Business Owners' Rights in Crisis: What to Know?

Business Owners at the Breaking Point

Ronit, the owner of a small clothing store in Tel Aviv, woke up one morning to hear about a potential economic shutdown due to an external crisis. She remembered the difficulties during COVID-19 and was unsure what this meant for her business. Would she still be able to pay her employees? Is there any government aid? She quickly discovered that clear guidelines had not yet been issued, leaving employers in uncertainty. The result: confusion, anxiety, and potentially costly wrong decisions.

The most important thing is to know exactly what your rights and those of your employees are during a crisis to avoid unnecessary losses.

What Does the Law Say?

In Israel, laws such as the Annual Leave Law and Sick Pay Law determine the entitlement to various payments during emergencies. However, when it comes to sudden shutdowns, there are many cases where the law does not provide a clear answer. This is where the importance of understanding existing protocols and preparing contingency plans for your business comes in. This includes knowing employee rights, options for unpaid leave, and processes for obtaining government assistance.

When is it Relevant — Checklist

✓Is your business small or medium-sized?
✓Is there a risk of economic shutdown?
✓Do you know what you and your employees are entitled to during a crisis?
✓Do you have a backup plan for employee rights and government assistance?

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The Specific Law That Applies

חוק רלוונטי

Annual Leave Law

Determines employees' entitlement to paid leave

Non-compliance can result in fines and lawsuits

The Annual Leave Law obligates employers to grant paid annual leave to employees while protecting their rights even during emergencies. Non-compliance with these conditions can lead to fines and lawsuits from employees. Understanding the law and applying it during a crisis can save you from legal costs and damage to your business reputation.

Questions Everyone Asks — But No One Asks the Lawyer

Do I have to pay employees if the business is shut down?−

Yes, according to the Annual Leave Law and other laws, unless there is another agreed arrangement like unpaid leave.

What counts as a temporary shutdown?−

A temporary shutdown is any situation where the business does not operate according to the regular schedule but is not entirely closed.

What should I do if I've already shut down the business?−

First, check your rights and those of your employees. Seek legal advice to understand the implications of the situation.

How much will this cost me?−

Costs can vary, but non-compliance with the law can cost much more in fines and lawsuits.

How can I protect myself going forward?−

Preparing a contingency plan with an understanding of laws and regulations can help prevent future problems.

Real Situations — Which Side Are You On?

A restaurant manager in Tel Aviv faces a general lockdown. He's unsure whether to place his employees on unpaid leave. Decision: check unpaid leave rights.
A startup owner in Herzliya considers freezing his team until further notice. He's thinking about unpaid leave but uncertain about the rights. Decision: seek legal advice.
A small store in Jerusalem is affected by a shutdown. The owner doesn't know whether to continue paying salaries. Decision: a quick check of the law can prevent losses.

What to Do Right Now

The first step is to review your business's emergency protocols. Ensure you understand employee rights and your rights as an employer. If you do not act, you may find yourself in serious legal or financial trouble down the line. Seek legal advice to avoid this.