Exploitation and Profiteering: Palestinians Forced to Pay a Fortune to Work in Israel
The illegal trade in permits cost 20,000 workers $140 million last year, each paying up to around $7000. The profits go to brokers and employers
Amira Hass, Haaretz
Oct 23, 2019 12:55 PM
Around half an hour earlier they successfully went through one of the crossings from the West Bank into Israel; that is, they have permits to enter. The early hour indicates that they’re laborers, and they’re waiting there for two reasons: Either their transportation to work hasn’t yet arrived, or they’re waiting for someone to hire them.
One of them is Maher, 34, from the Jenin area, who in August and September waited daily on the other side of the Sha’ar Ephraim crossing (between Tul Karm and Taibeh) for someone needing a painter or handyman.
Maher belongs to the category of Palestinians who are forced to buy an Israeli work permit. A recent study by the Bank of Israel estimates that around one-third of West Bank workers in Israel must do this, thus in 2018 more than 20,000 people paid almost half a billion shekels ($140 million) to brokers and Israeli companies and employers.
They each pay between 1,500 shekels and 2,500 shekels a month – between one-third and one-half of their potential earning power in Israel. Maher paid 2,500 shekels in August and 2,500 in September, but he estimates that he didn’t work more than 20 days in the entire two-month period. After deducting travel costs, he took home only a few hundred shekels each month.
Field activists in the rights groups Kav La’Oved and Machsom Watch say they’ve heard of higher amounts being charged for each permit. This trading in permits is illegal, and needless to say, whether it’s a proper permit or a bought one, all pass the regular security screenings and checks.
The Bank of Israel study, published at the end of September, backs up an estimate five years ago by Kav La’Oved, which offers legal aid and advice to workers from various communities whose rights aren’t protected by Israel’s Histadrut labor federation. The May 2014 report said that based on questionnaires answered by 100 laborers, between 25 and 30 percent of the Palestinian workers are forced to buy their permits.
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The new study gives a conservative estimate of the profits in the illegal permits’ business in 2018: 122 million shekels. This money is divided among brokers, Israeli clerks and the employers whose names appear on the permits.
The study doesn’t try to estimate the distribution of the profits among the various people involved. Khaled Dukhi, a labor lawyer with Kav La’Oved, says the practice is expanding daily “because it’s profitable, even more than actually hiring a laborer. What’s really disturbing is that everyone knows about the practice and who’s involved – Israelis and Palestinians, Jews and Arabs.”
The study mentions the 2013 conviction of an Israeli who ran an illegal network that traded in permits. He bribed two Israeli clerks and with the help of four Palestinian brokers sold 1,341 work permits for 4 million shekels between 2007 and 2010. Maher told Haaretz that he paid the money at an office that operates openly in Jenin and claims to be a lawyers’ office. Around a month later, the office told him his work permit was waiting for him.
At best, the Palestinians who were forced to buy a permit find long-term work with one employer. At worst, they’re using the phony permit to seek casual, daily employment. Sometimes it can take two or three months to find work. Sometimes the permit expires before they succeed.
This trade in permits that has developed over the past 30 years is well known to the authorities, and it wouldn’t be hard for them to get to the people involved, particularly the employers. The permit trade is possible because on the one hand the government sets quotas for Palestinian workers in each industry where these workers are allowed, and on the other it ties the workers to a specific employer; a person will receive an Israeli work permit only if the construction company, nursing home, factory, farm or restaurant has applied to employ him.
The employer’s application for a specific worker is submitted to the payments division of the Interior Ministry’s Population and Immigration Authority. The division waits until it’s clear that no Israeli wants the job, then it waits for the District Coordination and Liaison Office (which is subordinate to the Defense Ministry’s Coordinator of Government Activities in the Territories) to verify that the laborer isn’t barred from exiting the West Bank (whether by the Israel Police or the Shin Bet security service).
The exit permit, which is issued by the employment staff officer at the District Coordination and Liaison Office, waits for the laborer at the Palestinian Labor Ministry. The procedure deters many employers because it’s long and requires the coordination of several official agencies.
Vital construction workers
The highest quotas for Palestinian workers are in construction, followed by agriculture. Some companies and employers have a low quota, and some aren’t allowed to hire Palestinians at all. On the other hand, there are employers who don’t fill their quota and can make money on the side by finding a “virtual” employee who pays real money under this shady arrangement. This comes on top of the employers who underreport to the payments division the wages paid so that they can skirt taxes and other levies.
“Since the start of my work in Israel three years ago I’ve paid for the work permit,” Diab, 30, a father of two from a village near Nablus, told Haaretz. “The employer who’s listed on my permit isn’t the one I work for. Now it’s the holiday period in Israel, there’s a closure on the West Bank and we can’t leave. That doesn’t matter to the employer who sold the permit: He demands the entire payment, 2,500 shekels, which I must pay at the beginning of every month, even if he knows I’ll only work 15 days. It’s the same amount, even if I were sick and stayed home.
“Once I couldn’t pay on time, they refused to wait, and I discovered at the crossing that my permit had been revoked. I waited for two weeks until I heard about a different employer who wanted to sell a permit. How do you hear? Let’s say an employer has two places available [from his quota], and he doesn’t need more workers. So he tells a Palestinian worker or acquaintance that he can sell two permits and he asks him to find candidates. There are employers who are already demanding 3,000 shekels.”
Sylvia Piterman and other women from Machsom Watch help Palestinians obtain or recover entry permits to Israel by corresponding with the Israeli authorities and petitioning Israeli courts. In her 14 years of volunteer activity she has gotten to know thousands of Palestinian laborers and their plights. She says she has seen cases in which the workers were asked to pay six months in advance for a permit.
“If, for whatever reason, a person is barred from entry for a period of time and for reasons that don’t depend on him [for example, as part of the collective punishment of a village or family, or because he refused to collaborate with the Shin Bet], his money won’t be returned,” she says.
The Bank of Israel study integrated data from a 2018 Palestinian workforce survey by the Palestinian Central Bureau of Statistics with its own survey at four Palestinian-only crossings between the West Bank and Israel. The four lead to areas where there is high demand for Palestinian labor. The researchers interviewed 1,271 Palestinian laborers in June 2018.
After studying the data from both surveys, the Bank of Israel study estimated that 20,166 Palestinian workers paid for permits in June 2018, most of them, 15,054, in the construction industry. During that month, the overall number of Palestinian workers with work permits (not including those who work in the settlements) was 67,690, of whom 49,766 were construction workers. The average price for a permit was 1,987 shekels, and in the building trades 2,102 shekels.
The authors of this third study – Haggay Etkes of the Bank of Israel and Wifag Adnan of New York University’s branch in Abu Dhabi – estimated the average net profit on every purchased permit at 508 shekels, and 588 shekels in the construction industry. This comes after all the taxes and other deductions for the National Insurance Institute and benefits such as sick days, severance pay, unemployment and employer-provided pensions reach the payments division and are deducted from the price of the permit.
But the permit’s buyer doesn’t enjoy these social benefits. Take Nihad, a 35-year-old father of two from the southern West Bank who also supports his mother and his sister’s family. Since he began working in Israel around six years ago, he has bounced around between companies and contractors, always having to pay for a permit and once even his employer. For four months now he has been stuck at home after suffering an accident at an Israeli construction site. His employer and the broker have turned their backs on him. He says his employer even threatened to fire the workers who witnessed the accident to prevent them from testifying in court.
According to the website of the Coordinator of Government Activities in the Territories, before the autumn Jewish holidays this year, 81,000 Palestinians were working in Israel. If we apply the results of the Bank of Israel survey to them, some 27,000 of them bought their work permits, and the profits accruing to the permit trading network in the first nine months of the year reached 122 million shekels.
Etkes and Adnan studied 68 ads they found on Facebook between 2016 and 2019 offering permits for sale. The asking prices in the ads were slightly higher than those reported in the study. From the ads one can learn, for example, that a permit is more expensive if it includes the right to sleep in Israel, and is cheaper during the month of Ramadan, when the workday is shorter than usual.
The survey also found that the gross salaries of those who purchased their permits are higher than those who did not. But if we subtract the cost of the permit, the difference in the daily wage of the two groups is minuscule (3 shekels); the researchers explain this by an additional half day of work a month that the permit buyers put in on average.
According to the study, more than 90 percent of those who don’t buy their permits work for the employer listed on the permit, but more than 70 percent of those who bought their permit said they worked for a different employer from the one listed. They also change jobs more frequently. From this it can be inferred that the remaining 30 percent paid their employer to work for him.
According to Kav La’Oved’s reports, a typical reason given for tying Palestinian workers to their employers is that employers serve as a supervising arm of Israel’s defense establishment. But the employer can also abuse this relationship: With one phone call he can cancel a work permit if, for example, the employee demands all the social benefits he’s entitled to, or if the employer wants to avoid paying money he owes the worker.
Under these conditions it’s clear that a worker will think hard before making any demands of his employer, even if the work conditions are exploitative and violate his rights as an employee, Kav La’Oved says.
Will the reform work?
The distortions that result from tying Palestinian workers to their employers hasn’t escaped the authorities. Kav La’Oved has been complaining about them for years, and the study by Etkes and Adnan notes that in 2014, the state comptroller criticized the way the quotas for Palestinian workers were given to builders (and reprimanded the payments division and the employer enforcement unit, both part of the Population and Immigration Authority). Following the comptroller’s recommendations, the cabinet decided in December 2016 to implement a reform that would gradually eliminate the link between the Palestinian worker and one specific employer. Implementation has been slower than promised.
The reform was launched as a pilot project at the Atarot industrial zone between Jerusalem and Ramallah; its results will determine whether it’s expanded. For three years, Palestinians have been able to obtain seven-day, temporary entry permits – one every three months – that allow them into Israel to look for work. Obtaining a temporary entry permit does not, however, necessarily eliminate the need to buy a work permit from the employer who hires them or a different employer who hasn’t filled his worker quota. At the end of this year the reform is to be introduced in the construction industry; no date has been set for services or manufacturing.
However, the Bank of Israel study warns that the proposed reform will still restrict employees’ mobility. Veteran construction workers will have to formally request to be included in the new arrangement, and anyone who leaves an employer and doesn’t find another job within 60 days will lose his permit. The study warns that this condition could also lead to trade in permits, and a worker approaching the end of the 60 days may seek to pay an employer to falsely report that he’s being employed.
The study foresees that despite the problems with the reform, it will reduce the bargaining power of employers with available permits, particularly of the permit traders.
Piterman of Machsom Watch, who before she retired was a senior official at the Bank of Israel, doesn’t sound particularly optimistic about eliminating the practice. “True, it’s tainted by corruption and is illegal. But as long as no alternative is proposed, it will continue because life is stronger than laws,” she says.
Kav La’Oved tried for years to spur not only the Israeli authorities but also the Palestinians to intervene to curb the permits trade. The effort was renewed, the organization told Haaretz, after Mohammad Shtayyeh became Palestinian prime minister in April. At a meeting of the PA cabinet on October 15, it was decided to move to eliminate the illegal trade in permits — albeit without detailing how this would be accomplished.
According to a report on the decision on a Palestinian banking-news website, workers expressed doubts about the Palestinian government’s ability to end the practice, with one saying he had heard “many promises on the matter that were never fulfilled.”