Israeli Labor Courts Award Large Compensation for Unpaid Overtime Despite Employee Theft Admission
The National Unit for Combating Economic Crime (YALAK) at Lahav 433 arrested Tel Aviv municipality employees on May 20, 2024, suspected of economic offenses involving hundreds of millions of shekels. Meanwhile, a study by Oketz Systems analyzing 86 labor court rulings reveals that in 85% of cases, employers were ordered to pay overtime due to improper or absent work hour records, even without solid employee evidence. Employers face personal responsibility under Section 25 of the Hours of Work and Rest Law to maintain accurate attendance logs, preferably digital or mechanical, but manual records are allowed with daily employee and employer representative signatures.
The Jerusalem Regional Labor Court awarded approximately 278,000 shekels to a Palestinian Authority resident who worked 38 months in a clothing store in East Jerusalem for a monthly cash wage of 2,000 shekels without pay slips, contracts, or employment condition notices. Despite the employee admitting to stealing 500 shekels from the cash register, the court ruled that suspicion of theft does not exempt employers from their labor law obligations. Judge Sarah Breiner Yisrazeda rejected the employer’s attendance reports as unreliable and accepted the employee’s claim of working 12 hours daily, six days a week. The compensation included minimum wage differentials, overtime pay (about 224,000 shekels), vacation pay, pension, and damages for missing pay slips and notices, plus legal costs.
In another case, a moving company was ordered to pay a former driver around 409,000 shekels for unpaid overtime. The driver claimed 12-hour workdays, but the employer’s attendance records were fabricated, with a fixed net salary of 12,000 shekels regardless of actual hours. Without proper attendance logs, the burden of proof shifted to the employer, who failed to disprove the claim, resulting in payment for the maximum legal overtime hours.
Labor law expert attorney Ilan Kamintzky emphasized that overtime pay rates are statutory and avoiding payment over time exposes employers to significant financial risk. Most employees file claims only after employment ends, often covering the full seven-year statute of limitations. Amendment 24 to the Wage Protection Law places the burden on employers to prove employees did not work claimed overtime if attendance records are missing. Failure to do so results in a legal presumption of 60 overtime hours monthly. Kamintzky also noted that GPS tracking alone cannot replace legally required attendance records. He highlighted the availability of numerous technological solutions for attendance tracking, making excuses for non-compliance unlikely. Proper attendance management is a relatively simple task that prevents costly legal exposure and penalties from labor authorities.
