Licence for a manpower company in Israel

The licensing process for a manpower company in Israel is a complex process which demands compliance with specific criteria. Israeli labor law is strict, and company manager must prove that he is fully acquainted with relevant regulations. In this article, Adv. Michael Decker, from our law firm will explain how to open a manpower temp agency in Israel.

WHAT IS THE DEFINITION OF A MANPOWER COMPANY IN ISRAEL?

The statutory definition of a manpower company has been debated several times in the labor courts. The consensus is mainly that it’s the manpower company (as opposed to a placement company or a services contractor company) that directly employs its workers, and it does not merely supply workers to other companies for such companies to employ, either permanently or temporarily. For the most part, the employment contracts of these companies do not grant their permanent employees some of the benefits and rights that are expected by permanent employees in a “regular” company. This is one of the reasons why Israeli authorities do not encourage the formation of new companies in the field.

THE LICENCE FOR OPENING A MANPOWER COMPANY IN ISRAEL IS TEMPORARY AND DEPENDENT UPON EXPERIENCE

A manpower licence is issued initially for one year, and may be extended for two years, but for no more than that. To obtain a licence, it is necessary to prove that the company already has all the systems required for functioning as a manpower company. That is to say, the mechanism is geared more towards renewal of the licence than for the issue of a licence for a new company, and it is quite complicated to obtain a new licence.

As described in other articles on the website, an Israeli or foreign company must first be registered at the Companies Registry, including the choice of a name for the company and payment of the fee for opening and registration of a company. Thereafter, it is necessary to open a bank account for the company’s ongoing activity. A duly registered company may file an application for a licence at the Ministry of the Economy.

INSTRUCTIONS FOR OBTAINING A LICENCE FOR OPENING A MANPOWER COMPANY

The Ministry of the Economy’s instructions require an applicant for a licence:

To prove that the company has at least three years’ experience in the field of manpower management; a resume and documents confirming the experience of the licence applicant or the person who will manage the company. The documents include a detailed description of the experience in manpower management, plus an explanation on behalf of the manager or accountant in the company in which he was employed. If these documents were issued outside Israel, they must be translated into Hebrew with a notary’s certificate and verified with an apostille seal. Furthermore, a photocopy of the applicant’s passport and a certificate of good standing must be attached to the application.

PROOF OF THE FOLLOWING MUST BE ATTACHED TO THE APPLICATION:

That the company has an office; handicap accessible, with appropriate sanitary facilities, a waiting room and a separate room for interviews. (A description of the office, with photographs and the signature of the company’s attorney – on a separate form). Luckily, the law firm that represents the company may act as a “temporary” office. After obtaining a manpower license, it is possible to rent a permanent office that complies with the legal requirements.
A bank guarantee in a sum sufficient to cover the salary of all company employees for several months. The sum of the guarantee is dependent upon the number of employees and the circumstances.
The company’s tax and accounting reports.
A list of all the employees in the agency, including their documents.
A list of the companies for which the manpower office supplies staff.

LEGAL ASSISTANCE IN OBTAINING A LICENCE FOR A MANPOWER COMPANY:

The bureaucratic requirements for obtaining a licence are relatively stiff. The company must prove that it has arranged for all the functions required of a manpower company before it actually obtains a licence. But on the other hand, it is important to know that if the application for a licence is filed properly – that is to say, if it complies with all the standards – there is less likelihood of its being rejected. Therefore it is so important to obtain legal assistance in filing the application for a licence.

Contact our law firm in Tel Aviv to obtain assistance in the registration of a company and the licensing of a manpower company.