War and the Workplace- A Proposed Outline on Unpaid Leave and Updates for Private and Public Sector Employees

Following our previous updates regarding the recent conflict with Iran and its impact on workplaces, we would like to inform you that a memorandum of law has been published. If passed into legislation, it will authorize the payment of unemployment benefits to employees who were absent from work due to directives issued by the Home Front Command prohibiting workplace activity.

This memorandum of law outlines a series of temporary relief measures regarding eligibility for unemployment benefits during the period from Friday, June 13, 2025 to Tuesday, June 24, 2025, when workplace activity was restricted under Home Front Command directives:

• During this period, unemployment benefits will be paid to employees placed on unpaid leave for 12 days, instead of the standard minimum 30-day period required by law. If an employee worked one day during this period (due to temporary easing of restrictions) it will not affect their eligibility for unemployment benefits.
• The qualifying period for unemployment benefits will be reduced to six months of National Insurance contributions within the past 18 months (instead of 12 months).
• The standard deduction of payment for the first five days of unemployment will not apply in this case.
• Employees will be eligible for unemployment benefits even if they are entitled to vacation pay, and they will not be required to use vacation days to qualify.

In addition, the memorandum of law clarifies that the period of unpaid leave will not be counted towards the 60-day post birth and parenting period protection. It also states that placing employees on unpaid leave will not be considered an adverse employment action that requires a permit under the Employment of Women Law, 5714-1954.

The memorandum of law further provides for a special grant to employees aged 67 and over who were placed on unpaid leave and are not eligible for unemployment benefits.

Please note: Since the legislative process will not be completed before June 2025 payroll is processed, it is especially important to maintain accurate documentation of employee absences during the period of the conflict.

Once the legislative process is finalized, the National Insurance Institute is expected to issue detailed instructions on how to apply for compensation for this period of absence from work.

Employers seeking clarification regarding payment options for employees who were absent from work are invited to seek individual legal advice.

Public Sector Employers should also take note that pursuant to understandings reached between the Ministry of Finance and the Histadrut, a collective agreement addressing payment to public sector employees absent during the conflict is expected to be signed in the coming days. Employers in the public sector who require assistance or clarification are likewise invited to seek personal guidance.

Additionally, we would like to inform you that the government is advancing a draft amendment to the Law for the Protection of Workers in Times of Emergency. Under this amendment, employees evacuated from their homes due to war-related damage during the conflict with Iran will be protected from dismissal for a period of three months from the date of evacuation.

We are also pleased to share that, following the conclusion of the Iran campaign, Israeli airspace reopened as of June 25, 2025. Travel to Israel is now unrestricted. Several foreign airlines have already resumed flights and more are expected to follow.

We will continue to keep you informed of further developments and their implications for the workplace.

Labour Law Department

Herzog Fox & Neeman