Staffing Agency Workers in Israel: Rights, the 9-Month Rule and Joint Employer Liability

In a manpower arrangement you sign with an agency (chevrat koach adam), the agency sends you to a client (the ma'asik bepoal, or "actual employer"), and you work under the client's direction. This guide explains who owes you what and when the client becomes your employer. It applies equally to Israelis, olim and foreign nationals.

1. What Is a Manpower Contractor Under Israeli Law?

Section 1 of the law defines a manpower contractor as someone whose business is supplying their own employees to work for others. A private employment bureau that also supplies workers is included. Two features matter:

• License. Under Section 2, nobody may operate as a manpower contractor without a license from the Minister of Labor. The first license is for one year, with renewals usually for two years. Operating without a license carries up to six months' imprisonment (Section 20). Under Section 10B, a business may not use an unlicensed agency and must receive a copy of the license.
• Who directs the work. A manpower contractor supplies people who work under the client's direction. A service contractor provides a service with its own team and supervision. The law's second schedule lists security and guarding, and cleaning. Service contractors also need a license, but the nine-month and equal-conditions rules below apply to manpower supply.

Labor Courts look at the reality rather than the contract label. A "cleaning services" contract under which the hotel's own managers assign and supervise each worker may be treated as manpower supply, or the hotel may be found to be the real employer.

2. Who Is Your Legal Employer?

The agency is your employer. It must give you a written employment contract before you start (Section 11), pay your wages, and make pension and National Insurance contributions. Two further protections apply from day one:

• No placement fees. Under Section 12, neither the agency nor the client may charge you anything for the placement or recover from you what the client pays the agency. The only exception is regulated professional training before you start.
• No-hire clauses are void. Under Section 15, a clause in the agency–client contract that bars the client from hiring you directly, or bars you from becoming its employee, has no effect.

Separately from the statute, the Labor Courts can find that the client was your real employer, or that agency and client were joint employers. Courts look at who recruited you, who decided on your pay and dismissal, who supervised you, how integrated you were in the client's business, and how long the arrangement lasted. Where they make that finding, the client owes the full range of employment rights directly.

3. Equal Working Conditions

Section 13(a) provides that the working conditions at the workplace, including any collective agreement that applies there, also apply to the agency workers at that workplace, adjusted for type of work and seniority with the client. The rule is not tied to the nine-month mark. It applies from the start of the placement.

In practice this covers pay scales, allowances, recreation pay (dmei havraa), vacation and similar conditions that a comparable direct employee receives. If more than one collective agreement could apply, the one more favorable to the worker prevails (Section 13(b)).

There are two important exceptions:

• IT roles. Section 13A says Sections 12A and 13 do not apply to agency workers employed in computing roles, meaning maintenance, development and implementation of computer systems. Many tech contractors working through agencies therefore have neither the equal-conditions right nor the nine-month rule. They still have every other employment right.
• Extended general collective agreement. Under Section 13(c), the equal-conditions rule does not apply where the worker's terms with the agency are set by a general collective agreement that was extended by an extension order. Check what the agency's contract and payslip say about the agreement that governs you.

All statutory minimums apply to every agency worker regardless of these exceptions: minimum wage, overtime, annual leave, sick pay, recreation pay, holidays, pension and severance. See minimum wage in Israel and annual leave in Israel.

4. The 9-Month Rule: Automatic Direct Employment

Section 12A is short and strict:

• Nine-month cap. An agency worker may not be employed at the same client for more than nine consecutive months (Section 12A(a)).
• Breaks do not reset the clock. Continuity is preserved even if there was a break of up to nine months.
• Exceptional extension. The Minister of Labor may, in exceptional cases, allow a longer placement, but never more than 15 months in total at the same client (Section 12A(b)).
• Automatic consequence. If the worker stays beyond nine months (or beyond the approved extension), the worker is deemed the client's employee at the end of that period (Section 12A(c)). No offer or new contract is needed for this to happen.
• Seniority carries over. The time worked at that client through the agency is added to the worker's seniority as the client's employee (Section 12A(d)). This matters for severance, vacation and notice.

The section speaks of employment "at the same client," not with the same agency. Moving a worker from one agency to another while they keep doing the same job at the same client therefore does not normally restart the count. The rule does not apply to IT roles (Section 13A), or to foreign workers in construction employed by corporations holding a special permit to supply non-resident workers (Section 12A(e) and the First Schedule).

5. Pension, NII, and Social Benefits for Agency Workers

The agency, as employer, must make pension contributions under the general pension extension order: currently at least 6.5% of wages from the employer for benefits, 6% for severance, and 6% from the employee. A new employee without an existing pension arrangement can be enrolled after a qualifying period, with retroactive contributions. A worker who already has an active pension fund is generally entitled to contributions earlier. See mandatory pension in Israel.

A study fund (keren hishtalmut) is not a general statutory right. It applies only if your contract, a collective agreement or a sector extension order provides for one. Where the client's collective agreement includes a study fund, Section 13 may extend it to you. See keren hishtalmut.

The agency must also report you to the National Insurance Institute and pay contributions. That gives you work-injury, maternity and unemployment coverage like any other employee. If you are injured at the client's site, the injury is a work injury claimed from National Insurance.

Check your annual pension statement. Missing contributions are one of the most common problems with smaller agencies, and the sooner you raise them, the easier they are to recover.

6. When the Client Company Is Liable

Contrary to a common belief, the Manpower Contractors Law does not make the client jointly and severally liable for all of the agency's wage debts. The client becomes liable to you in four main ways:

1. After nine months, under Section 12A(c), you are the client's employee and it owes you everything an employer owes.
2. Real or joint employer. A Labor Court may find that the client was your actual employer, or a joint employer with the agency, from the start.
3. Service contractors' workers. If you work for a security, cleaning or catering contractor (catering only where it serves the client's own staff), Section 25 of the Increased Enforcement of Labor Laws Law 5772-2011 makes the client (mazmin sherut) liable for listed wage obligations. The conditions are: at least four contractor workers at the site, at least six months of continuous service, and a written demand to the contractor with notice to the client (or a notice from a labor inspector), with the breach still not remedied 30 days later.
4. Unlicensed agency. A client that used an unlicensed agency commits an offense (Sections 10B and 20(d)), which strengthens arguments that it should bear responsibility.

If the agency stops paying, write to the agency demanding payment and send a copy to the client's HR department. That starts the clock under the Enforcement Law where it applies, and creates a record for any court claim.

7. Foreign Workers Through Staffing Agencies: Special Considerations

• Special permit. Under Section 10, supplying workers who are not Israeli residents requires a special permit from the Minister of Interior. Only a corporation whose sole business is supplying such workers can hold one. In construction, most foreign workers are employed by these licensed corporations, and the nine-month rule does not apply to them.
• Work permit. A B/1 permit is linked to a specific employer or corporation and sector. Changing employer requires following the Population and Immigration Authority's transfer procedure; see transferring a B/1 work permit.
• Same rights. All Israeli labor laws apply. The worker is entitled to a written contract in a language they understand, the agency may not hold the worker's passport, and deductions for housing and other items are capped by regulation. Recruitment fees beyond what the law allows are prohibited. See foreign worker rights in Israel and the foreign worker deposit (pikadon).
• Caregivers. The law's definition of "actual employer" excludes an individual who receives nursing care services through the worker. Home caregivers placed by agencies are therefore usually employed directly by the patient or family, with the agency as an intermediary. See foreign caregivers in Israel.

8. Enforcement and Remedies

• Ministry of Labor enforcement. Labor inspectors can investigate unlicensed agencies, unpaid wages and missing pension contributions, and can impose administrative fines under the Enforcement Law.
• Regional Labor Court. Under Section 23 of the Manpower Contractors Law, the Labor Courts have exclusive jurisdiction over claims based on it, such as a claim that you became the client's employee after nine months, or for equal conditions. Wage claims can be filed against the agency and the client together where the client may be liable.
• Limitation. Most monetary claims are subject to the general seven-year limitation period under the Prescription Law 5718-1958. Some statutes set shorter periods, such as three years for annual leave claims. Act early, because each year of delay can cut off the oldest months of a claim.
• Release letters. Rights under the Manpower Contractors Law cannot be waived (Section 18). Still, read any release letter carefully before signing it; see release letters.

A foreign worker who has left Israel can still sue through an Israeli lawyer acting under a power of attorney.