Rights and eligibility
Final settlement when the employment ends
When ending employment counts as dismissal, what the final settlement includes, when to pay and who does the calculation.
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Ending a foreign caregiver's employment is the most sensitive moment in law. A mistake in the calculation, or a missing component, can become a claim in the labour court.
Worth stating clearly: the bureau does not prepare the final settlement, but you, as the employer, must make sure the calculation is complete and lawful.
When does the end of employment count as dismissal? Dismissal by the patient or the family; the patient's death under section 4 of the Severance Pay Law; a move to a nursing home; a permanent hospitalisation, or a hospitalisation of more than 60 days that cancels the permit; and expiry of the permit. In all of these a full settlement is required, and full severance is due to a caregiver who has completed a year of work.
1. Severance pay
One monthly wage for each year of work. A patient who employs the caregiver directly pays the severance at the end, because a foreign caregiver cannot be enrolled in a pension fund.
2. Payments in place of pension insurance
6.5% contributions + 6% severance on the determining wage each month, from month 7. On dismissal after a year, or the patient's death: 8.33% severance from the first month, plus 6.5% from month 7.
3. Redemption of annual leave
If the leave was not taken, pay redemption for the current year and the 3 calendar years before it.
4. Recuperation pay
Only after a full year of work, calculated by seniority.
5. Prior notice
Written prior notice is required according to seniority. On death, pay in place of prior notice is also due.
A hearing is required before dismissal, including in home employment. The final settlement is paid when the employment ends. Severance that is not paid within 15 days is treated as delayed. Pay by bank transfer to the caregiver's account, or to a licensed payment company in the caregiver's name. Not in cash. Keep the records for at least 7 years.
Yad Harutzim does not make the calculation. We will direct you to a qualified person: a payroll accountant, an accountant, or a lawyer who knows the employment of foreign caregivers.
Yad Harutzim is a licensed private bureau for foreign caregivers.