Notice Period in Israel: Employee and Employer Rights (2026)

The notice period is one of the most frequently mishandled areas of Israeli employment law. Foreign workers who assume Israeli notice rules mirror their home country often end up leaving too abruptly, losing accrued benefits, or facing a Regional Labor Court claim over unpaid notice. Employers who skip it entirely, assuming a generous severance offer will cover the gap, expose themselves to separate liability on top of whatever they already owed.

What follows covers the statutory rules, the rights of both sides during the notice period, how paying out instead of working notice actually works, and the specific complications that come up for foreign nationals on work permits.

1. The statutory framework: Notice Period Law 5761-2001

Before 2001, notice periods in Israel were embedded in various scattered statutes, collective agreements, and court-developed customs. The Notice Period (Dismissal and Resignation) Law 5761-2001 consolidated the rules into a single statute that applies to all employees in Israel with one year or more of service, plus a graduated scale for those in their first year.

The law covers both directions: an employer dismissing an employee and an employee resigning. The same minimum notice periods apply regardless of who initiates the end of employment. An employee who resigns without giving the required notice can be held liable for the cost of the shortfall, and courts have awarded employers damages equivalent to the missing notice pay when employees walked out without warning.

The Notice Period Law sets minimum standards. Collective agreements, sectoral extension orders (*tzavei harchava*) issued by the Ministry of Economy and Labor, and individual employment contracts can all provide for longer notice periods than the statutory minimum. They cannot provide for shorter ones.

2. How Long Is Your Notice Period?

The length of your notice period depends on how you are paid and how long you have worked for this employer.

Monthly-paid employees (salaried, paid once a month) follow this scale under Section 2 of the Notice Period Law:

• Months 1–6: 1 day of notice per month worked (so 3 months worked = 3 days notice)
• Months 7–12: The notice period graduates — 6 days for the first 6 months, plus 2.5 days for each additional month from month 7, capped at 1 full calendar month
• After 12 months: 1 full calendar month

In practice, once an employee passes the one-year mark, they are both entitled to and obligated to give 30 days notice.

Daily- or hourly-paid employees (paid by the day or hour) follow a slower-building scale under Section 3:

• Months 1–6: 1 day per month worked
• Months 7–12: 6 days + 2.5 days for each additional month from month 7
• Year 2: 14 days
• Year 3: 14 days plus 1 day per month into year 3 (capped at 21 days)
• After 3 full years: 1 full calendar month

3. Rights During the Notice Period

The notice period is still employment. Every right the employee held before notice was given continues without interruption. This point catches many employers off guard, particularly those in sectors where relationships sour quickly once a resignation is announced.

Specifically, during the notice period:

• Salary continues at the same rate. The employer cannot reduce it, change pay dates, or withhold it as leverage.
• Pension contributions continue. Employer contributions to the employee's keren pensia (pension fund) must be maintained. Stopping contributions during notice is a separate violation of the Pension Insurance Expansion Order that regulators at the Ministry of Finance enforce.
• Sick leave continues to accrue at 1.5 days per month under the Sick Pay Law 5736-1976. An employee who falls ill during the notice period has the right to take that sick leave — the notice period does not run while the employee is on certified sick leave, meaning the end date of employment moves forward day-for-day.
• Annual leave that was previously approved cannot be unilaterally cancelled by the employer during the notice period. Conversely, the employer can sometimes direct that unused annual leave be taken during the notice period, but only if the employment contract or collective agreement permits it.
• The employer cannot change the employee's role, duties, or working conditions during the notice period. A demotion, a change of location, or a material reduction in responsibilities during notice can itself constitute a constructive dismissal event.

4. Pay In Lieu of Notice

Either the employer or the employee can substitute a cash payment for the working notice period. This right sits in Section 7 of the Notice Period Law and gets used regularly in tech, financial services, and executive roles when both sides want a clean exit.

The payment equals the gross salary the employee would have received during the notice period. For a monthly-paid employee entitled to one month's notice, that is one full month's gross salary at the rate applicable on the last day of employment, covering base salary plus the allowances that count toward severance pay. Bonuses, commissions, and irregular payments are typically excluded unless the employment contract says otherwise.

Tax-wise, pay in lieu of notice is treated as ordinary employment income. It is subject to full income tax withholding at the employee's marginal rate and National Insurance Institute (Bituach Leumi) contributions, not as a severance or compensation payment. The employer must include it in the final payslip and report it on the Form 106 for that tax year.

Either party can trigger the pay-in-lieu option. An employer who wants the employee off the premises can pay them out and end the relationship the same day. An employee with a new job that cannot wait can resign and offer to cover the cost of the missing notice days, though in practice that almost never happens; the more common outcome is the parties negotiating a shortened notice period by mutual agreement.

5. Garden Leave in Israel

Garden leave (chufsha levana or "white holiday" in local parlance) is the practice of placing an employee on paid leave for the duration of their notice period. The employee stays on the payroll, receiving full salary and continuing to accrue pension rights and sick leave, but is released from the obligation to come to work.

Garden leave is not explicitly mentioned in the Notice Period Law, but it has become standard in Israeli tech and professional services. Courts treat it as a lawful variation of the notice period: the employer has effectively exercised the Section 7 option to release the employee from work duties while still paying their salary. The employment relationship continues until the last day of the notice period, and all statutory obligations on both sides remain live.

What garden leave is regularly used for in Israel:

• Keeping an employee off the premises during a sensitive handover period without triggering a dispute over pay-in-lieu taxation
• Allowing a senior executive to resign without a disruptive "lame duck" period on the office floor
• Running the notice period concurrently with any non-compete restriction the employer wants to invoke — because the employee is still "employed," they are technically not competing yet, even if they are not working

6. How to Give Notice Correctly

The Notice Period Law requires written notice. An oral resignation or oral dismissal does not trigger the notice period under the statute, though courts have sometimes recognised verbal notice when confirmed by contemporaneous written evidence such as email chains or WhatsApp messages that both parties treated as notice.

To protect yourself — whether you are the employee resigning or the employer dismissing — give notice in a standalone written document that states:

• The date the notice is given
• That this is notice of dismissal or resignation (as applicable)
• The last day of employment (calculated from the notice date using the applicable statutory or contractual notice period)
• Whether the employee will be working through the notice period, taking garden leave, or receiving pay in lieu

Notice can be delivered by hand with a signed acknowledgment, by registered mail to the employee's last known address, or by email — provided the email can be shown to have been received. In practice, WhatsApp confirmation of receipt is widely used in Israeli employment and courts accept it as evidence of delivery.

Resignation without full notice: An employee who resigns but cannot or will not work the full notice period can be held liable for the employer's cost of the shortfall. In practice, most employers in Israel do not pursue this — the legal cost of suing for one or two weeks' notice pay outweighs the recovery. But in senior executive roles with longer contractual notice periods (two or three months), employers do sue for the shortfall, and the Regional Labor Court will award damages equivalent to the gross cost to the employer of the missing notice period.

7. Foreign Workers and Expats: Specific Considerations

The Notice Period Law 5761-2001 applies to every employee performing work in Israel, regardless of nationality, immigration status, or the governing law specified in the employment contract. Foreign workers on B/1 work permits, seconded executives, and olim all hold the same statutory notice rights as Israeli citizens. A contract clause purporting to waive those rights or substitute a shorter notice period is void under Section 14 of the Notice Period Law, which prohibits contracting out of the statutory minimums.

That said, several practical complications arise specifically for foreign nationals:

B/1 permit holders face a 30-day status window after dismissal. A B/1 employer-specific work permit loses its legal basis when the employment relationship ends. Under the Population and Immigration Authority's (PIBA) administrative procedures, a dismissed B/1 holder must either obtain a permit transfer to a new employer or leave Israel within 30 days of dismissal. The notice period does not pause or extend this administrative window. If you receive a dismissal notice with a 30-day notice period, you have 30 days of lawful employment remaining — but your immigration status clock is also ticking simultaneously. Starting the permit transfer application the same week you receive the notice is not merely advisable; it is time-critical.

Olim and returning residents who joined their employer under global relocation packages sometimes find that their employment contract specifies the notice period of their home country (e.g., two weeks under US at-will principles). That clause is overridden by Israeli mandatory law. They are entitled to the full Israeli statutory notice period regardless of what the contract says.

Executives on secondment whose global employer has posted them to Israel for a fixed term should verify whether Israeli law or the home-country law governs the notice period. Israeli courts apply Israeli mandatory notice rules to any employment relationship substantially performed in Israel, regardless of the contract's choice-of-law clause. A seconded employee who is functionally managing an Israeli operation is very likely subject to the Notice Period Law even if their contract nominates New York or London law.