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Navigating Employee Rights in Insolvency: A Guide to Israeli Regulations

In times of insolvency, it's essential to prioritize your employees' financial rights. Our concise guide outlines key steps, from severance to unused vacation days, to ensure you stay compliant and avoid legal missteps

Abstract Background

Are you prepared to handle your employees’ financial rights upon insolvency?

Failing to do so can lead to a breach of their legal rights and potentially serious consequences for your business.


Here are the crucial tips to consider:

  1. Set your employees' termination date based on your budget, considering their final salary, as well as any social benefits and notice periods they are entitled to.

  2. If you are having difficulty paying your employees' final salary, pay as much as you can to cover their entitlements, but in any case, no less than the minimum wage in Israel.

  3. Remember that severance payment is still mandatory. If Section 14 of the Israeli severance law does not apply to the company's severance payments, but the company has been making monthly (or other periodic) payments, you should check the accumulated amount in the severance component before paying the required compensation.

  4. In certain circumstances, you may want to consider asking your employees to use their unused vacation days.

By settling your employees' final entitlements upon termination, you not only fulfill your legal obligations but also protect their financial stability and safeguard yourself from paying additional compensation due to any delays in settling their entitlements.

Our team is always available to assist you in executing these procedures properly and planning for the future.


Contact us today to learn more about how we can help.

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