What Israeli Employers Need to Know About the Hours of Work and Rest Law

Israel's Hours of Work and Rest Law, 5711-1951, sets how many hours an employee may work and when overtime begins, how overtime is paid and what weekly rest every employee is entitled to. It has been on the books for over seventy years, and plenty of employers, mostly small and mid-sized businesses, still get the details wrong.

The mistakes are usually small, like a third overtime hour paid at 125% instead of 150%. The trouble is that they repeat every month, and after a year or two they add up to a sizeable debt. Sometimes a claim follows.

The regular work week

Since 2018 the standard full-time week in Israel has been 42 hours. How those hours divide into days depends on how your week is set up. In a five-day week the usual pattern is four days of 8.6 hours and one shorter day of 7.6 hours. In a six-day week the hours are split differently, and one of the days is usually shorter.

A collective agreement, an extension order or a personal contract can give employees better terms, and when it does, those terms apply. So before you set a policy, check which arrangement covers each group of employees. A company with both a factory and an office may well get a different answer for each.

Overtime

Every hour beyond the regular working day or the regular working week is an overtime hour. The first two overtime hours in a day are paid at no less than 125% of the regular hourly rate, and every overtime hour from the third onward at no less than 150%.

Note that the definition covers the week as well as the day. An employee can stay within the daily norm every day and still finish the week with overtime. Calculating day by day misses those hours, and it is one of the most common errors we come across.

Overtime is also capped per day and per week, and some situations require a special permit. The employee's agreement doesn't lift the limits, and staying within them is the employer's responsibility.

Two more mistakes come up again and again. One is a flat "global" overtime payment that was never properly arranged and isn't backed by any tracking of the hours worked. The other is routinely rounding clock-in and clock-out times in the employer's favor. A few minutes at each end of the day add up over a year to several full working days.

Weekly rest

Every employee is entitled to at least 36 consecutive hours of rest each week. For Jewish employees the rest period includes Shabbat. For employees who are not Jewish it can fall on Friday, Saturday or Sunday, according to their custom.

Employing someone during their weekly rest is allowed only where the law permits it or under an appropriate permit. An employee who works during weekly rest is entitled to at least 150% of the regular wage, plus alternative rest. Plan the alternative rest when you put someone on a weekend or holiday shift. If you leave it until the end of the month, it is hard to find room for it in the schedule.

Record-keeping

The law requires employers to keep records of working hours, overtime and work during weekly rest. In practice that means an accurate clock-in and clock-out time for every working day, kept long enough that you can produce it in an inspection or a legal proceeding. The payslip should reflect the same data in enough detail for the employee to see what they were paid for.

Without proper records, the burden of proof may shift to the employer. If an employee says they worked overtime and were never paid for it, that claim is very hard to refute without reliable data. We have met quite a few employers who were sure they had paid correctly and had no way of proving it.

A few recommendations for managers

1. Decide for each department or group of employees whether it works a five-day or a six-day week, and put it in the contract.
2. Approve overtime in advance where you can, to keep the cost under control and stay within the limits.
3. Go through exceptions once a week. By the end of the month most of them are too late to fix.
4. Explain to employees how their hours are recorded and how overtime pay is worked out. People who understand the calculation are less suspicious of it, and that saves a lot of arguments.

In Clockey you set up each employee's work contract (week structure, daily hours, overtime rules and holidays), and the system uses it to calculate regular hours, hours at 125% and 150%, and work during weekly rest. Employees clock in from the app or a browser inside defined reporting zones, and managers are alerted to exceptions before the month is closed.

This article is for general information only and is not legal advice. For a specific case, consult an employment lawyer or a payroll advisor.