Dear Clients and Colleagues,

On July 30, 2020, we updated you of the Supreme Court’s ruling, which cancelled the validity of the comprehensive medical leave certificate issued by the Ministry of Health, by virtue of which employers were required to pay sick leave to employees in quarantine. In order to allow time for the authorities to make the necessary preparations for the implementation of this change, the order was set to enter into effect on September 30, 2020 (a date that was postponed to October 28, 2020).

Since then, there have been various attempts to regulate the matter. The Knesset ultimately approved an amendment to legislation (that was officially published on November 19, 2020), rearranging the matter of payment to employees in quarantine, and the indemnification employers can seek from the State on account of such payment.

We will lay out below a collection of question and answers following the amendment. Employers facing questions regarding the implementation of the new arrangement are welcome to approach us for specific assistance.

 

What are employees on quarantine entitled to receive for such days of absence?

According to the previous arrangement, employees were entitled to payment of sick pay for days on which they were in quarantine, while using the sick days accrued in their favour. Upon utilizing all accrued sick days, employees were no longer entitled to payment from the employer (however, employees could ask to utilize accrued vacation days).

According to the new arrangement, employees will be entitled to payment for quarantine days (including for days on which an employees’ child is in quarantine), with the exception of the first day of quarantine (unless the employee asks to utilize an accrued vacation day on such day). Employees should provide their employer with a copy of their report to the Ministry of Health regarding their being in quarantine, up to seven days prior to the date of payment of their salary, in order for the quarantine payment to be paid as part of the salary. If the employee provides the report at a later time – the employer will pay the quarantine payment together with the next salary.

An Employee’s absence due to quarantine is equivalent to an employee’s absence due to sick leave, and quarantine pay is equivalent to sick leave pay, including for the purpose of the prohibition on termination, conducting of social contributions and accumulation of length of service at the workplace.

 

Are Quarantine Days utilized on account of Employees’ accrued sick leave days?

According to the previous arrangement, quarantine days were credited against the employees’ accrued sick leave days, until full utilization of the employees’ accrued sick leave.

According to the new arrangement, the days for which employees receive payment for quarantine are deducted from the employees’ accrued sick leave days, up to a maximum of 4 work days for each period during which the employee is required to be in quarantine. In this context, work days are defined as days on which the employee works, according to the employee’s regular scope of position, meaning that weekends should not be taken into account as days on which quarantine days are deducted as sick leave days (as opposed to the situation in relation to the deduction of “regular” sick leave days).

 

What happens if employees have utilized all of their accrued sick leave entitlement?

According to the previous arrangement, employees who utilized all of their accrued sick leave entitlement were not entitled to payment from the employer for days of quarantine (however, the employees could ask to utilize accrued vacation days).

According to the new arrangement, if the employees do not have any accrued sick leave entitlement, then, up to four days for each quarantine period, will be deducted from the employees’ future sick leave entitlement (meaning that the employee will enter into a negative accrual of sick leave days). In the event that the employment relations between the parties end, without the employee having a chance to accrue sufficient sick leave entitlement – the remainder will be set-off against the employees’ accrued vacation days. However, if the employee does not have a sufficient accrual of vacation days, the debt will not be set-off within the settlement of accounts conducted at the end of the relationship.

 

Who is not subject to the new arrangement?

The new arrangement does not apply to employees who are required to be in quarantine after returning to Israel from another country. In general, if the employee was abroad for his/her own reasons, he/she are not entitled to payment for quarantine days, and shall not be entitled to utilize their sick leave days for this purpose (they can however utilize accrued vacation days). If the employee was sent abroad by the employer, he/she shall be entitled to payment of quarantine days from the employer for all of the work days during which he/she will be in quarantine.

Furthermore, the new arrangement does not apply to employees who are in quarantine due to an illness caused by a Covid-19 infection. Such employees, who are sick due to a Covid-19 infection and thus required to be in quarantine, are regarded as any other sick employee, and entitled to sick leave as such.

 

What happens with employees who work from home while on quarantine?

The new arrangement (similarly to the previous arrangement), also states that employees who perform their work while on quarantine are entitled to payment of their salary. In such case, there is no entitlement to payment of quarantine pay, and there should be no deduction from the employees’ accrued sick leave days.

 

What happens when the employer has a beneficial arrangement for payment of sick leave?

Under the new arrangement, employers in the private sector, are not required to pay their employees for the first day of absence due to quarantine. This is the case, even if the workplace has a beneficial arrangement in place (whether a personal or a collective arrangement), in relation to the payment of sick leave or quarantine pay, as long as they notify their employees of such.

However, where a beneficial arrangement applies to employers in the public sector, in relation to the payment of sick leave or quarantine pay, by virtue of law, a collective agreement or a personal agreement, such employers are required to pay the employees for the first day of their absence, in accordance with such arrangement.

 

What indemnification will employers be entitled to, for paying for their employees’ quarantine?

The previous arrangement did not put in place any indemnification mechanism, and employers were required to bear the cost of paying for their employees’ quarantine, and similarly, employees were required to bear the burden of utilizing their accrued sick leave (or vacation days) for the term of their quarantine.

According to the new arrangement, employers in the private sector will be entitled to indemnification from the State for days on which their employees reported their quarantine, and received quarantine payment, based on the following mechanism:

• For one working day for which the employer paid its employees quarantine pay, the employer will be entitled to indemnification at a rate of 100%. This entitlement shall not apply in the event that the employer pays quarantine pay because the employee conducted a trip abroad at the employer’s initiative, or if the employer pays the employee for the first day of quarantine, by virtue of a beneficial arrangement.
• For the rest of the working days for which quarantine pay was paid – employers that, as of August 1, 2020, employed up to 20 employees, shall be entitled to indemnification of 75%, and employers that employed over 20 employees, shall be entitled to indemnification of 50%.
• The entitlement to indemnification is for payment of quarantine pay for working days during which the employee was absent, meaning that there is no entitlement to indemnification for an employee being in quarantine during the weekend. The entitlement to indemnification is for 5 days a week at the most, for workplaces that work a 5 day workweek, and 6 days at the most, for workplaces that work a 6 day workweek.
• There is no entitlement to indemnification where the employee continued to work during quarantine, and received his/her salary from the employer.
• Employers that wish to receive indemnification must submit an online application to the National Insurance Institute (“NII“), in accordance with the instructions provided on the NII’s website. Employers should submit such applications within 60 days of the end of the month in which the employees’ quarantine ended. Employers may submit applications for indemnification beginning on February 1, 2021.

 

When will the new arrangement enter into effect?

The new arrangement shall apply retroactively as of October 29, 2020. However, employers that paid their employees sick leave for quarantine absence (which was unrelated to sickness) as of October 1, 2020, shall be entitled to indemnification for these days.

 

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We will continue to update you of any changes and developments resulting from the Covid-19 outbreak, and affecting employers and workplaces. As always, we are at your disposal for any specific advice.

 

The Labour and Employment Department

Herzog, Fox & Neeman