Does an employee in Israel keep accruing seniority, pension and vacation during unpaid leave?

No Israeli statute defines unpaid leave. It is a creature of agreement between employer and employee, and the employment relationship survives it, which is why the arrangement is usually preferable to resignation. That distinction drives the money. Severance is calculated on total seniority with the same employer, and Regulation 10 of the Severance Pay Regulations 5724-1964 sets out which absences count toward that total and which do not. Section 3 of the Annual Leave Law 5711-1951 links the number of leave days to days worked in the year, and the extension order on comprehensive pension insurance ties contributions to wages actually paid.

Two exposures catch foreign employees in particular. National Insurance comes first: the employer must keep paying the minimum contribution for the first two calendar months of the leave, after which the employee becomes personally liable and must pay in order to keep health coverage running. Pension and disability cover comes second, because the policy attached to the fund lapses once deposits stop, usually after about five months, so the fund should be asked to convert the policy to risk-only cover before the leave begins. Agree the length, the return date and the treatment of seniority in writing beforehand, as set out in the guide to unpaid leave in Israel.

From the full guide: Unpaid Leave in Israel (Chufsha Lelo Tashlum): Employee Rights and Employer Duties

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