Severance Pay
An employee who has worked for an employer for a year is entitled to severance pay from the employer, at the rate of one month’s pay for each year of employment at that employer, as long as the employment is terminated by the employer without cause.

Some employers may voluntarily pay their employees severance pay, even if the employees would not otherwise be entitled by law or contract.  Some employment agreements may entitle employees to more generous severance terms than those provided by the law (i.e. parachutes).

Before terminating the employment relationship, the employer must provide the employee with advance written notice. The length of the advance notice period to which the recipient is entitled, in the absence of agreement to more generous terms, depends on such factors as the type of employment basis (e.g. daily, monthly, open-ended) and the amount of time that the employee worked for that employer. For employees who are not hourly employees (e.g. for full time employees), it is 1 day for each of the first 6 months, 6 days plus 2.5 days for months 7 through 12 and one month after a full year.  For employees who are on an hourly basis, it is 1 day per month for the first year, 14 days plus 2 days per every 2 months in the second year, 21 days plus 1day for every 2 months in the third year and one full month after 3 years.

Employers and employees can agree to more notice but not less, and the notice agreed upon applies both to dismissal and resignation.

The employer may decide to allow (or require) the employee not to come to work during the advance notice period, but must still pay her normal salary during that period.  The parties may agree on a longer notification period than that prescribed by the law, but not on a shorter one.

Generally, the obligation to provide the advance notice applies in the absence of termination (by the employer or employee, as relevant) for cause.

Upon termination, the employer is also required to provide the employee, within the earlier of 14 days of the date of termination or a week of the employee’s request, with written confirmation of the period of the employee’s employment (including beginning and ending dates).

Thanks to guest contributor Adv. Russell Mayer ( for providing the above information.

If you are fired or laid off, here is the procedure you must follow in order to receive unemployment benefits:

  1. Register with your local branch of Sherut HaTaasuka (Employment Office).
  2. File a claim with Bitauch Leumi (National Insurance Institute).

NOTE: Olim who have been in Israel for less than one year follow a different procedure. If there is no income in the household six months after Aliyah, the individual/family is entitled to unemployment benefits, but the process is administered by Misrad HaKlita.

Lishkat HaTaasuka (Employment Office)
You must register with your local Lishkat HaTaasuka before filing a claim with Bituach Leumi. You must bring your Teudat Zehut with you and declare that you are not working but are ready and willing to do so when you find suitable employment.

The role of Lishkat HaTaasuka is to help find you suitable employment. The office has two separate tracks: one for those who have an academic degree and the other for those who do not. If you have an academic degree from abroad, it must be officially recognized by Misrad HaChinuch. In order to have the degree recognized, please bring your documents to the Misrad HaChinuch offices in Jerusalem at 2 Devorah HaNeviah, Komah 0, Room 8. The phone number is (02)560-2853, and the office is open to the public from 10 – 1 on Mondays and Wednesdays. As the recognition process can take several weeks, it is recommended that you register with Lishkat HaTaasuka first and then bring your documents to Misrad HaChinuch so that you can begin the process of receiving unemployment benefits.

An individual’s education, skills and experience are taken into account in trying to find appropriate employment. You are obligated to follow up on job leads and suggestions that are brought to you by the counselor. Please be aware that if the employment counselor finds you a job that is considered suitable and you choose not to accept it, your unemployment benefits may cease.

The counselor will assign you a set follow up plan. Those under the age of 50 must appear at the office once a week while those over age 50 must appear once a month.

If you find part time employment during this time, you are obligated to inform your employment counselor, but, depending on the wage and conditions, it may not affect your benefits.

For a listing of Lishkat Taasuka branch offices, click here.

For details about the Employment Office, please click here

Bituach Leumi
Bituach Leumi is the agency that determines eligibility for unemployment insurance and issues the payments. The purpose of unemployment insurance is to provide a person who is unemployed against his/her will with alternative income for a limited period, in order to enable him/her to look for appropriate employment. Those who quit their jobs may be entitled to unemployment benefits starting 90 days from their last day of work but this is to be determined by Bituach Leumi.

In order to receive unemployment benefits for the first time, you must apply to the Bituach Leumi branch near your place of residence and submit a claim for payment. You must have worked for an Israeli employer for at least 12 months consecutively or, if not consecutive, then for at least 300 days out of the previous year and a half. If you had been working for a foreign employer, you are not entitled to benefits.

The following documents must be presented:

  1. A completed Bituach Leumi unemployment claim form which is available online or at the Lishkat HaTaasuka.
  2. A letter from your employer citing the reason for your termination and the start and end dates of your employment.
  3. Monthly salary stubs from at least the previous 12 months which include the number of days worked each month.

If eligible, you will receive a monthly payment from Bituach Leumi. The sum is calculated as a daily rate and is based on a percentage of your previous monthly salary, but the maximum that can be received is 7,600 NIS per month.

The payments will be retroactive from the day that you registered with Lishkat HaTaasuka — not from the day that you stopped working — so it is important to register with the Lishka immediately upon termination.

The length of the period for which unemployment benefits will be received is based on age and the number of children you have. The maximum number of days for which the benefits can received is 175 (not including Shabbat and holidays) – and this length is generally for people over the age of 45. Those between the ages of 35 and 45 generally receive benefits for 138 days and those under age 35 generally receive the benefits for 100 days – but these amounts can be increased based on the number of children you have and will be determined by Bituach Leumi. After 125 days of benefits, the daily amount received is reduced.

You are allowed to file for unemployment benefits twice in a four year period. If you filed with Bituach Leumi, began receiving payments, found work and then were fired or laid off again, you will be entitled to restart the payments if you did not use the maximum number of days to which you were entitled originally. If you did use the maximum number of days, found work and then were unemployed again, you can re-apply for unemployment payments but it is considered a second round.

Additional details as to eligibility requirements for unemployment benefits can be found on the Bituach Leumi website.  For additional questions, please contact your local branch of Bituach Leumi or call: *6050 or 12226050

For a translated version of the employment claim form, please see: Bituah Leumi – T1500 unemployment Nov13.

Guest Contributor: Russell Mayer

We bring to your attention an important development in the field of labor law and practice in Israel. By way of background, there has been a historic obligation upon public entities to give their employees Zechut Shimu’ah (i.e. right to an internal hearing) before they are dismissed. Over the past few years, the labor courts have been expanding the obligation which falls upon employers – by imposing it first to “quasi-public” entities and, recently, to the private sector.

While it has always been the rule that termination of an employee must be done in good faith, for legitimate business reasons, not in violation of any protective provisions of any law and without being based upon prohibited discrimination, it is now generally accepted that all employers in Israel are required to give their employees Zechut Shimu’ah before they are dismissed.

The generally accepted procedure is, in broad terms, as follows:

(a) The employee should be presented with the reason for termination or non-renewal of a fixed term employment arrangement;

(b) The employee should be given a reasonable opportunity to respond to the basis for their termination or non-renewal at an internal hearing which is to be scheduled for a reasonable number of days after having been notified of the reasons for the intended termination;

(c) The employee may bring an advisor to the internal hearing;

(d) The internal hearing should be conducted in good faith and with an open mind to considering the employee’s arguments; and

(e) The employer should keep a record/protocol of that which transpires in the internal hearing.

Failure to provide the requisite opportunity may not only give rise to challenge of the termination itself but for damages to be awarded to the employee such as for pain and suffering in addition to those for unjust termination.

While some unique, mitigating circumstances may dictate termination without strictly following all of the rules for an internal hearing, employers would be well-advised to minimize those occasions, only do so when absolutely necessary and, in any event, act in good faith.

* * *

This memorandum is not to be considered as a legal opinion. For legal advice, we suggest you contact legal counsel directly. R.D.M.

2008 – All rights reserved


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The following article appeared on January 4, 2009 on the Haaretz website.

The recent wave of layoffs has sent the newly unemployed scurrying in the bureaucratic wheels of the severance process. Here are a few tips to surviving while temporarily out of the rat race.

The most important thing is to be sure to fill out all the necessary forms and track their progress, to maximize your severance rights.

Yoni Kuperman, CEO of Tmura financial arrangements group, offers the following FAQ guide to the bureaucratic maze:

Employers are directly responsible for paying severance. Most companies that deduct and deposit money in pension and provident funds on behalf of individual employees also set aside money in a severance pay fund.

When an employee’s services are terminated, the money in that fund is transferred directly to him only after he asks for it.

Severance pay is subject to income tax, but some of the money is tax exempt. The exemption applies to a sum equal to an employee’s monthly wage (up to a limit of NIS 10,500, as of January 2008) multiplied by the number of years at a workplace.

Thus if a person worked for five years and his final monthly salary was NIS 11,000, only NIS 52,500 of the NIS 55,000 severance pay due him would be income tax free. The remaining NIS 2,500 would be taxable.

For the full article please click here

Online Resources

  1. Unemployment benefits: Additional details as to eligibility requirements can be found on the Bituach Leumi website.
  2. Recent Olim: If you made Aliyah within the last year, unemployment follows a different procedure. If there is no income in the household six months after your Aliyah, you are entitled to unemployment benefits, but the process is administered by Misrad HaKlita. For details please see: Unemployment Benefits for New Olim.
  3. Lishkat Taasuka: For a listing of branch offices, please see Lishkat Taasuka Braches.
  4. The Israeli Employment Service: For further information about collecting unemployment, please see the following link.



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