Resigning for Health or Relocation? Key Letter Clause Could Mean $35,000

Israeli law allows employees to receive full severance pay even when they resign under specific circumstances, but the National Insurance Institute has a different set of criteria for unemployment benefits. This discrepancy can lead to significant financial loss for workers who are unaware of the precise wording needed in their resignation letter.

For instance, a 34-year-old earning 12,000 shekels gross, who worked for four years and resigned due to his partner's illness, is entitled to 48,000 shekels in severance. While his employer contributed approximately 34,600 shekels to a severance fund, the remaining 13,400 shekels must be paid directly by the employer. If recognized as a dismissal, he would also be eligible for unemployment benefits, estimated at 284 shekels per day, totaling around 21,300 shekels for the first three months, bringing his potential total to about 34,700 shekels.

The law recognizes over ten justifiable reasons for resignation that qualify for full severance, including significant worsening of employment conditions like a pay cut or demotion, health issues of the employee or a close family member, resignation to care for a child within nine months of birth, or moving at least 40 kilometers away due to marriage or a spouse's job.

However, the National Insurance Institute's list for waiving the 90-day unemployment waiting period is shorter. It includes worsening conditions, employee or family health problems, sexual harassment, and moves resulting in a commute over 60 kilometers (or 40 kilometers for a mother with a child under seven). Simply giving birth is not enough; additional circumstances like long shifts or an employer's failure to reinstate the employee are required.

To claim full benefits, employees must explicitly state the reason for resignation in their letter, framing it as a dismissal under the Severance Pay Law. For example, citing a pay cut and then resigning requires prior notification to the employer to allow for correction. The employer must pay the severance supplement within 15 days of the last workday. Employees who do not receive their due payments can file a complaint with the Ministry of Labor's enforcement unit or sue in regional labor court within seven years of leaving their job.