Dear Clients and Friends,

We continue to update you on matters related to employment law during this difficult time of war. We take this opportunity to provide you with some high-level information regarding the unique framework of military reserve service in Israel.

Background

According to local law, certain individuals in Israel are required to perform military reserve service (known in Hebrew as “Miluim”) in order to reinforce the Israeli Defense Forces (IDF).

Applicable Ages for Reserve Duty

As a general rule (subject to various exceptions), non-officers are required to serve up to the age of 40, while officers are required to serve up to the age of 45. Older individuals may continue to serve on a voluntary basis. Once they have volunteered, they are considered as reservists for all intents and purposes.

General Amount of Reserve Service Days

In general, non-officers may be called up to reserve service of up to 42 days per year and not more than 54-70 days during a three-year period (depending on whether they serve as commanders). Officers may be called up to reserve service of up to 42 days per year and not more than 84 days during a three-year period.

“Article 8” Order

Article 8 of the Reserve Service Law, 2008 empowers the Minister of Defense, with the approval of the government, to call up reservists for unlimited and immediate active service “in emergency situations and after being convinced that the national security so requires”.

Following the declaration of the Security Cabinet of the Government of the State of Israel of a “state of war” as of October 7, 2023, the Minister of Defense activated the above Article 8.

In practice, as of October 7, 2023, more than 300,000 reservists have been called up to reserve service in order to reinforce and strengthen the IDF during the war. As mentioned above, due to the current state of war, service in accordance with Article 8 is not limited in time.

Compensation

In general, employers pay and withhold national insurance fees each month from their employees’ payments. These fees are wired to the National Insurance Institute (“NII”), which is one of the pillars on which Israeli social policy rests. The NII pays various allowances to insured residents, subject to their meeting certain conditions; these allowances include, among others, reserve service allowance.

As a general rule (subject to various exceptions), during reserve service, employers are required to continue to pay their employees their regular salary and all other benefits. Subsequently, the NII reimburses these employers for the payments paid to their employees, up to a cap of NIS 1,582.17 per day / NIS 47,465 per month (these amounts have been applicable since January 1, 2023).

In the event that the reimbursement amount paid by the NII is greater than the salary paid by the employer, then the employer is required to provide the employee with such excess reimbursement.

We note that employers can usually apply for reimbursement from the NII only following the conclusion of the employee’s reserve service. However, in accordance with a temporary order of the NII, due to the current state of war in Israel and in order to support employers during this state of emergency, employers may request the reimbursement during the war on a monthly basis, provided that the employer pays the reservists’ salaries on time.

In this context, we mention that the NII has clarified its expectation that large corporations (which are not subject to cash flow difficulties) give priority to small and medium businesses, as a demonstration of responsibility and solidarity.

The above is in accordance with general law. Specific circumstances or provisions in the employee’s employment agreement or practices in the workplace, may provide additional benefits.

Protection against Termination

It is prohibited to terminate employees’ employment because they were called up to reserve service. In addition, employees are protected against termination of employment both during reserve service, and, if the service exceeded two consecutive days, the protection also applies for a period of 30 days following the conclusion of the service.

We note that the above protection period cannot run concurrently with any period of prior notice for termination.

Rights of Partners of Reservists

Full-time employees whose spouses perform military reserve service of more than 5 days, and need to take care of their child who is younger than 13 years old, are entitled to be absent for one hour per day without reduction in pay.

Specific Issues and Open Questions

The current state of war which required a massive recruitment of reservists, raises many questions and challenges. For example: how to deal with a new employee who started reserve service before or right after their commencement date; what are the rights and obligations of an Israeli national who lives outside of Israel and was summoned to reserve service or would like to volunteer for reserve service; what payments should be included in the compensation paid for reservists; and many more.

As always, we are at your disposal for any questions you may be facing with respect to the above and with respect to any other questions you may have regarding employment during war time.

We would like to thank you for the support you have shared with us during this difficult time.

Praying for quieter and peaceful days

Labour & Employment Law Department
Herzog Fox & Neeman