. Not everyone who is a salaried employee is ensured. It depends on your status (new immigrant, Israeli citizen, tourist, pensioner, etc. The status defines what percent of your gross pay goes to bituach leumi and as result, what coverage you have.

  86. Jeny

    Hi Moshe,

    I have been working for the same company for over two years. I will be moving abroad with my family. Will I be entitled to pitsuim? or the 40 km rule apply for move within Israel only?
    Thank you so much

    1. Moshe

      Hi Jeny
      This law applies only within Israel, unfortunately for you. However, if you are married and your husband took an Israeli govt. position abroad, you would be eligible.
      As oppossed to the past when employers paid out severance pay via the payslip, today, any monies accrued in your name in a pension plan are always released to you (except in extreme circumstances, such as theft by the employee). The only difference being that the employer does not need to the accrued amount.
      Note that while you may not be able to access this money immediately, it is transferred to your ownership.
      Even if it is accesssable, it is highly suggested that you consult a certified pension plan advisor prior to requesting a withdrawl as there may be taxation and you almost certainly impede the sum of future pension plan payouts in a range of 30%!

  87. Mary

    HI Moshe,

    I work in the same company for about 2 years, I have a monthly salary and get bonus on top of that, my boss changed the way bonus are calculated and as a result salary is reduced. Would I get pitsuim if I quit?


    1. Moshe

      A bonus is not a mandatory payment. Employers can decide to give one, or not and to whom. They can also deternine and change the criteria.
      As such a bonus is not considered salary for purpose of resigning one’s position due to worsening of work conditions.
      The answer is no.
      However, since the inception of mandatory pension law in Jan 2008, the accumulated monies in the severance pay portion are released to the employee.

  88. kevin

    I work in restaurant for 10 months and my agent refuse to give me my hours an I want to stop, will I get paid for that

    1. Moshe

      I do not understand what you mean by an agent.
      payment is mandatory by law by the 9th of the month for the previous month’s salary. It is gorbidden to withold. You can resign your position immediately and suit in labor court. you need to notify your employer in writing of your resignation and the reason.

  89. Prince

    I have been working with Magic Sunrise club for 16 months and I have to go back to my country…
    so I give the hotel one months notes…but the manager gives me off the holy month …
    and they never paid me anything… so plz, an info on how to go about it?

  90. mani

    i am indian work for israeli company in india since 2011,
    about nine years,
    now i want to leave the company.
    what is procedure to get settlement or any cash benefit??
    i am totally confused to get information,
    please give me the right way to get benefit.
    send me mail mail about it.

    1. Jacob Share

      Hi Mani
      Have you checked with a local government’s employment office? They should have that kind of information for you, perhaps on their website. In many countries, if you simply decide to quit, you won’t usually receive a settlement or other cash benefit although if you have any unused vacation days owed to you, you could probably get them paid out to you instead. However, 9 years is a long time for a loyal employee and you may be able to negotiate leaving with a settlement if for example your employer would prefer to replace you with someone else for whatever reasons (perhaps at lower pay?).

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