Israel Admits Palestinian Laborers Are Often Exploited to Receive Work Permits

In what a rights group calls a historic decision, the government is moving to correct the system in which employers buy and sell work permits and pass the cost onto employees

Palestinian workers at a checkpoint near the West Bank village of Nil'in, March 2017.
Majdi Mohammed / AP

Palestinians who seek an Israeli work permit are sometimes forced to pay up to 2,500 shekels ($703) a month to middlemen, according to a study in which the Finance Ministry took part.

The sum ranges between 1,500 shekels and 2,500 shekels, about a quarter to a third of a Palestinian laborers’ average monthly salary, says the study, which marks the first time the government has recognized this exploitation of Palestinian workers – and a bizarre trade in work permits among employers.

Palestinian laborers are bound to a specific Israeli employer when receiving a work permit. For example, Ayman, a 45-year-old from a village near Jenin, pays about 2,400 shekels a month, though his employer sometimes chips in.

“There’s no choice,” says Ayman, who declined to give his last name. “We have to work, even if we have to pay a lot of money to a contractor.”

According to a government document obtained by Haaretz, “The employment method has not created proper employment conditions for workers. Moreover, it has allowed many situations in which salaries have not been paid to employees.”

Palestinian workers have submitted claims for nonpayment of salaries and other benefits against contractors worth 6 billion shekels.

The document is the work of an interministerial team set up to implement a 2016 cabinet decision on “improving regulation and changing the allocation of workers in the construction industry.” Behind this bureaucratic language lies a dramatic change in the employment of Palestinian laborers, whose number is predicted to reach 87,000 by the end of this year, three times the number in 2011.

The Border Police inspecting Palestinian workers in Jerusalem.
Olivier Fitoussi

One reason for the change is the need to increase the number of construction workers in a bid to build more homes and lower housing prices. The authorities also realize that the system for employing Palestinians – which has changed little over 50 years – has failed.

‘Scalping work permits’

Currently, the allocation of Palestinian workers is carried out by the Population, Immigration and Border Authority at the Interior Ministry, based on quotas decided by the government. Every month, the authority decides how to divide up these workers among contractors.

After the number of permits is decided on, each contractor submits a request to employ laborers and provides the details of every person he wants to employ. After a criminal and security check, the laborer is issued a work permit that explicitly states the employer’s name and industry. The worker must remain with this employer – but reality tells a different story.

“The allocation has led to contractors holding permits without even needing workers, because they fear that if they cancel the permits they will not receive workers in the future,” the document states. “This complete dependence of the workers on the contractors and the need for the contractors to hold permits have created fertile ground for an industry of scalping permits.”

For example, after a contractor reports that he needs 10 workers, he receives the permits. If the work finishes earlier than scheduled, or if the contractor can suffice with fewer employees, he has excess workers. They are a valuable resource that can be transferred to another contractor who does not have enough permits. The new employer pays the contractor in whose name the permits were issued, but he makes the Palestinian worker pay this amount out of his own pocket.

The Palestinians have little choice but to cooperate if they want to work, particularly in light of the weak Palestinian economy.

This trade in permits also has other effects. It turns out that an estimated 30 percent of workers meant for the construction industry actually work in other sectors after being allotted to other employers. The lack of competition between contractors – because they cannot hire workers freely and compete for them by offering higher pay and better conditions – is a main reason salaries have remained at minimum-wage levels, the Finance Ministry said.

The cabinet decided to implement a new mechanism for employing Palestinian workers as of July 1, but this has yet to happen.

Everything online

The new model is based on two major changes. First, the laborer can work for any contractor in the industry without approval in advance; he need not be tied to a particular employer. And the contractor can employ as many workers as he needs – within the limits of the overall quota approved by the government.

Also, salaries and other payments would be made online. This would greatly reduce the employer’s ability to pay less than required. Meanwhile, the middlemen and brokers would ostensibly be out of work, the document says.

The various ministries, including the finance and defense ministries along with the Israel Defense Forces’ Civil Administration in the West Bank, have many explanations on why the new model was not implemented this month. Some sources say the Defense Ministry is not eager to change the situation.

It is still not clear, however, whether the new freer market will reduce the exploitation. The Finance Ministry believes the workers will now have greater bargaining power and be able to switch jobs more easily. The ministry sees its main role as oversight; the employers will be the ones responsible for paying properly – the same situation as with Israeli workers.

Still, it's clear that without proper oversight and supervision, the planned changes will only be partially effective.

The workers’ rights group Kav La’oved says that for years it has recommended the new model, which should be praised as a historic decision improving the plight of Palestinian workers.

But other changes are needed; for example, the Population Authority’s payments department has failed to ensure Palestinian workers’ social rights.

For its part, the authority says its payments department has striven for years to ensure that Palestinian workers employed in Israel receive their work permits, salaries and benefits according to the law. “Nonetheless, the division’s operations do not replace employers’ responsibility to keep to all the agreements or relevant orders of labor law,” it said.

The Civil Administration said it has “formulated a new employment model and is even promoting it in the interministerial framework. When the work is done, we will act to implement it.”

The Defense Ministry did not comment.