Israel Panel Proposes 83% Cut in Foreign Worker Fees for Small Businesses
A directors-general committee recommended slashing annual fees for foreign workers by up to 83% for small businesses, aiming to ease labor costs and bureaucratic burdens amid severe shortages.
Committee Recommends Dramatic Fee Cuts for Foreign Workers
The directors-general committee has recommended sharply reducing the fees paid by employers for foreign workers, focusing particularly on easing the financial burden for small and medium-sized businesses. Under the proposed framework, the annual fee for a foreign worker in businesses employing up to 100 workers will drop to 1,420 NIS for up to ten foreign workers, compared to 8,490 NIS currently charged in most sectors—representing a reduction of approximately 83%.
In addition, the committee, headed by the Prime Minister's Office, recommends setting a uniform fee of 370 NIS for submitting an application to employ a foreign worker across all sectors. Currently, application fees vary by industry: 1,420 NIS in the hotel industry, 1,060 NIS in construction and industry, and 710 NIS in agriculture. State revenues from foreign worker employment fees totaled over 1 billion NIS in 2024.
"The proposed changes aim to significantly lower employment costs and reduce the bureaucratic burden on local businesses struggling with severe labor shortages since the outbreak of the war."
Overhauling Calculation Methods and Addressing Treasury Opposition
The committee also recommends altering how the annual fee is calculated so that employers are billed based on the worker's actual arrival date and employment duration. Previously, employers often had to pay the full annual fee even if a worker arrived late in the year or finished working early.
Reducing foreign worker fees has historically been a contentious issue among government ministries. The Ministry of Finance has previously opposed sweeping cuts, arguing that the fees serve as an incentive to hire Israeli workers. The current reform specifically targets smaller enterprises to alleviate operational costs.
