A brief guide to hiring foreign workers and insuring foreign workers

Dec 25, 2023

By: Itzick Simon

Almost all sectors of the Israeli economy were hit by the war, but it turns out that only in the construction industry is the main cause of harm to economic activity a shortage of manpower.

The industry, which relied on some 80,000 legal Palestinian workers, is now in crisis. Not only because the Palestinian workers are not returning to their jobs, but also because it is highly likely that many of them will not return in the future.

As an insurance agency that works with countless contractors and entrepreneurs from all over the country, both small and large, we are aware of this clear and immediate predicament firsthand and from conversations in the field. In light of the many questions, we have seen fit to raise a number of important points with you in the context of employing foreign workers and insuring foreign workers.

By: Itzick Simon

Almost all sectors of the Israeli economy were hit by the war, but it turns out that only in the construction industry is the main cause of harm to economic activity a shortage of manpower.

As an insurance agency that works with countless contractors and entrepreneurs from all over the country, both large and small, we are aware of this clear and immediate predicament firsthand and from conversations in the field. In light of the many questions, we have seen fit to raise with you a number of important points in the context of employing foreign workers and insuring foreign workers.

Employing foreign workers in the construction industry

According to Israeli law, only a registered and licensed contractor who performs construction work is permitted to employ foreign workers from abroad, and this only on construction sites and in four specific professions :

· Ironwork (combining steel with concrete).

· Formwork (building the molds into which the concrete is poured).

· Floors.

· Plastering.

If the worker's main work is in ironwork or climbing, he may be employed secondarily in a small amount of framing or welding work, as part of the skeleton work (subject to his consent). In addition, there is no obstacle for workers employed in at least one of the four above-mentioned professions to also work in "wet work" according to the following specifications:

· Work related to the structure's skeleton, including climbing, ironwork, and assembly of industrialized elements.

· Infrastructure preparation work only for building systems (electricity, communications, lighting, air conditioning, water and sewage drainage and channeling).

· Works to lay environmental infrastructure (kerbstones, sidewalks).

· Aluminum works and frames.

· Works in Neot.

· Exterior and interior cladding and flooring works.

· Waterproofing works.

· Construction work – construction of interior and exterior walls.

· Plastering and painting work.

Employment in any other position is prohibited by law , including management and supervisory positions of course. Please note that this is not a trivial matter. In the event of an accident involving a vehicle, which causes damage to the body or property, illegal employment may be detrimental to whoever is found responsible for it.

על פי החוק בישראל, רק קבלן רשום ובעל רישיון, אשר מבצע עבודות בנייה, רשאי להעסיק עובדים זרים מחו"ל, וזאת רק באתרי בנייה ובארבעה מקצועות ספציפיים:

· ברזלנות (שילוב פלדה בבטון).

· טפסנות (הקמת התבניות אשר לתוכן יוצקים את הבטון).

· רצפות.

· טייחות.

באם עיקר עבודת העובד היא בברזלנות או בטפסנות, מותר להעסיקו באופן משני גם במעט עבודות מסגרות או רתכות, במסגרת עבודות השלד (בכפוף להסכמתו). בנוסף אין מניעה שהעובדים המועסקים בלפחות אחד מארבעת המקצועות הנ"ל יעבדו גם ב"עבודות רטובות" לפי המפרט הבא:

· עבודות הקשורות בשלד המבנה לרבות טפסנות, ברזלנות והרכבת אלמנטים מתועשים.

· עבודות הכנת תשתית בלבד למערכות בניין (חשמל, תקשורת, תאורה, מיזוג אוויר, תיעול וניקוז מים וביוב).

· עבודות להנחת תשתיות סביבתיות (אבני שפה, מדרכות).

· עבודות אלומיניום ומסגרות.

· עבודות בנאות.

· עבודות חיפוי וריצוף חוץ ופנים.

· עבודות איטום.

· עבודות בנאיות – בניית קירות פנים וחוץ.

· עבודות טיח וצבע.

העסקה בכל תפקיד אחר אסורה על פי חוק, לרבות תפקידי ניהול ופיקוח כמובן. שימו לב שזה לא עניין של מה בכך. במקרה של אירוע תאונתי חו"ח, אשר הסב נזקים לגוף או לרכוש, העסקה בלתי חוקית עלולה להיות לרועץ למי שיימצא אחראי לה.

Currently, the state only permits foreign workers to work on infrastructure, residential, mixed-use, and public projects. In exceptional cases, permission may be requested to employ the foreign worker on other projects.

סוגי הפרויקטים המותרים לעובדים זרים

Claims for work accidents by third parties

Unlike Israeli or Palestinian workers, foreign workers are employed exclusively by manpower corporations that have received a license from the state to do so. The corporations are the ones responsible for the workers' wages and social rights, including contributions to National Insurance.

However, when a foreign worker is injured on a construction site, a lawsuit can certainly be filed against the contractor and other parties. Usually due to negligence related to safety, in its various aspects. For example, failure to provide required safety training, failure to provide protective equipment, lack of presence of a foreman, etc.

The claims can be filed both as subrogation claims by the National Insurance Institute (which will pay the employee as a work injury victim) and by the employee himself in direct claims of tortious liability for negligence.

Contractors' insurance will provide a response to these claims under Chapter B, Third Party, and under Chapter C, Employers' Liability , which is relevant to the employee's claim against his employer. Remember that, like the other chapters of the insurance policy, the third-party insurance chapter also includes a large number of exclusions, exceptions, and nuances based on familiarity with construction sites in Israel in terms of multiple workers, multiple contractor workers, various changes to the construction site, known risks (such as working at height), and more.

Contractors and developers, take note! According to Israeli law and case law, you have a responsibility towards foreign workers on a construction site in the broadest sense, even though you are not the foreign worker's formal employer. You must ensure that all relevant safety instructions are followed in accordance with the Occupational Safety Ordinance and its regulations.

The responsibility for complying with the instructions lies with the "construction operator." If it is a main contractor, then he is defined as the "construction operator," and in the absence of a main contractor, the responsibility lies with the developer ("the person ordering the work").

Examples of claims:

· A contractor was ordered to pay compensation of approximately 280,000 shekels to a foreign Chinese worker and the National Insurance Institute following a fall from a height at a construction site. The court ruled that it was not proven that the worker had received safety training in his language, but worse still, it turned out that he had not been given a safety harness and no other worker accompanied him for assistance and supervision.

· A contracting company was ordered to pay compensation of 550,000 shekels to a Chinese foreign worker who was injured on site due to a heavy object falling on his head from a great height.

Claims for work accidents by third parties

Foreign workers make up about 25% of the non-Israeli workforce in the construction industry. While contractors and developers are ostensibly accustomed to dealing with Palestinian workers, many still lack sufficient experience in employing foreign workers.

It is important to be aware of the cultural and language gaps when working with these workers, and of course to remember that the concept of "foreign workers" is not a single entity (China, India, Moldova, Turkey, etc.). This is very relevant, for example, in terms of safety training in the worker's language and adherence to it throughout the ongoing work.

Language and cultural gaps

Accommodation for foreign workers on site

Foreign workers often spend the night near the construction site in designated housing provided for their use. Israeli law allows this, with living conditions being well defined in the Foreign Workers (Prohibition of Illegal Employment and Ensuring Fair Conditions) (Adequate Housing) Regulations, 2000.

Accommodation on a construction site, although it provides a solution for both workers and contractors, entails various risks. From risks related to property damage (such as a fire caused by cooking in the kitchen) to personal injury due to environmental hazards or even entering the site outside of operating hours. There is often a gap between the situation on the ground when the insurance company surveyor arrives and the actual situation when the caravans are placed at a later stage.

It is important that contractors and developers are aware of their responsibilities towards foreign workers, even after working hours, to the extent that they provide on-site housing. For more information, read here.