This November, a completely new Social Security Law will enter into force in Palestine.The Freightos HR Team has compiled an easy, accessible summary of the key points for our employees….and we think it will be helpful for just about anyone else, employee or employer, to know benefits and obligations. Of course, this is provided as a courtesy and is not an authoritative reference for Palestinian law.

1. NEW SOCIAL
SECURITY LAW-
PALESTINE
PREPARED BY FREIGHTOS HR TEAM

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This document was prepared as a courtesy and should not be regarded as an
authoritative reference to Palestinian laws, Social Security laws, or any of the
publications cited herein. This document is for general information purposes only, and
should not be used as a substitute for consultation with professional advisors. Nothing
in this document constitutes or is to be interpreted as legal advice. Freightos is not
responsible for any errors or omissions, or for the results obtained from the use of this
document. All information in this document is provided with no guarantee of
completeness, accuracy, and timelines or of the results obtained from the use of this
information, and without warranty of any kind, express or implied.

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Date Prepared: September 2018
Prepared by: Freightos’ HR Team
Law Effective on: November 2018
The Freightos HR Team has compiled an easy, accessible summary of the key
points for our employees….and we think it will be helpful for just about anyone
else, employee or employer, to know benefits and obligations. Of course, this is
provided as a courtesy and is not an authoritative reference for Palestinian law
Social Security Law

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Social Security Corporation (SSC) is a financially and
administratively independent legal entity. It was established for
the purpose of implementing the social security law by decree. The
SS Law by Decree is based on ideological underpinnings of
fairness, sustainability, transparency, and efficiency. It aims to
provide social security and guarantee that Palestinian labor are
getting their appropriate rights in the workplace.
Social Security Law
Introduction about SSC Law- (translated from the SS Lau in Arabic)

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● Representative from Ministry of Social Development
● Representative from Ministry of Finance
● Representative from Ministry of National Economy
● Representative from Ministry of Labor
● Five Representatives from Labor Unions
● Five Representatives of Employers
● Five Representatives of Workers
● Academic Financial Expert
Social Security Corporation
Its board of directors is comprised of representatives from different
governmental and civil society stakeholders:

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Employer contributions to SSC, based on the percentage of each employee’s gross
salary:
● 9.0% in lieu of Retirement, Disability, and Death by Natural Causes Insurance
● 0.3% in lieu of Maternity Insurance
● 1.6% in lieu of Work-Related Injury Insurance
● In total 10.9%
What Does it Cover?
First stage:

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Employee contributions to SSC, based on the percentage of each employee’s gross
salary:
● 7.0% in lieu of Retirement, Disability, and Death by Natural Causes Insurance
● 0.2% in lieu of Maternity Insurance
● In total 7.2%
What Does it Cover?
First stage:

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A number of secondary legislations must
be issued to give the full effect of the
Law by Decree, and those have not been
issued yet, nor is there a clear timeline
on the implementation: Illness
Insurance, Health Insurance,
Unemployment Insurance, Family
Compensation Insurance, Optional
Supplementary Retirement Insurance.
Second stage:
What Does it Cover?

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A- Retirement Insurance:
Who qualifies for regular retirement?
● Those who reached 60 years old
● Those who have already paid 180 or more contributions
Calculation:
(Regular Retirement Salary= Average salary for last three working years X Number of working years during SS implementation X 2%)
Who qualifies for early retirement?
● Those who reached the age of 55.
● Those who already paid the following number of contributions:
○ For males: 300
○ For females: 240
Calculation:
(Early Retirement Salary=Average salary for last three working years X Number of working years during SS implementation X 2%)
In addition, they deduct 6% from the five years remaining until actual retirement age (5 years)
Explanation for first stage insurances:
1-Retirement, Disability, & Death Insurances:

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Who qualifies for salary for Permanent or Temporary Disability:
● Those who paid 60 or more contributions to SSC before the disability.
● To decide whether the disability is permanent or temporary, there are mandatory
medical examinations to be done every two years.
Calculation:
(Disability Salary= Average salary for last three working years X Number of working
years based on estimating that the employee continued working until the age of 60
for the same salary X 2%)
Explanation for first stage insurances:
B- Permanent or Temporary Disability Insurance:

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Whose heirs qualify for death insurance?
● Those who died during the insurance period, and have no less than 12 contributions paid.
● Those who died outside the insurance period, and had no less than 60 contributions paid.
● If those who died had already been receiving retirement salary, or were entitled for it.
Not any heir qualifies for the inheritance salary. There are specific conditions stated in the
law that qualify / disqualify heirs from inheritance. However, there is a debate whether
those who don’t qualify for the salary will receive a one-time payment (in addition to
interest added), or if the amount will be transferred to SSC permanently.
Explanation for first stage insurances:
C- Death Insurance:

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● This will replace our obligation under the Palestinian Labor Law to provide Workman's Compensation insurance
coverage from private insurance companies.
● Employer will benefit the following from this insurance:
○ Any medical need in case an employee was injured during working hours or when commuting
to/from work.
○ Pay employee salaries in case they were exposed to an injury that caused regular absence
from work. 75% of the last salary that the employee received before the injury.
○ Covers all expenses related to any needed medical care.
○ Monthly salaries for heirs if the employee died as a result of this work injury.
○ Covers funeral expenses in the event that the employee died as a result of this work injury.
Calculation:
(Work Related Injury Salary= Average salary for last three working years X Number of working years based on estimating that the
employee continued working until the age of 60 for the same salary X 2%)
Explanation for first stage insurances:
2- Work-Related Injuries Insurance:

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Internal procedures Employer needs to start following:
Employer has to follow a number of procedures in order to comply with the SS law in
relation to work injury policy:
● Employer must transfer the injured employee to the closest hospital.
● Inform the police and the Ministry of Labor of the injury no later than 48 hours.
● Notify SSC in writing and attach all medical documentation in relation to the injury
within no longer than 14 working days.
● Employer must provide injured employee with the above mentioned documents.
Explanation for first stage insurances:
2- Work-Related Injuries Insurance:

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● 12 weeks instead of 10 weeks (Palestinian Labor Law), in the
condition that the female employee participated in 3 consecutive
contributions to SSC.
● SSC will pay women maternity leave salary based on their
average salary of the last three months before giving birth.
● Employer still needs to pay the employer’s contributions during
her maternity leave.
Explanation for first stage insurances:
3- Maternity Insurance:

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● For salaries that exceed 14,500 NIS the company still needs to
save 8.3% from the remaining amount on a monthly basis.
● For any amount that is less or equal to 14,500 NIS, there will be
no severances transferred or kept on a monthly basis.
Severances
New Severenaces (After the SS Law is effective):

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● It is the Employers responsibility to notify and register new employees within no
later than two weeks as of their starting date. Refer to list of penalties.
● Employer needs to pay contribution fees to SSC no later than the 15th of each
month. Refer to list of penalties.
● Employer needs to notify SSC with the terminated employees within 30 days.
Refer to list of penalties.
New Procedure for Employer:

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Compiled List of Penalties according to our reading of the law:

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● Employers cannot exceed liabilities due from the employee over 7.2% by any
amount.
● Employees under probation are treated the same as those that have completed
their probation period in relation to SSC.
● The maximum salary value subject to insurance contributions is 14,500 NIS
● Any amounts exceeding the above threshold are exempted from compulsory
insurance contributions
● The minimum salary subject to insurance contributions must not be less than 1,450
NIS
● Employers need to pay and deduct all liabilities, and are responsible for notifying
SSC when new employees are added or removed.
Important Points to Keep in Mind:

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● Employer is responsible for providing SSC with all detailed data on employees’ names,
salaries, and all supporting documents requested.
● If the employee leaves the company before the end of their one-month notice period,
and starts working directly with a new employer, the first Employer will be exempted
from paying the one-month notice salary.
● If the employee did not start working with another employer directly, then the
company is entitled to pay the contributions in addition to the salary for the notice
period.
● This law applies to JLM ID holders, however, due to concerns raised from the civil
society, there will be a decision made before the law is effective if they are obliged to
participate in this law.
Important Points to Keep in Mind:

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● As an employer, it’s not legal to add any additional liability expenses on the
employees side.
● Tax deduction - employer, and employee are exempt from any income taxes.
● SSC has set regulations for conflict of interest and confidentiality.
● Other committees within SSC will be formalized to be responsible for audits and
investments.
● In case the company was acquired by a different company, the current employer
remains responsible for all previous settlements with SSC for the duration of 6
months upon the change of ownership of the company. During these 6 months,
the new employer will have the sole responsibility of dealing with SSC.
Important Points to Keep in Mind:

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● The company is not authorized to sell or transfer ownership, or issue / renew a
Profession License from the government unless it receives a waiver from SSC.
● The company cannot sell or distribute any assets in case of bankruptcy or
liquidation unless it informs SSC.
Important Points to Keep in Mind:

22. Freightos HR Team