The public discourse in Israel has dealt extensively with the phenomenon of contract workers: workers employed via a third party, whose rights and terms of employment are usually inferior to those of direct employees. This chapter will focus both on the extent of this phenomenon and on the essential difference between two groups of contract workers: agency contract workers and service contract workers. Agency contract workers are young relative to the Israeli workforce, and the extent of this form of employment is in decline. In contrast, service contract workers are older and have lower socio-demographic profiles, and the extent of such employment is on the rise. The failure to distinguish between these two groups leads to the common misconception that the extent of this phenomenon in Israel is extraordinary in international comparison; this chapter will demonstrate the differences between the two groups. In its final section, this chapter will address solutions to the problems involved in contract employment. The gap between the rights of permanent workers and those of temporary workers must be reduced as such gaps are the primary impetus for temporary or indirect employment. However, measures that would harm employers’ ability to hire and fire workers according to the prevailing economic circumstances must be avoided, as this could serve to increase unemployment, particularly among contract workers.
This paper appears as a chapter in the Center’s annual publication, State of the Nation Report 2015, Dov Chernichovsky and Avi Weiss (editors).