Top Court Agrees Israel’s Escrow Plan for Asylum Seekers Is ‘Stealing’

State admits employers sometimes deduct 20 percent from salaries but don’t deposit it in the escrow account – meaning they’re essentially taking it from asylum seekers

Eritrean asylum seekers holding a rally in front of the Israeli Ministry of Foreign Affairs in Jerusalem, June 2018.
Caron Creighton/AP

A law requiring asylum seekers to deposit part of their salary in an escrow account will only worsen their poverty – and thus the plight of places like south Tel Aviv where many of them live, Supreme Court Justice Isaac Amit said Tuesday.

“It’s clear that they’re poorer; things are worse for them,” Amit said during a hearing on a petition against the law filed by human rights groups. “And the poorer they are, the worse the situation in these neighborhoods is. If you’re looking for a causal connection, then the worse things are for the surrounding population.”

Supreme Court President Esther Hayut appeared to agree, asking, “Doesn’t the harm outweigh the benefit?”

Justice Uzi Vogelman also agreed. In the cost-benefit analysis, he said, “the cost isn’t negligible; one could even say it’s dramatic. And the benefit isn’t clear.”

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The law requires asylum seekers to deposit 20 percent of their salaries in an escrow account. They are allowed to collect this money only when they leave the country.

Government attorney Shosh Shmueli argued that while the law does reduce their take-home pay, most of the asylum seekers aren’t at the point of going hungry.

But the Assaf aid group for refugees and asylum seekers said that in the year since the law took effect, the number of asylum seekers reporting financial distress has risen 35 percent and the number of requests for food packages has risen 33 percent.

Asylum seekers have reported that their children are going to school hungry, that they have stopped buying health insurance for their children, and that they are increasingly being forced to work under exploitative conditions, including women forced into prostitution.

In addition, 86 percent of the more than 1,300 asylum seekers who have sought aid from Assaf said they feared losing their homes. Consequently, asylum seekers have begun living in much more crowded conditions, with many families living in a single room so that they can sublet the apartment’s other rooms.

The state was unable to give the court any evidence that the law is having its desired effect of encouraging asylum seekers to leave the country. Most of them have nowhere to go, so the number of people leaving remains low.

The state also admitted that employers sometimes deduct the 20 percent but don’t deposit it in the escrow account – meaning they’re essentially stealing it from the asylum seekers. When Hayut asked how the state deals with this problem, Shmueli effectively admitted that it has no solution.

“The Labor and Social Affairs Ministry handles this,” she said. “It requires enforcement.”

Hayut, clearly unconvinced, pressed the issue. “We’re talking about millions” of shekels, she said. “How do you make sure the money gets to where it’s supposed to go?” To which Shmueli repeated, “It’s the Social Affairs Ministry’s responsibility.”

“This arrangement pretends to be a governmental one,” Hayut replied, “but it’s all built on whether the employer does or doesn’t transfer the money. Perhaps there should have been a governmental guarantee to ensure the provision’s fulfillment. Otherwise, the damage is twofold – they’ve taken it from him [the asylum seeker] now, but he also won’t get it later.”

Shmueli responded that these are cases of “employers who stole,” to which Hayut retorted, “Correct. So who will run after the employer?”

Shmueli then said the asylum seekers are warned to check their accounts, which exasperated Justice Neal Hendel. “This is a weak population,” he said. “Tell me, do you want to rectify the situation, or is this the infiltrator’s problem?”

Shmueli replied that the problem must be fixed, but the fact that employers are robbing the asylum seekers doesn’t make the law unconstitutional; it just means criminal complaints should be filed against the employers.

The petitioning organizations argued that asylum seekers are being systematically driven below the poverty line in an effort to break their spirits, and charged that the law disproportionately violates their rights.

They also noted that as it stands, the law has no chance of achieving its stated goal of encouraging asylum seekers to leave, both because asylum seekers know the money was likely never deposited to begin with and is therefore unrecoverable, and because they have nowhere to go.

The petition was filed by Assaf, Kav La’oved, the Hotline for Refugees and Migrants, the Association for Civil Rights in Israel, the African Refugee Development Center and Physicians for Human Rights.

In a joint statement issued after Tuesday’s hearing, they said, “It’s inconceivable that for populist reasons, the state should provide an ‘incentive’ for ‘voluntary’ departure whose essence is the theft of money from people hungry for bread, instead of offering an orderly plan like the one reached with the UN High Commissioner for Refugees, which was acceptable to and beneficial for all sides.”

Under that agreement, about half the asylum seekers would have been taken in by Western countries, and Israel would have absorbed the rest.