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 and managed by Ronen Litman, had been ordered by the National Insurance Institute to pay NIS 1.1 million for the vehicles. The institute had stated that if the company pursued legal action, the amount could increase to NIS 1.3 million due to reduced penalties. The company argued that some of the vehicles were operational and not assigned to specific employees, and therefore should not be subject to insurance fees.

However, the Regional Labor Court had previously dismissed Litman's appeal regarding the assigned vehicles, finding that they were indeed used by employees for private purposes, contrary to the company's claims. The court accepted Litman's appeal concerning a Toyota Corolla that was registered to the company but primarily used for its business and employees. 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.

Judge Amitsur Eitam stated that the company failed to implement clear and strict procedures to prevent private use of the vehicles. He added that evidence suggested the company's policy was not to adequately enforce the prohibition on private use, and the company's claim of isolated violations lacked substantiation. The court also dismissed Litman's reliance on a legal opinion, noting that such opinions are not a defense in civil proceedings like these.

As a result, the National Insurance Institute will adjust its payment demand to A. Litman, excluding the amount attributed to Ronen Litman's personal vehicle. The decision was agreed upon by the acting president, Judge Ilan Ita, Judge Dori Spivak, and public representatives Yaron Levinzon and Bar Bar-Tzion.