Company Must Pay Hundreds of Thousands in National Insurance Fees for Employee Vehicles

The National Labor Court has rejected an appeal by infrastructure and electricity company A. Litman, which was ordered to pay hundreds of thousands of shekels in National Insurance fees for vehicles provided to its employees. The court ruled that these vehicles constitute a benefit that is part of an employee's salary, thus requiring insurance contributions.

A. Litman, which employs approximately 30 people and is controlled by Ronen Litman, had been assessed by the National Insurance Institute for NIS 1.1 million in fees for the vehicles. The Institute had indicated that this amount could rise to NIS 1.3 million if the company pursued further legal action. The company argued that the vehicles were operational and not assigned to specific employees, but the court found that employees had in fact used them for private purposes.

Judge Amitsur Eitam of the National Labor Court upheld the lower court's decision, emphasizing that the key factor is the *possibility* of private use, not just the actual use. He stated that A. Litman failed to implement clear and strict procedures to prevent private use of the vehicles, and evidence suggested the company did not adequately enforce its own prohibition on such use.

The court also dismissed A. Litman's claim that it relied on a legal opinion, noting that such reliance is not a defense in civil or tax proceedings. The National Insurance Institute will now recalculate the payment owed, excluding the amount attributed to Ronen Litman's personal vehicle.