Learning About the Different Business Structures in Israel

 

I spent an enjoyable morning today at the Jerusalem Nefesh b'Nefesh office in a very informative workshop. The workshop was on "Choosing the Right Legal Structure for your Business". The workshop was a little over two hours long and presentations were offered by both a lawyer and an accounting firm.

The legal side was presented by Russell Mayer who has his own legal firm in Israel,  Livnat Mayer & Co. Attorneys at Law and also a FaceBook group entitled "Ask an Israeli Lawyer".  In the limited time available, Russell outlined the different types of for profit and not-for-profit options for working independently, including some important tips relevant for Olim. 

The accounting side was presented by Jeff Nurkin & David Beychok of NurkinCPA. This presentation included a lot of information for Olim who are US citizens. If you have made Aliyah from the US, it is a good idea to consult with an accountant who is an expert in US taxes. There are many details to take into consideration even if one has married an Israeli. 

A definite bonus for me was to discover that Nurkin CPA assists with applying for the ITIN number. If you are not a US citizen and publish a book via an American company such as CreateSpace, you will need to apply for an ITIN number. Now you can know where to go to for assistance in this process.

After a full question and answer session, for some details we were recommended to consult with an Israeli Accountant. A wonderful piece of advice was that most accountant will give about half an hour of a free session in which you can ask questions related to your work. It is of benefit to the accountants as if they provide the answers you require, you are more likely to hire their services.

If you know of any good Israeli accountants, prepared to give advice to Olim wanting to work privately or to be self-employed, do be in touch, we love to develop a list of who to turn to for such information. Please note, comments are moderated. We do not permit SPAM. Any accountant (or other professional) that we add in a list we will be in touch with to get to know prior to listing them on this blog.

Thank you for your co-operation and understanding.

Have a blessed day and wishing you much success in Israel.

Shoshanah Shear

Chessed Ve'emet

Employment Warnings in Israel

Israel is an amazing place and the land that Jews belong in. There is so much here that is wonderful, but there are areas that require major improvement. 

One of the largest areas of difficulty is that of honest work. As an experienced occupational therapist, I naively thought that a good degree would guarantee that I would have work in Israel and therefore some difficulties one might anticipate in moving countries would be eliminated. It seemed logical, by attending continuing education courses, getting to know staff in the university and place of work or becoming a member of the Israel Occupational Therapy Association, I was sure I would meet those I needed to and have at least one area of my life that should be easy to transition into.

Rule number 1 when moving to Israel: Do NOT ever presume anything. Nothing in Israel works in a logical manner. Expect the unexpected and plan for the problems, as sadly, they will arise.

I am currently relieving a therapist on Maternity Leave and here have come across a few rules when working in any Israeli facility. It really does not matter if it is a government facility or religious school or other facility. The rule of thumb is the place of work will do everything they can to avoid paying you, to delay paying on time and to make life a nightmare as far as technicalities, pay etc. Many therapists have experienced having to wait the full 3 months of covering a therapist on maternity leave and had a fight at the end to get their pay.

The difficulties you will come up against are many and each time something new. So here are a few pointers to help you through this.

1) When starting to work in any facility, get all the details in writing.

2) If you go into a facility for hand-over and are paid for the time, write it down in your diary and have the secretary or head OT sign the times you go in and when you leave.

3) Have all your documents organised and have them sign to say all paperwork is complete.

4) Make sure to get a work contract. Do not accept any work opportunity without a work contract and make sure you agree with what you are signing on.

5) More and more schools are instituting a clock in system that is finger activated and you have a code or number as a worker. This is supposed to be a reliable system. However, somehow on the other end details can and do get doctored and you need written proof to back you up. There are also times the electricity will be down and you can not clock in as the clock is not functioning. Do NOT rely on it EVER! Keep a written record of the dates and times you clock in and when you leave and have someone sign this. Either the secretary or the head OT. Keep everything in writing.

6) Make sure your treatment notes are correctly dated and up to date. These can prove you actually worked on a given day. After all, if you were present and completed treatment notes, it can not be you were not at work.

7) Know that by the law of the land, salary must be paid by the 9th of the following month and no later. Many try to make it the 10th, most stretch that to the 15th and then suddenly later and later. By law every day you are not paid the facility can be fined for late pay. Some schools are starting to split the month with e.g. 1-24 April paid on May 10 and 25 - 30 April added to May 1-24 and paid on 10th June. This system is illegal. The full month of April should be paid at end of April. Israeli law gives a window period until 9th May to pay, but this is a window period it does not mean they can regularly pay on or after 10th May.

8) Make sure you have savings to keep you going while you battle to get paid.

9) Most Israelis will not tell you how they manage while awaiting payment. I have managed to ascertain that they will receive help from relatives, Gemachim or savings. This is not the norm and no therapist should ever have to turn to ways to cover their expenses while waiting to be paid. The normal way of the world is that you go to work, put in an honest day's work, complete time sheets and get paid on time. If you wanted to live on loans, gifts, savings etc, you would not be seeking salaried employment. This is not normal and something needs to change. How? The only way I can think of is to get the word out and hope that enough people will begin to think as educated people and stand up for their workers rights.

10) If your salary is not paid on time, have a lawyer write a letter or take action to ensure the facility is fined for each day of late pay. The more O.T.s stand up for their rights to be treated and paid as the professionals they are, the sooner the system can begin to change.

If you do not have savings or friends or family to help you or the people to sign as guarantors for Gemach loans which would be interest free, taking a loan at the bank is not so simple. The bank manager wants to know details before you take a loan and refuses to give a loan while you wait to be paid.

So if you have no back up plan and you are an occupational therapist, if you still wish to work in OT in Israel, join our Private Practitioners group and learn how to develop a private practice. Working privately is sometimes the only way to go.

There is another area that requires tips in working in facilities in Israel and that is keeping your therapy records confidential. We'll cover this in another post.

What to do if your salary is delayed?

In a previous post on finding work as an Occupational Therapist in Israel, we touched on a problem of not being paid on time. This is sadly a problem that arises in many facilities. For some OT's it might happen that when covering a therapist on maternity leave, the full 3 months they go without pay, or it could be that pay is suddenly withheld for 2-6 months some time down the line. Is this permitted? 

Please visit the lawyers info from the previous post. If you look at the previous post, we had invited OT's to make contact so as to develop a group to work on altering this problem. We had some response which was not what we thought we'd hear. The response was that sadly, many other professions also struggle with salary suddenly being withheld. 

In this post we have some invaluable information shared by another Olah. 

If your salary is withheld, you can go to an Employment Court to sue for what is called "Halanat Sachar" which is taken quite seriously.

There are 5 employment courts - Tel Aviv, Haifa, Beer Sheva, Nazareth and Jerusalem - here is their website - http://elyon1.court.gov.il/heb/avoda/AvodaHomePage.htm.

Even if you worked for half a day for someone and they decided not to take you on, you need to be paid for the hours worked.. There is no such thing in this country as taking someone on trial, meaning if someone works for a few hours for anyone, they need to be paid for the hours worked. No place of work can refuse to pay saying it was just a trial and now they decided to try someone else. 

It is important to make sure you have documentation to prove when you worked. In general you have one year to claim for "Halanat Sachar". It is actually a criminal offence not to pay salaries on time (sadly freelancers do not have the same protection) and you should find that mentioning to the person who owes you salary that they can go to prison for up to 6 months or have to pay a hefty fine might help them decide to pay you faster.

I have noticed many facilities that employ occupational therapists will offer either salaried pay at a slightly lower rate or you can work for a higher hourly rate but then not receive benefits. Many of these require that the OT provide Kabalot (receipts) from the Tax office to say they work as an Atzmai. Find out your rights, it could be that if you receive that slightly higher hourly rate, you also lose the right to make sure you are paid on time as by agreeing to give a receipt for your pay, you become a freelance worker. 

If you belong to a union - like the "Histadrut" - they will take on these battles for you. 

Before accepting any job an dbefore deciding what method of pay you prefer, whatever the profession might be, take the time to find out whether the agreement being proposed is legal and whether it is in your best interests. Afterall, most people work to earn a salary. If you are independently wealthy and looking to volunteer that is a different scenario. But when you are looking for work in order to receive a salary, you do have rights the first being to be paid correctly and on time.

Support Group for Religious Divorced Women

Forming an empowerment/support group for English speaking religious women who are divorced, or are in the process of getting divorced.

The group will be co-facilitated by Lizzie Rubin & Esther Marcus both of whom are experienced certified family therapists.

The goals of the group are to build a stronger sense of self, to develop a more positive outlook on life, and to process the past with the goal of moving forward.

The group will be limited to 10 women and will meet weekly for three months on Wednesday evenings at 8PM at Bishvilaych- Women's Medical Center starting in November in Givat Shaul.

Fee is 200 shekels per month.

For more information, call Lizzie 054-523-1201 or Esther 052-224-7317

Lizzie Rubin is part of our the Professional Referral Service of Chessed Ve'Emet and is recommended by us as a family therapist. 

If you are a health professional or counsellor working privately in Israel, please do contact  

Chessed Ve'Emet to join our Professional Referal Service

Finding the Right Accountant

If you consider working for yourself in Israel, you will have to find a good accountant. How do you do that? What will you look for? 

Here is some info we are finding, and questions we are gathering. 

First question is what structure do you need for your business?

If you work privatley and earn under 75 000 Shekels a year, you will need to register as an Osek Patur, which requires an anual report compiled by an accountant. What does that mean? What does it cost?

It seems the fee is pretty standard. If you can prepare your books during the year and just have the report written, then the fee will be quoted as around 700  - 800 Shekels. Actually, it is 700 Shekels plus VAT but the accountants won't quote the final figure only the amount before VAT.

If you require a letter written for Bituach Leumi or the Iria or other assistance for either or both, the accountants will charge about 250 Shekels to prepare the letter or an amount per hour of working related to Bituach Leumi and the Iria. If you need a letter written to both Bituach Leumi and the Iria, then the cost will be an extra approximately 100 Shekels. Add on VAT to all figures quoted, the accountant won't do that unless you ask.

There are accountants who will quote for the report plus help with Bituach Leumi as anything from 1000 Shekels to 1800 Shekels. If you do the math, you will discover in the end, it works out the same. One accountant mentioned that any accountant who won't assist with Bituach Leumi, probably did not charge enough to cover the time required to offer this service. i.e. enough more than the amount of 700 - 800 for compiling the anual report.

Watch out for those accountants who charge 2000 Shekels or more and still don't help with Bituach Leumi. Yes they do exist and it is easy to run up bills leading to debts before you realise what happened. 

Now let us do a little math here. If you earn under 75 000 per year, that means 6000 Shekels or less per month. If an average rental around Jerusalem is close to 3000 Shekels and it is more if you are in Jerusalem, then you will quickly begin to realise you won't have much left for other expenses. Keep in mind, if your bank balance shows 2000 Shekels you have to pay full Arnona. That could be 300 - 400 or more per month.

Bituach Leumi will want 10 percent or more on what you earn per month. That means if you earn 6 000 Shekels a month, Bituach Leumi will want 605 Shekels per month if you are an Osek Patur.

That means let's say 350 for Arnona plus 605 for Bituach Leumi plus 3000 on rent plus 50 Shekels for Vaad Bayit, so far we are at 4005 Shekels already gone from your 6 000 Shekels earning. You have not yet paid your Mas Hachnasa (Tax). You have not yet paid the accountant. You still need to add on food, transport, phone, cell phone and other basic expenses. 

How do you get that 605 charge for Bituach Leumi reduced? We really don't know. We are told an accountant can help, but the accountants say it is a Bituach (Insurance) and you just have to pay. Bituach on what? Well we don't have the answer for that either. 

We have had one other area of questioning for accountants. More and more, modern work happens online and payment is via PayPal. Have you ever heard of that? Well ask most accountants and they have NO CLUE what PayPal is. They do seem to undestand there is a service fee taken off at the source, but now how does one convince MasHachnasa and Bituach Leumi and even the Iria that the amount written on a receipt is not the amount received as PayPal took a percentage for their fee at the outset, before you even see the money. That question we have not yet found a satisfactory answer to. Yes, deduct expenses but the accountants get nervous to deduct all the correct expenses lest the outcome is that you can't actually live on only 6000 Shekels a month.

What happens after that, ie if you earn more than 6 000 Shekels a month? Well you have to register for Osek Me'ushar (I think that it the correct term). That means you have to begin to charge VAT. Which means you enter the game of "if you mention the full fee, ie your fee plus the VAT, many will say it is too expensive and not pay or book your service". If you just mention your fee and ignore the VAT cost, well, the client will think your fee is acceptable and then get angry when they hear the VAT added on. The answer? We don't know, do you?

The only thing we do know is we are supposed to be honest. So how do you bring in an honest parnassa in Israel and earn enough to live? And, how do you select the correct account?

This is how far our research is going. If you have more info or insight, please let us know, we'd love to hear and judging from letters from some readers, they would love to know too.

How Giving are these Amutot?

Do you receive requests in the mail from Charitable organizations asking for assistance. Do you get phone calls from various charities asking for assistance?

We decided to do a little test and the result is quite alarmning. We tried calling a few to ask how someone receives assistance. We tried one organization that helps Orphans and Widows. Amazingly they can not answer as to what the process is for one to receive help. We tried asking two that called us stating they help Avreichim (those who learn in Kollel) with a monthly assistance so that they can learn Torah in Kollel. "Sounds good, we said, how does an Avreich receive help?" Amazingly they could not answer.

We have tried this test with quite a few organizations and decided this is our new method to check out if an organization is real before we decide to donate.

Try it yourself. Next time you receive a flier or envelope from a charitable organiztion in Israel requesting your Maaser money, find out how much they really help others. It is easy to write a tear jerker story, but if an Orphan or Oleh or Avreich or other needy Jew turns to them for help, do they really assist? Do they know  the process?

We manage a few Mitzvah Projects and hence from personal experience know very well what the process is. If someone asks who we help, we have certain criteria, a screening interview and process to assist. If a Charitable organization can not answer for you what the process is to receive, then the question is do they really help or are they just taking advantage of their Amuta for their own gain.

Try it yourself. Next time you receive an appeal for help, before you send in a check or give your credit card details, call and ask how to receive help. If you are given the run around or put on hold or disconnected / hung up on, will your donation really go where you want it to?

Next time you are called by one of these charities, ask them the method to receive help. Ask them if they have a website and take a look. Is the method to receive help clear? Is there even an option given or are there only options to give to them but that they dont need to give to others?

There are organizations that are real. Make sure your donation goes where you intend it to. Do this simple test and then donate generously to those who really do help. For the others, if they can not explain to you how one in need applies for help, then I question if they actually help at all.