More and more companies are implementing a flexible employment model, with the goal of streamlining work, allowing for adaptation to employees' personal needs, and increasing their satisfaction. In this format, the employee is not bound by fixed hours or physical presence, but completes a monthly quota, usually 182 hours (in the case of full-time employment), with flexible distribution throughout the month.
The term "flexible" sounds simple—but its legal meanings are far from trivial. An employer who chooses to adopt such a model is required to understand its legal implications and act in accordance with appropriate contractual arrangements. Without such arrangements, they may be exposed to legal proceedings and costly overtime payments. .
What does the law say regarding overtime?
According to Israeli law, eligibility for overtime pay is examined on two levels:
On a daily basis – working beyond 8 or 9 hours per day (depending on the weekly work schedule) requires additional payment.
2. Weekly basis – work beyond the total weekly working hours permitted by law up to 42 weekly hours (for a full-time position).
This means it's entirely possible for an employee to not complete their required work hours on one day, and on another day, work a higher number of hours, thus requiring overtime pay for that day, without the employer being able to 'balance' the two days. .
When is a flexible deal considered legal?
In recent years, labor courts in Israel have begun to recognize a framework called 'flexible employment,' provided that several conditions are met:
An agreement between an employee and an employer, anchored in their employment contract, involving the regular payment of a monthly salary and quarterly settlements regarding the employee's entitlement to overtime pay. recognition of this employment arrangement can be found, among other places, in court rulings. CA 1194/01 Agiv v. "Hagan' Insurance Company Ltd., it was determined that: "There is no room for an outright disqualification of the flexible working hours system... When parties agree in good faith on a flexible working hours system, it does not contradict the purpose of labor laws. .
What do the employee and employer gain?
When a flexible employment arrangement is properly planned and implemented, it creates real benefits for both the employer and the employee. For the employer, it's a mechanism that allows for dynamic adjustment to changing workloads, without the need to implement rigid attendance models or fixed work arrangements. Flexible employment enables the recruitment and retention of quality employees who seek a balance between their personal lives and their work commitments. For the employee, it's an arrangement that acknowledges flexibility towards personal life needs – parenthood, studies, changing demands, health, and more – without compromising job stability and a fixed monthly salary. The employee enjoys personal responsibility in managing their time, without fear of deductions for short days, as long as the total monthly hours are met.
When the mechanism is accompanied by precise timekeeping, a clear employment contract, and regular quarterly reviews, it ensures the protection of the employee's rights on the one hand, and control and oversight by the employer on the other.
How to ensure control and oversight of the arrangement
To address the challenge, it is proposed to establish a quarterly control mechanism, where every three months, all actual hours worked are reviewed against an accumulated quota. Excess hours will be compensated according to the law, and significant deficits will allow for adjustments or offsets. The success of the model depends on understanding the limits of the arrangement, ongoing communication, and creating transparency. The employer must ensure that tools and infrastructure are in place to enable remote work or flexible hours without compromising productivity. Additionally, the employer must demonstrate trust in employees and build measurement and evaluation mechanisms that will ensure the maintenance of a high level of performance and business success.
Bottom line
Flexible employment is adapted to the new job market. It allows organizations to improve employee satisfaction while maintaining efficiency and productivity. But it doesn't exist in a vacuum. To implement it correctly, it must be anchored in a clear agreement, reviewed over time, and kept within legal boundaries. .
Our firm has extensive experience in drafting agreements suitable for flexible employment arrangements, for employers implementing dynamic operational models. We would be happy to assist you as well. .