Labor Law Lawyers
Employer Audit - Labor Law - Ministry of Economy
Every employer in Israel is subject to audit by the labor law enforcement unit, in which their conduct is examined in all matters concerning the employment of workers. If deficiencies were found in the audit, the employer may be exposed to financial sanctions as well as a potential criminal indictment. Therefore, it is very important to deal with this situation correctly, how do you do it? The following article will elaborate on just this matter.
By Igal Mor, Adv. & Notary
Accuracy in Legal Advice. Excellence in legal support.
Employer Audit
In 2011, Israel enacted the “Increase in labor law enforcement” law. The law’s purpose, as its indicative name suggests, is to enforce the comliance of employers with regard to the provisions of the labor laws. The implementation of the law is through audits carried out by the Ministry of Labor, Welfare and Social Services, when in the past this issue was handled by the Ministry of Economy. An audit will be initiated following a complaint filed by an employee about the workplace or proactively by the labor law enforcement unit. The law authorizes inspectors on behalf of the Ministry, who, as part of their duties, may carry out an in-depth examination of the employer’s entire conduct regarding the employment of workers and demand any document relevant to this matter. Among other things, the inspector will check: the provision of legal payslips, legal deductions from the employee’s salary, payment of all social rights, employment agreements and the like. What are the implications of the review? The supervisors have the authority to impose a financial fine on the employer for violating the labor laws, subject to being given an opportunity to voice his claims. It should be emphasized that these are significant fines ranging from NIS 5,000 to NIS 35,000, depending on the type of offense and the number of employees against whom the offense was committed. Apart from that, an employer who violated the rights of employees is exposed to criminal prosecution for violating the rights of employees.
Prevention: regular accompaniment to the employer by a lawyer specializing in labor law in Jerusalem
The best way to deal with an audit by the enforcement unit is, of course, to proceed according to the law, so that the inspector will have no reason to fine the employer. This is especially true in light of the fact that many of the reviews are surprise reviews, which the employer does not know about in advance and therefore cannot prepare for. The main means of maintaining the lawful conduct of the employer is to receive ongoing legal support from a law firm specializing in labor law. First, the lawyer will prepare a professional and exhaustive opinion regarding the employer’s obligations towards his employees, including emphasizing special issues, tailored to the type of business and the type of employees. The lawyer will regularly inform the employer of any change in the law that concerns him and explain how he must incorporate the change into practice. In addition, the office will be at the disposal of the employer in the preparation of employment agreements, in hearing procedures before dismissal, as well as in any legal proceedings conducted against him. In addition, the employer will be able to direct any question that arises to the lawyer and receive an immediate answer. All of these will help the employer to maintain legal conduct and this will protect him in the event of an audit. Also, ongoing legal support will also reduce the employer’s exposure to employee claims.
Legal preparation for audit
Some of the audits by the Ministry of Economy are done unexpectedly and for some the employers are notified in advance. Ongoing legal support will allow the employer, as mentioned, to be prepared for a surprise audit, however, if he has not applied for this service, he will be able to prepare for the audit mainly in cases where he has been notified of this in advance. So, he must contact a law firm specializing in labor law, which will examine whether there are deficiencies in the conduct and work to correct them or instruct the employer on how to do so. More than once, employers reduce the importance of this audit and do not use a lawyer, among other things because they are not aware of the scope of the inspectors’ powers in this matter. It should be remembered that these are authorized to carry out a very thorough examination of the employer’s conduct, to demand copies of documents and to impose heavy fines. Therefore, applying for legal representation is so important, in which the lawyer will prepare the employer for the audit and significantly reduce the chance of financial sanctions and, no less importantly, the risk of criminal proceedings. Also, even if the employer received a notice of the imposition of a sanction, the lawyer will work to cancel it or reduce it, according to the circumstances of the matter.
Cooperation with the supervisor
The starting point of many employers is that if they do not cooperate with the inspector and deny him the information he requests, then he will not be able to impose fines on them and thus they will escape the consequences of the audit. Well, this is a common mistake that can only make things worse. Why? Because interfering with the supervisors in the performance of their duties, may result in prosecution of the employer. Here we again see the importance of receiving legal advice and representation in this situation, when we come back and emphasize that ongoing legal support is an essential preventive measure for employers, because it has the power to reduce not only the exposure of the employer in the event of an audit, but also to minimize the risk of employee lawsuits, which involve time resources and many money for the employer.
Has your business been audited by the Ministry of Economy?
Get in touch with us so that we can examine the legal options available to you for dealing with the consequences of the audit. This will be done in a legal and appropriate manner.
The labor law division of the law firm Mor & Co. specializes in the legal representation of employers in Israel with full compliance with the requirements of the law.
We understand the importance of protecting the legal status of employers. Labor law presents a number of challenges. We are here to assist you if you require legal advice and representation.
You will receive professional and personalized legal representation. At every stage of the legal process.
Or call us at 02-595-3322
