Position Paper by:MAAN Workers Association & LEAP: Legal Aid for Palestinians / January 2022
This position paper calls for a radical change in the “permit regime” for Palestinian workers in Israel. Under the proposal outlined below, the current procedure for permits tied to employers and conditional on their consent will be terminated. Instead, employees will be issued a “green card” allowing them to work in a particular area or industry, regardless of the consent or approval of an employer. The “green card” will allow workers to enter Israel and look for work freely, thus putting an end to employers’ control of permits. This method will eliminate once and for all the issuance and sale of fictitious permits, as well as the illegal brokering of permits, which yearly brings hundreds of millions of shekels into the grey market. This proposal comes following failure of the December 2020 reform, led by the Interior Ministry’s Population and Immigration Authority, which ended up making things even worse.
Something is rotten in the kingdom of the permit regime that regulates entry of Palestinian workers into Israel. In addition to the crowded daily crossings into Israel and exploitation by employers, they fall victim to Israeli and Palestinian intermediaries who together conduct a criminal trade in permits. Tens of thousands of employees are required to pay monthly brokerage fees of some NIS 2,500 and more in exchange for work permits. After paying, it is on them to find an employer. This is supposed to be the one who sold them the permit, but in fact he is not the actual employer and usually they don’t even know him.
The situation of Palestinians employed in Israel has become a topic on various levels in the past year, partly due to implementation of the permit-system reform in December 2020[1]. The very decision to reform was a tacit admission by authorities that this is a distorted system, a fertile ground for a shadow market that brings hundreds of millions of shekels to Israeli building contractors, who blatantly break the law, and to their partners, Palestinian brokers on the other end of the line. The stumbling block in the existing system is the exclusive authority given to Israeli employers to grant work permits. Those who have received approval by the Population and Immigration Authority must be registered contractors in the construction industry, and they commit to actually employing the workers who receive the permits. Transfer or sale of permits is prohibited by law. Yet many employers report a much higher number of workers than they intend to employ. They then sell the excess permits and gain easy profits. They depend, of course, on a broker from the Palestinian side, as well as a Palestinian subcontractor who helps the worker get a job in Israel. The bulk of the loot goes to the Israeli employer who supplies the permit; he is the axis of this illegal system[2].
The brokerage in permits – i.e. transferring workers to an employer other than the one specified – is a violation of law[3]. The monthly profit amounts to more than a thousand shekels for each employee, which is received “under the table”, which is also, of course, a violation of income tax law. The authorities are aware of this phenomenon, as shown by their attempt to reform it. They should have vigorously located these criminals, revoked their licenses, investigated, prosecuted, and punished them. Nothing of the sort was done. The Population and Immigration Authority did not deny contractors permission to obtain the permits, and the Tax Authority did not open an investigation into the tax evasion.
The reform promised to change this situation and end the trade in permits
The reform was launched in December 2020, when the Population and Immigration Authority announced a new set of rules. This was done in close cooperation with the commander of the Unit for the Coordination of Government Activities in the Territories (COGAT)[4]. The announcement stated that ownership of a work permit should be transferred from the employers to the workers, a direct connection should be established between employers and workers, and that the phenomenon of trading in permits should be eliminated.
Among the primary changes that the reform included were these:
- Elimination of the quota on the number of workers an employer can employ. The quota was set for the entire industry. According to this new regulation, any authorized employer can demand an unlimited number of employees (Article 9b of the reform).
- The new regulation stipulates that following termination of the relationship between an employee and employer, the employee’s name will remain within the general quota for 60 days. During this period, he may begin working for another employer. A worker who does not find a new employer within 60 days will lose his place in the general quota of employees who are allowed to enter Israel for work (Article 11b).
The reform did not specify the steps to be taken against the trade in permits. Although this phenomenon was recognized as the primary problem, no one was specified as responsible for fighting it, and no recommendations were given for taking action, investing resources or allocating budgets against it. Even during implementation of the reform, authorities refrained from taking steps against the employers and brokers.
In practice the reform complicated the situation and increased the volume of trade in permits
After one year of reform, recently published reports and articles[5] highlight the reform’s failure to realize its goals. The number of permits sold per month increased. Numerous testimonies show that the reform boomeranged. Instead of eradicating the permit trade, it enlarged it and strengthened the status of intermediaries. Permits continue to be controlled by employers; the pipeline between workers and employers is clogged; and workers still depend on the kindness of strangers.
The main failure of the reform is its abolition of the quota on the number of workers an employer may hire, especially when combined with last year’s government decision that increased the permit quota in construction[6]. This allowed brokers to significantly expand their scope of action. Thus the reform served as a powerful engine for the permit trading machine. Those monitoring what is happening on the ground report that Israeli employers, who used to take 5 or 10 workers, have submitted applications and received permits for a much larger number than they are able to employ, even in the absence of big projects. According to one report, a small employer received a quota for 100 permits from the Population and Immigration Authority, and within two days he managed to sell them through intermediaries. The West Bank brokers are in contact with the workers, marketing the permits purchased from the Israeli employers and cutting themselves some of the profits. Again, the traders in permits are the ones who rushed in to exploit the reform’s loopholes.
Reports we received from workers in the areas of Nablus and the south Hebron Hills estimate that the number of permit broker offices in the West Bank has swelled, and now stands at dozens in each area. In Nablus alone, according to reports, there are 40 such offices; in Dhahiriya and Yatta (south Hebron Hills) there are some 20 offices; and in West Bank cities, it is estimated that hundreds of brokers cooperate closely, as noted, with the Israeli employers who obtain the quota for permits.
Contrary to what was expected from the reform, today a worker still has no option to leave his employer and hold the permit for a reasonable amount of time in order to enter Israel and independently search for a new job. The permit does remain in the worker’s name within the general construction workers’ quota for 60 days. In practice, from the moment a worker leaves a job, his status is changed to that of a person refused entry, such that entry into Israel is prohibited. The only way open for him then is to try and receive a temporary permit for a job search, and at best he will get such a permit for one week per month. The chance of finding a new employer under these conditions is low, so that leaving an employer probably means losing the opportunity to work in Israel.
The 60-day extension that was meant to improve the bargaining power of Palestinian workers thus became another instrument for strengthening the status of mediators. An employee who has left his employer or been fired, and who has no confidence he will get another job, is now forced to rush to a broker and pay the brokerage fee to return to the system and get the relative benefit of having his name in the general quota for 60 days. His fear is that the 60 days will pass without being hired. In this situation the employers can confidently wait for him to come via a broker, since the employee is in fact blocked from finding anyone who will hire him directly. This is an additional incentive for the worker to buy a permit through a broker.
The reform has actually worsened the situation of workers due to its removal of the restriction on the number of Palestinian workers for whom employers can apply for entry permits. Employers are thus free to “sell” a larger number of extra work permits through brokers.
The contractors who sell the permits are the main offenders
It is important to emphasize that Israeli employers, i.e., those who sell extra permits to workers, don’t commit just a one-time offense: indirectly bringing in a worker and making a profit without reporting it to the income tax authorities. In order to get the permit from the Population and Immigration Authority’s Employer Services Division (ESD) and get it work for a long period the employer who got the worker registered on his name has to report each month on the employees’ working days.
To sustain the fictitious relations with the employee, he transfers to the ESD the required payments to pay income tax, social security, pension, health stamp etc.for the employee. The payment comes to about NIS 700, which are paid from the brokerage fee the worker paid. The ESD then prints the employee’s pay slip and passes it back to the Israeli employer, who is supposed to relay it to the worker. Yet in 99 out of 100 cases, this employer doesn’t bother to pass it to the worker and each month the slip is placed in a drawer or wastebasket in his office. Workers do not receive these slips and do not know how many working days have been reported or how much was set aside for their pension funds.
The Palestinian workers who have no choice but to purchase permits – that is, pay NIS 2,500 every month – do so on the assumption they will get a secure workplace with a good wage. Yet the Israeli employer, in whose name they receive the permit, is unknown to them. The person they know is usually a Palestinian subcontractor whose job it is to organize a group of workers, find a job, arrange transportation and manage the work on site.
The Palestinian subcontractor usually makes an oral agreement with each worker regarding the daily wage to be paid. This amount is paid only for days on which the employee arrives on site. If due to weather, religious holiday or illness the employee stays home, he does not receive wages or any other compensation. The actual salary paid is unrelated to what is listed on the pay slips (which, as stated, most employees never receive).
The bottom line is that these are employees who, after paying high monthly brokerage fees, are given to an employer who does not guarantee them the social benefits that are due them. The situation is even worse in the case of a work accident, which is one of the few areas for which a Palestinian worker is insured by the National Insurance Institute. Here the worker remains in a kind of limbo, since his official employer (the one who issued the permit) is not at the workplace and has no contact with him. The owners of the workplace are not formally connected with him, so they can easily claim that the injury occurred elsewhere. There is no one to take care of the injured worker or compensate him.
Without the Palestinian brokers, it would be impossible for the Israeli employer who obtains the permits to make a profit on them. Yet there is no doubt that the fish stinks from the head. The Palestinian brokers and subcontractors serve here as assistants to those who reap the biggest chunk: the Israeli employers.[7]
Archaic arrangements that serve no purpose
150,000 residents of the Palestinian Authority are employed in the fields of construction, industry, agriculture, hotels and services in Israel and in the settlements of Area C in the West Bank. The phenomenon is neither marginal nor temporary. They play important roles in the Israeli economy, and their income is crucial to the almost completely paralyzed Palestinian economy. Any realistic assessment of the situation indicates that in the foreseeable future, this large number of workers will continue to earn a living in Israel. Others say their number will even increase. It is clear that a logical and effective arrangement for their entry into Israel is required. The current situation violates the basic rights of these workers, and serves no purpose other than the creation of millions in black money that stays out of sight of the tax authorities.
The official rationale for giving employers control over the workers is security, i.e., the need to have a mechanism for supervising and monitoring Palestinian employees when they enter Israel. According to this perception, the employee is under daily supervision of the employer who gave him an entry permit.
In practice, the vast majority of workers entering Israel are not employed by the employer for whom they were granted a permit, such that the security rationale loses all meaning. More than 40,000 Palestinian workers enter through permits purchased from the brokers. Another 40,000 enter Israeli territory every day without a permit at all, taking advantage of openings in the Separation Barrier. The entry of these workers is also no secret. The authorities allow it as a pressure valve to moderate the tension in the occupied territories. It is assumed that people who have financial income and a reasonable standard of living will lean in the direction of normative behavior and will not be dragged into violence. It turns out, then, that more than 80,000 people currently enter Israel without the authorities having any control over their location.
As can be seen from our description, there is no security, economic or legal justification for the permit regime. This is a relic of the past that continues to operate, while Israeli authorities refuse to confront the influential groups, on both the Israeli and Palestinian sides, who profit from the existing system.
Eliminate dependence on employers
There is no way to end the brokerage phenomenon as long as entry into Israel is conditioned on permits controlled by employers. As long as the employer has an option of sporadic employment of workers for short periods and without obligation, he has no incentive to switch to direct employment. The mechanism set forth in the reform, which ostensibly allows workers to move from one employer to another, has failed to proved itself. In practice the employees remain dependent on consent of a faceless (to them) employer to issue a permit for them, and their bargaining power is neutralized.
Only an employee who is free at any moment to choose his workplace can conduct negotiations with the employer over job conditions and halt ongoing violation of labor rights, including the right to safety. Instead of unsuccessful attempts to square the circle and perpetuate the permit system, we propose a radical change that would abolish once and for all the tying of workers to a particular employer.
Under our proposal, employees will be issued “green cards” that will allow them to work in a particular area or industry, without dependence on the consent or approval of an employer. Through the “green card”, workers will be allowed to enter Israel and look for work freely, just as is currently allowed for Palestinians aged 55 and over. In this way we can put an end to exploitation, to the trade in permits, and to the power of intermediaries. Instead of clinging to archaic arrangements that do not serve any reasonable purpose, it is time to produce a modern and efficient mechanism that conforms to the changing reality and, most importantly, keeps the dignity and freedom of employment by choice of the Palestinian workers.
[1] The final version of the regulations for employment of Palestinians in Israel in the construction industry was published by the Population and Immigration Authority on January 6, 2021, while its implementation began a month earlier: (in Hebrew). See also a report on a meeting of the Knesset Committee on Migrant Workers from October 2021; it discussed the implementation of the Permit System Reform http://eng.wac-maan.org.il/?p=2589
[2] It is estimated that out of the NIS 2500 paid by the worker for the permit, the Palestinian broker gets NIS 600 and the rest goes to the Israeli employer, who reports to the Payment Authority and pays ca. NIS 700 in taxes, pensions and other payments. The net gain for the Israeli employer is therefore ca. NIS 1200 per worker.
[3] Over the past decade, only one contractor has been charged with illegal trade in permits and sentenced to 3 years in prison. The ruling is important but exceptional, given the blatant inaction of the authorities against hundreds of contractors who conduct daily trade in permits: https://portal.takdin.co.il/Article/Article/4369310 (in Hebrew).
[4] COGAT – is the authority that manages the granting of permits to Palestinian workers and actually is the supreme authority of the occupation vis a vis the population in the West Bank and Gaza.
[5] A November 2021 report written by Haggay Etkes and Wifaq Adnan for the Institute for National Security Studies is entitled “The reform of the Permit Regime for Palestinian Workers in Israel: A Preliminary Evaluation”. https://www.inss.org.il/publication/work-permits-reform/ – this report states that the reform failed to bring about change and that the trade in permits continues. See also Nurit Yohanan from the Kan Broadcasting Corporation: Despite the reform: the trade in work permits for Palestinians does not stop (Kan 19.12.21, in Hebrew). An article by Meirav Arlozorov (The Marker 21.12.21) also criticized the failure of the reform to put an end to the trade in permits: Unregulated and not by chance: the reform did not solve the plight of Palestinian workers either (in Hebrew).
[6] On August 1, 2021, the government decided to increase the quota due to the housing crisis. A ministerial committee approved the Minister of Housing’s proposal to add 15,500 Palestinian workers and 13,500 workers from abroad, bringing the total in construction to 110,000. Minister Ze’ev Elkin: “The decision will allow a significant increase in the supply of apartments” https://www.ynet.co.il/economy/article/hyn74zejy (in Hebrew).
