Foreign Workers Division Head Accuses Banks of Profiting from Illegal Labor
Hila Ben Yitzhak, CEO of the Foreign Workers Corporations in the construction sector, has accused Israeli banks and money transfer companies of profiting from the employment of illegal foreign workers. She claims these financial institutions facilitate money transfers for undocumented workers, earning commissions from "black money," and do nothing to stop the phenomenon.
Ben Yitzhak stated that banks and exchange bureaus have the greatest power to halt the issue, yet they avoid doing so because each transfer represents income for them. She estimates that approximately 80,000 foreign workers are currently employed in Israel without legal permits. This figure includes around 41,000 undocumented workers across all sectors, 14,000 in construction, 17,000 from the West Bank, and 22,000 tourists working without valid licenses.
The employment of these workers results in an estimated annual loss of 1 billion shekels (approximately $270 million) to the Israeli economy in uncollected income tax, national insurance, foreign worker levies, and health taxes. Ben Yitzhak further noted that the 41,000 undocumented workers, excluding those from the West Bank and tourists, transfer about 450 million shekels monthly abroad from their salaries, funds that are not reported to tax authorities.
She highlighted a significant disparity in oversight, where Israeli citizens face extensive scrutiny for unusual deposits, while illegal workers can transfer money with minimal control. This issue was recently discussed in a Knesset special committee, where a "systematic and not coincidental failure" by banks and exchange bureaus was revealed for not verifying work permits before processing transfers.
Following these revelations, foreign worker corporations have appealed to the Supervisor of Banks, urging him to instruct banks to require valid residency permits before processing any money transfers by foreign workers. Ben Yitzhak reiterated that banks have the power to stop this, but lack the incentive as they profit from every transaction.
