Lawsuits Allege That Israeli Agencies Underpay Foreign Caregivers

The patients make up the difference, paying much more than they should.

Alon Ron

Larni, a caregiver from the Philippines, worked for six years caring for an 84-year-old woman from Tel Aviv. Every month the human resources company employing her paid her about 2,000 shekels ($515), which is what the woman’s National Insurance Institute benefits covered. The rest, about 2,500 shekels, was covered by her patient.

But when the Kav Laoved Workers Hotline looked at Larni’s salary slip, it found that the agency employing her was not paying all the benefits she was entitled to, which amounted to the withholding of hundreds of shekels each month. It made no difference to Larni because her patient made up the difference. But the patient was apparently paying over the years more than she should have been because she believed the agency was paying Larni as required.

According to a suit now before the labor court against a number of companies, as well as testimonies to Kav Laoved and monitoring by the National Insurance Institute, some tens of thousands of foreign workers are facing the same problem. It is believed that the agencies have withheld altogether more than half a billion shekels over the past seven years.

Attorney Gal Gorodisky has submitted a class action suit against Danel, Matan Chen Nursing Services, Manpower Care, Natan Hamerkaz Haisraeli Lerefuah Siudit, Amalsiudit and other companies.

A suit in the amount of about 150 million shekels, which was filed two years ago, is soon to be heard by the Tel Aviv Labor Court.

The suit alleges that the companies withheld payment for vacation days and pensions, among other infractions.

How are the agencies allegedly able to do this? For example, a caregiver whose patient is entitled to 18 hours a week of care receives 25 shekels an hour from the company employing them, which comes to about 1,800 shekels a month. If the patient and the caregiver have agreed on a salary of 5,000 shekels a month, the patient pays the rest. This system, according to Kav Laoved, helps protect the workers’ rights – if the company pays less, the patients pay the difference.

Kav Laoved says it has found discrepancies in hundreds of salary slips. “This procedure has been going on for years. The salaries are calculated wrong and none of the employers or employees noticed it,” Irit Leibovich, coordinator of caregiving at Kav Laoved, says, adding that many of the companies work this way, not only those that Kav Laoved has sued. “They take advantage of the weakness of the caregivers,” she said.

However, according to Doron Raz, chairman of the association of caregiver employment agencies, if there are mistakes, they are corrected immediately and workers receive all the money they are owed, at the latest retroactively when their employment ends. “Caregiving agencies are the only ones who are monitored by the state. No one checks what foreign workers are being paid in private companies or other branches, and you’re accusing the only branch that cares for its employees?” Raz said. He added that in fact, the families are shortchanging the workers by not paying social benefits according to the basic salary. “Every six months we send the families a letter and nobody pays attention. So in any case the families are saving money on the workers and paying them less this way.”

Almeda Frances Rodriges, 29, who worked for three years through Danel, mortgaged her house in India to pay the agency that brought her to Israel. After three years, she says she discovered that the company had not paid her or her employers properly. “You depend on people and on the company to help you so you can work and help the sick person, and in the end you find out nothing is right,” Rodriges said.

“More and more people are coming to us with what seemed at first to be oversights, but we discovered that they recur and it’s hard to believe the companies are doing this innocently. It’s a great method for them, because if the employee or their patient notices something is amiss, they just [fix things] and the system keeps going,” Gorodisky says.

The National Insurance Institute, which oversees the caregiver companies, admitted that mistakes in calculating salary, pension or vacation payments are frequently found. In other branches, for example when salaries are not properly paid to new immigrants, the National Insurance Institute demands restitution, says Orna Zamir, in charge of the caregiver department at the institute. However, “in cases like this, when the fee is shared between the family and the caregiver employment agency, when the company pays less the family pays more,” Zamir says, apparently meaning that in these cases discrepancies are harder to pinpoint.

The National Insurance Institute employs eight accountants who check workers’ salaries in the 135 caregiver agencies in Israel.

According to Zamir, families are not required to employ their caregiver through an employment agency, but are entitled to receive the National Insurance Institute money directly to their bank account, thanks to an amendment to the law in 2014. But only 2,500 families have chosen this method.The association of caregiver agencies responded in the name of the companies mentioned in this report that the facts as given in the lawsuits are “invented and untrue” and would therefore be rejected by the court. “The only truth is that the caregiver companies in the association are number 1 in Israel in the way they treat foreign workers, including strict provision of all their rights.”