In September 1970, the Israeli government decided to regulate the employment of Palestinian workers in Israel. The decision, which continues to be in effect, states that "an employee from the Occupied Territories is entitled to the social benefits that every other worker in Israel with identical circumstances is entitled to by law and the collective labor agreements." This right to equality in terms of employment is a fundamental norm incorporated in Israeli and international law. In practice, however, Palestinian workers employed in Israel and the settlements suffer blatant discrimination, and their social rights are systematically trampled by their employers and at times also by the Israeli authorities.
The violation of their rights does not generally result from a defect or discrimination found in the law, but from breaches of the law by employers. Israel's labor laws do not distinguish between employees on the basis of nationality or citizenship. As long as the employment takes place within Israel, one law applies to all employees. It should be emphasized that neither Israel's labor laws nor the specific collective labor agreements condition social rights on proper registration of workers at the Employment Service. The rights are granted by law to every employee. Palestinian workers are entitled to all these rights, regardless of whether they have a work permit or magnetic card.
One of the widespread methods used by Israeli employers to reduce costs at the workers' expense is to file false reports with the Payments Section of the Employment Service (through which the salaries are paid to workers from the Occupied Territories) regarding the number of days worked by the employee. The difference between the number of workdays reported and the number of days actually worked are paid directly to the worker in cash. In this way, the worker does not receive social rights on the "cash" portion of the wages (pension, national insurance, convalescent pay, and the like). Also, the lack of precise reporting at the Employment Service affects the ability of Palestinians to attain their full rights through the labor courts, since it is difficult to prove the number of days they worked and the wages they received. The Employment Service's poor supervision of employer reporting practices is the principal reason for the manifestation of this common practice.
Israel's closure policy directly and indirectly prejudices the rights of Palestinian workers employed in Israel in the past and present. The primary harm inherent in imposition of a total closure on the Occupied Territories is the loss of workdays and the resultant dismissals (often without providing severance pay) that occur because the workers are unable to reach their jobs in Israel. The general closure indirectly affects the Palestinian workers' ability to exercise their social rights by filing suit, because of the difficulty in obtaining permits to enter Israel. Without an entry permit, the workers have problems meeting with their attorneys, appearing to undergo medical examinations by the National Insurance Institute, appearing at hearings of the labor court, and the like.
Palestinian workers employed in Israel since the beginning of the occupation are also discriminated against in the area of social insurance. Until Oslo 1, most of the moneys deducted from Palestinians under the line "national insurance" was fraudulently forwarded to the Israeli treasury. Thus, although the percentage of wages deducted from Palestinians for this item was identical to that deducted from Israeli workers, Palestinians only benefited from the insurance for work accidents and employers' bankruptcy. They were denied their rights in the other branches of national insurance, such as unemployment coverage, supplemental income, old-age pension, children's allotment, disability pension, and nursing care. Since Oslo 1, those moneys that had been paid previously to the Israeli Treasury - which after the agreement were called "the equalization deduction" - have been deposited in a bank fund and are to be handed over to the Palestinian Authority, which would provide social insurance. Over the five years that have passed since the signing of the agreement, the Palestinian Authority has not established an institution which could allocate these funds. Palestinians working in Israel continue to pay national insurance without receiving anything in return.
Palestinian workers employed in the settlements and industrial areas in the Occupied Territories are exploited more than Palestinians working within Israel, despite a military order requiring payment of a minimum wage equal to that paid in Israel. In most cases, Palestinians working in the settlements receive less than the minimum wage, a phenomenon resulting from the failure of the Civil Administration to enforce the order. As regards terms of employment in the settlements, Palestinian workers are discriminated against in comparison with Israeli workers. The Attorney General recently gave legal sanction to this discrimination and held that the rights of Palestinian employees in settlements are determined by the Jordanian law that existed in the Occupied Territories prior to the occupation, while an Israeli employee in the same workplace is subject to Israeli law, which grants greater social rights.
Palestinian workers who sue their employers in Israeli labor courts are required to deposit large sums of money to guarantee payment of trial expenses in the event their complaint is rejected. Israeli employees and employers are not required to provide this guarantee. The reason for the disparity in treatment is that Palestinian workers are considered foreign residents, who are considered likely to evade paying their debts. The amount of the guarantee (NIS 5,000 and higher) often prevents Palestinian workers - who are often unemployed - access to their last resort in exercising their rights. A solution offered by the Israeli component of the joint committee on labor matters was rejected outright by the Palestinian Authority, which showed disregard for the harm to the rights of Palestinian workers in Israel.