Will Israel's controversial Deposit law be a casualty of COVID19?
A special report by Alissa Brook
Israel’s “Deposit Law”, which held hostage a large percentage of employed asylum seekers’ salaries until they left the country, was the culmination of a longer campaign seeking to make the country hostile to people seeking asylum. But with COVID-19 shutting borders and bringing widespread unemployment, the country has been forced to reckon with how far they were willing to go to punish outsiders, and what exactly they are trying to protect.
“Hotel for Infiltrators”
Since the beginning of Benjamin Netanyahu’s rule in 2009, his increasingly right-wing governments have spared no efforts in getting rid of the mostly Sudanese and Eritrean migrants who have crossed the Egyptian border into Israel.
In 2012, state authorities legally classified these people as ‘infiltrators’, a term that derives from the Prevention of Infiltration Act (1954). Originally enacted to prevent the entry of Palestinian groups into Israel from neighboring countries and allow for their swift expulsion, the term carries with it the assumption that “a person who infiltrates through the legal border of the state does so with the intention to do harm”.
By classifying Sudanese and Eritrean migrants as “infiltrators”, the government was able to restrict their access to asylum procedures and allow for their detention for three or more years without trial. The menacing term has also helped foster a hostile public opinion that views people seeking asylum as a threat to the security and the Jewish identity of the state, and supports the harsh measures.
Since Israel is bound by the non-refoulement (refoulement is a fundamental principle in international law that forbids a country from returning asylum-seekers to a country where they face persecution based on "race, religion, nationality, membership of a particular social group or political opinion") principle in the Refugee Convention (1951), the government embarked upon an openly stated policy of ‘encouraging’ the migrants to exit voluntarily. Then Interior Minister Eli Yishay promised to “run a total war” and “make their lives miserable” until they left.
In 2013, Israel erected a fence along the Egyptian border, which put a stop to irregular entries. The focus shifted to prolonged administrative detention of male asylum-seekers in the newly – opened the day-prison facility Holot.
Its harsh conditions were frequently discussed in the Israeli media but it failed to become an incentive for ‘mass voluntary leaving’. The cabinet supported the court decision to close it in 2017 since in their view it had become too comfy, a “hotel for infiltrators at the public’s expense”.
The state then gave the now released detainees two ‘options’: indefinite imprisonment or ‘voluntary deportation’ to an unidentified African third country, with which the Israeli government had concluded secretive deportation deals. They were lured by a legal travel document, a plane ticket, $3,500 in cash, and the promise, (later to be found false), of legal status and assistance at destination.
As to the ‘voluntary’ aspect of exiting Israel, Netanyahu clarified: “The infiltrators have a clear choice – cooperate with us and leave voluntarily, respectably, humanely and legally, or we will have to use other tools at our disposal, which are also according to the law.“
By the end of April 2018, the plan of deportation to third countries was abandoned. The countries in question, ultimately identified as Rwanda and Uganda, denied ever having concluded a deal with Israel and refused to accept the deportees.
About 36,000 people who migrated from Eritrea and Sudan reside in Israel today, almost half in the poverty-stricken, overcrowded neighborhoods of southern Tel Aviv. They’re mainly employed in low-paying jobs in the hospitality, construction and cleaning industries.
To this day, Israel has granted refugee status to less than 0.5 percent of applicants among them. This is a minuscule percentage compared to the European figures of granting it to 70 percent of Eritrean and 50 percent of Sudanese applicants.
A stick and a dubious carrot: the Deposit Law
The Deposit Law, enacted on May 1, 2017, was a financially punitive measure targeting migrants designed as part of the strategy to “make their lives miserable”. As MK Yoav Kish (Likud) said a year later: “After the failure to expel infiltrators, this [deposit] law is the only legal tool we have today to encourage them to leave voluntarily.”
The Deposit Law required the employers of people classified as “infiltrators” to deduct 20 percent of their workers’ gross salaries every month and deposit them into an escrow state fund. In addition, the employers had to deposit 16 percent of those gross salaries, which supposedly replaced social benefits such as pension and severance pay.
The first part of the law aimed at harming the workers’ ability to sustain themselves with dignity; the second, at making their employment too expensive and thus dissuading employers from hiring them.
The workers now had neither access to social benefits, besides the health insurance provided by the employer, nor to their deposited money. They could only access the fund and receive the entire accumulated sum upon leaving the country permanently, at Ben-Gurion International Airport, on the date pre-designated by state authorities.
They were to be accompanied by a PIBA (Population and Immigration Authority) employee to ensure they boarded the plane. Any delay in their departure would result in the confiscation of a progressive amount of the funds.
If the Deposit Law was a stick to chase people seeking asylum away, then the promise of a bulk sum of money upon exiting was the carrot dangling at its end.
But by 2018, human rights NGOs had received numerous reports of people who had arrived at the airport only to find their deposit accounts empty or lacking. Apparently, in 15 percent of the cases, the employers had deposited nothing and pocketed their workers’ pay, and in 30 percent they had only deposited a portion of it.
Canceling the scheduled flight and attempting to get the money back were risky moves. The chances of success were low, especially when the worker had multiple employers or if the company went bankrupt, and every additional day in Israel is costly. On top of this is the not-unfounded fear of detention and/or fines. Often, people either chose to give it up and leave, or decided to stay in Israel without a further departure date.
This could perhaps partly explain the failure of the Deposit Law to realize its intention: the number of asylum seekers leaving Israel has actually decreased from an average of 270 people monthly in 2016 to 232 in 2018 (a decrease of 14 percent).
Your money has vanished? Not our problem
By 2018, one year into the Deposit Law, more than NIS 100 million (€ 26,119,516) deducted from the salaries of asylum-seekers has vanished. In 2019, the shortage reached NIS 710 million (€ 185,448,565): only NIS 276 million (€ 72,089,864) out of the NIS 986 (€ 257,533,066) million due was transferred to the deposit fund. In other words, employers managed to pocket 72 percent of the money that had legally belonged to the workers.
The scam was enabled by PIBA, which refused to take responsibility for the enforcement of the law. PIBA left the problem to be solved between the workers and their employers (which inherently made no sense,) or by human rights NGOs. The latter ended up over-flooded with requests.
The deposit fund management, for its part, was not obligated to send periodic reports; and the employed asylum-seekers had no access to information about the status of their deposits, unless they specifically requested the bank for a written update once in two months.
Since most asylum-seekers didn’t know how to process the request and no services or explanations were provided in their languages, in practice, the system remained fairly inaccessible. As this testimony from the Hotline for Refugees and Migrants shows:
“I did not receive any information indicating where the funds were deposited. I was not given an account number; I was not given a confirmation that the money had been transferred; I was not given any other official notice about the transfer. I was not told how the deduction from my salary is calculated.”
Due to PIBA’s deliberate lagging and ineffectiveness, by the end of 2018 only ten employers had received an administrative notice for ‘failure to transfer’ the deposits and only one of them was fined.
Increase the pressure till they break
As human rights organizations had warned and as the Israeli government had hoped, the Deposit Law exacerbated poverty among asylum-seekers and pushed them into a financial crisis, further aggravated by the lack of social security or any safety nets.
A survey in July 2018 estimated that around 15–20 percent of formerly employed asylum-seekers had lost their jobs, as the employers found it too costly. The earnings of half of the still employed plummeted below the minimum wage, NIS 4300 or 23.12 per hour (€1,123 or €6 p/h).
Almost 90 percent of the respondents had to reduce their spending on food, medicine and hygiene, and many reported increased difficulties to pay rent. More than 90 percent were compelled to take on exploitative, physically demanding and unsafe ‘under-the-table jobs’, often up to 16 hours per day, without access to health insurance.
The Deposit Law proved especially tough on single mothers, who couldn’t afford full-time daycare. They had to move their children to unregulated, overcrowded and under-resourced kindergartens while they worked longer hours to make up for the loss of income. Evictions have skyrocketed and landlords sometimes demanded housekeeping services or sex in exchange for their right to stay.
In October 2019 the UN Committee on Economic, Social and Cultural Rights recommended “that Israel repeal or change it (i.e. The Deposit Law) to ensure that asylum seekers earn no less than minimum wage“. This recommendation, as well as the persistent petitions and demonstrations in Israel against the Deposit Law, proved ineffective. It would take the Coronavirus crisis to provide the impetus for its repeal.
Covid-19 aggravates the impact of the law
The impact of the Coronavirus lockdown on the already precarious situation of asylum-seekers has been catastrophic. The hospitality industry was among the first to shut down and between 20 and 30 thousand workers lost their jobs and their health insurance without having any safety nets. Most had no savings either, after the deduction of a fifth of their salaries for the preceding three years.
When the lockdown precluded the possibility of leaving, the NSC (National Security Council) reluctantly conceded that “for lack of choice, they will be seen as an inseparable part of the same epidemiological region”.
The crisis lent urgency to the challenges that asylum-seekers had been experiencing before the outbreak. For one, the lack of finances forced many to cram into overcrowded living spaces, which left them more vulnerable to getting infected.
For another, the difficulties in accessing basic information increased virus-related panic. Those who tried to call the Ministry of Health to inquire about the symptoms of the disease and get guidelines for isolation couldn’t speak to a representative without punching-in their often missing social security number.
In early March, PHRI (Physicians for Human Rights) urged the Ministry of Health to make information accessible and provide solutions to asylum-seekers without health insurance. The ministry gave them no answers. However, on April 1 it instructed hospitals to treat asylum-seekers with Coronavirus the same as Israelis, “even if they don’t have health insurance, including pre-existing conditions”.
Coronavirus provided pro-deportation activists with an opportunity to inflame racial tensions. Using the stereotype of the 'violent black man', they claimed that asylum-seekers don’t comply with the rules of social distancing because ‘the police are afraid to confront them’.
The administrator of an ‘anti-infiltrator’ Facebook group posted that otherwise “There will be riots, it’s gonna be like Fauda here”. He argued in a radio interview that Southern Tel Aviv has turned into ‘the largest Corona incubator’ - to call for forceful deportation and imprisonment of asylum-seekers:
“Drunken, filthy people […] As far as I’m concerned, it’s time to get them on the planes and land them in Asmara. We’re asking you: if you can’t fine these people then detain them. Saharonim [a notorious detention facility, A.B] is open”.
Citizens assistance groups reported that the number of asylum-seekers in need of food has increased sharply during the lockdown. According to the NGO ASSAF, the closing of schools meant that many children of asylum seekers have lost their only hot meal of the day.
The schools attended by asylum-seekers’ children and the Municipality of Tel Aviv have distributed food vouchers, frozen prepared meals, packages containing staple foods and baby formula.
Organizations such as Elifelet and ARDC (African Refugee Development Center) coordinated food donations, and HRM (Hotline for Refugees and Migrants) connected the newly unemployed asylum-seekers to companies that needed extra staff. ARDC, an NPO that coordinates educational and tech-based courses for asylum-seekers of all ages, has moved all its courses online and delivered 400 workbooks to kids.
Release some funds!
The way to alleviate the situation would be granting the asylum-seekers access to their deposit money. A clause in the deposit law states that the ministry of finance and the interior ministry have the authority to decide upon special circumstances under which some of the funds can be released. But any concession would mean sabotaging the aim of the deposit law.
The Prime Minister’s Office preferred to encourage the departure of asylum seekers in the shadow of Corona, rather than grant them assistance. Ayelet Shaked (Yamina) suggested to oblige them to work in agriculture or nursing instead of allowing them to draw on their deposits.
Yonatan Jakubowicz, initiator of the law as Executive Director of the Israel Immigration Policy Center, claimed that the crisis should serve as an opportunity to increase the number of departures, rather than offering them ‘relaxing measures’.
This, however was not possible, since African countries closed their doors: “there are no flights, so it is only an opportunity to starve them” said Sigal Rozen, director of public policy at Kav LaOved.
A number of aid organizations sent an urgent request to the government to release the deposit funds on humanitarian grounds. A similar request was made by the restaurateurs’ association to the ministers of Finance and the Interior a few days later.
A source in government ministries expressed humanitarian concerns but preferred to stay anonymous: “There is an urgent need to set a new policy […] The goal must be first of all to create certainty – for these people to know they’ll have money for the grocery store.”
But more often government officials rationalized the need to release the deposit as a way to prevent ‘African violence’ against Israeli citizens: “We don’t need to imagine cases in which people in this situation stop fearing the implications of their actions just so they can survive.”
Eventually the state drafted an outline that allows asylum-seekers to redeem a monthly amount of NIS 2,700 (€ 705.2). This is “a sum that is impossible to live on”, said Tel Aviv Mayor Ron Huldai. The sum was to come from the employee’s share of the deposit account.
But there were two preconditions: first, they were obliged to pay private medical insurance for three months, so that they would, in practice, be left with about NIS 2,000 a month. Secondly, they would have to repay the money starting in January 2021, in addition to the by then resumed deposits.
The meager sum was supposed to meet the basic needs of people while “not harming the purpose of the deposit law – encouraging their departure from Israel.” Or, as Kav LaOved put it:
"Not only is the asylum seekers’ money being robbed, but now the government will lend it back to them with interest."
Some petitions to revoke the law appealed to the Jewish values of justice and solidarity: “This is an urgent matter. We must look out for our neighbors, and not forget our past as Israelis, as Jews, as human beings. This is the time to demand that the Israeli government releases the money they have stolen from Asylum Seekers, so that they may simply survive in this time of crisis. The time for justice is now”.
The worse – the better? Covid-19 in the service of human rights
In fact, while many of the problems we’ve been forced to confront right now weren’t created by the Coronavirus, it has thrown a spotlight on some of the biggest flaws in how our system operates”
John Oliver, Last Week Tonight
On April 23, 2020 an expanded seven judge panel of the Supreme Court declared the provision of the “employee component” to deduct a fifth of asylum seekers’ wages as unconstitutional. It therefore rendered the Deposit Law null and void. The ruling gave the state 30 days to return the accumulated 20-percent deposit to the asylum-seekers.
The petition was submitted three years previously by Kav LaOved and Tel Aviv University’s Refugee Rights Clinic joined by five other organizations and seven individual asylum seekers in March 2017, just before the Deposit Law came into effect.
The court determined that only the employer’s component of 16 percent will continue to be deposited, certain amounts of which can still be deducted in case of a delay in the worker’s departure.
In this way, the ruling is supposed to be a compromise: it would still enable the main purpose of the deposit arrangement - creating a positive economic incentive for leaving Israel at the appointed time - without causing extreme harm to asylum-seekers.
According to a 6/7 majority of judges, the Deposit Law was a significant violation of the right to the main, and usually the sole property - of the people affected by the law. Supreme Court President Esther Hayut wrote in the verdict:
“The use of economic incentives is a legitimate tactic in implementing migration policy […] But the means chosen in this case – denying the worker a fifth of his salary until he leaves Israel – clearly, tangibly and substantially undermines the infiltrating worker’s property rights, while the benefit stemming from it is limited.”
According to the majority of the judges, the violation of fundamental rights – the right to property, the right to equality and the right to exist with dignity – is disproportionate, since the extent of the violation far exceeds the benefit of the law.
The infringement of property rights became even more serious with the eruption of the coronavirus. No clear advantage could be discerned in terms of its purpose: in the two years since it was enacted, the number of asylum seekers leaving the country has actually dropped. The bottom line is that the questionable advantage does not justify the serious harm done to people’s property rights.
The petitioning organizations responded: “Today, justice has been done […] This law, which was born in sin and whose purpose was to expel people who sought refuge from persecution, has also sponsored many employers who deducted money from their employees but did not deposit it for them, thus committing daily theft, was disqualified.”
They further emphasized that beyond the financial aspect, justice also meant the recognition that the asylum-seekers have been wronged.
Conservative judge Noam Sohlberg held a minority opinion that although there was an infringement of the asylum seekers’ property rights, it was not so severe that the social benefits inherent in the deposit arrangement were worth it. As a sovereign state, he said, Israel has the right to determine its own immigration policy.
What is it that threatens Jewish identity?
Under the terrible political circumstances prevailing in Israel today, taking the position required by the court’s role is a worthy demonstration of civil courage.
– Orit Kamir
Israeli right-wing politicians responded to the ruling with indignation. Several Likud members promised to submit an overriding clause bill on infiltrators’ issues. Transportation Minister Bezalel Smotrich (Tkuma – Yamina faction) tweeted: “Unbelievable. The High Court again and again castrates every tool the state tries to use to enforce its immigration policies and safeguard the Jewish majority in the Jewish state”.
Others on the Right also lamented the Deposit Law as “the state’s last remaining tool […]”. But the actual effectiveness of that ‘tool’ is debatable. The state did not provide either statistics on the extent of “voluntary departure” of asylum seekers in recent years, nor on the proportion of workers with deposit funds among them. Judge Hayut stated: “even the government’s respondents admitted that the deposit cannot be linked unequivocally to the infiltrators’ exit”.
Judges Hayut and Isaac Amit reasoned that the law was disqualified not only for failing the test of proportionality, but also for its improper purpose to break the spirit of asylum-seekers. As such, it doesn’t befit the values of the State of Israel as a Jewish state, said Amit.
In the right-wing view, repealing the Deposit Law was an attack on the sovereignty of the Jewish state and its legitimate right to self-protection. In a state founded as a refuge for Jews, a demographic majority is imperative and necessitates the exclusion of non-Jews. The original Prevention of Infiltration Law (1954) was enacted under a state of emergency; its amendment in 2012 rendered the arrival of asylum-seekers a continuation of it.
Shafi Paz and Doron Avrahami, leaders of a Southern Tel Aviv protest movement against asylum seekers, responded as if under siege: ” We were abandoned… the High Court judges have been functioning as our executioners for years… soon we will have no choice but to build defenses in our houses or to raise weapons.”
But while the mainstream right-wing (with exceptions) emphasizes the exclusionary aspect of Israeli Judaism and solidarity among Jews, others see Jewish identity as based on values of universal human rights and solidarity with other persecuted people.
In this view, as expressed in the verdict, Israel’s treatment of refugees and asylum-seekers violates the values of a democratic Jewish state by infringing upon the right of human dignity. Many see the denial of universal human rights as a heresy to Jewish morality and a dark page in the history of Israel, a country of refugees which has failed to treat other refugees humanely.
The court hearing took place one week after the Jewish holiday Passover, which celebrates the biblical exodus of freed Jewish slaves from Egypt. The prohibition to exploit the foreigner, based on Israel having been foreigners in the land of Egypt, may have had a particular resonance in this case.
In the verdict, court president Esther Hayut and Justice Yitzhak Amit referred to the biblical verse “The people of the land practice extortion and commit robbery; they oppress the poor and needy and mistreat the foreigner, denying them justice” (Ezekiel 22, 29). The Torah, Amit wrote, prohibits withholding wages; the Deposit Law constitutes robbery by “robbing the poor and the stranger among us” and thus contradicts Jewish values.
The judges have repeatedly been harshly attacked by politicians and government officials around recent court rulings on migrant workers and asylum seekers. In protecting the human rights of asylum seekers - one of the weakest and most unpopular and politically powerless populations in Israel, whose lack of access to social support mechanisms makes them vulnerable to exploitation - the court has fulfilled a Jewish decree.
Within the context of increasing right-wing attacks on the HCJ, human rights activist Orit Kamir lauded the bravery of the court ruling: “Under the terrible political circumstances prevailing in Israel today, taking the position required by the court’s role is a worthy demonstration of civil courage”.
There are still no actual updates on the implementation of the court’s decision. With the background of past experience with the state authorities, some questions regarding the realization of the verdict remain.
One essential matter is whether the state authorities are going to apply enforcement measures on the employers this time, to ensure that the 16 percent deposits are actually transferred back to the employees.
PIBA’s website highlights that an employer’s failure to deposit constitutes a criminal offense. However, it is as yet unclear if PIBA intends to improve its monitoring techniques, or, perhaps give asylum-seeking workers the possibility to monitor the status of their deposits.
There is also the question of releasing the ‘employee’s part’ of the funds within the required timeframe. Although the government is required to do so until May 23, the asylum-seekers must first apply to receive their money. This brings to mind the past experience of deliberately slow processing by the authorities, overburdened NGO offices and long lines of unnerved asylum-seekers.
PIBA announced on Wednesday that it will return more than NIS 79 million to roughly 4,000 people who had requested their deposit money via their online service, uploaded after the verdict (true to form, PIBA only provides the forms in Hebrew and English). Many asylum seekers have not yet claimed their money, and PIBA is considering sending a message to anyone who has not yet applied.
Kav LaOved reports that it is “working around the clock to help employees get their money as soon as possible”. In the meantime, they posted instructions on their Facebook page, with a link to the refund forms. ASSAF will also monitor the implementation, to ensure the proper release of the funds.
Until all affected employees have access to their captured funds, the situation still remains ‘Schrödinger’s deposit’: many of the asylum-seekers who had no plans to leave Israel any soon still have no idea as to what they might find in their deposit accounts when they apply to release their money. They could find the entire sum piled up and waiting, or be confronted with an empty or lacking account.
Up until now, people finding nothing of their earnings had few avenues to complain. But with this ruling, the truth will be evident and the people will still be in the country. The question is, will the authorities prosecute the employers who had pocketed the money retroactively?
Alissa Brook is a Lefty cultural historian of Israeli origin, social commentator and gender demolisher. Taught social inequalities and queer theory, researched Weimar Germany, This article first appeared on the Migration Voter website. Reproduced with permission.
Sources and further reading
“Israel: Amend Anti-Infiltration Law” Human Rights Watch (2012).
Make Their Lives Miserable: Israel’s Coercion of Eritrean and Sudanese Asylum Seekers to Leave Israel Human Rights Watch (2014).
“Ministers Vote to Close Holot Migrant Detention Center“, Sue Surkes, Times of Israel (2017).
“In Lead-up to Mass Deportation, Israel Closes Holot Detention Facility,” Joshua Leifer, +972 Magazine, (2018).
“Rwanda, Uganda Deny Israel Deal to Host Africa Migrants”, Al Jazeera (2018)
Deportation and Voluntary Departure. Aid Organization for Refugees and Asylum Seekers in Israel
Situation Report: Asylum Seekers from Sudan and Eritrea [PDF] Physicians for Human Rights | ASSAF – Aid Organization for Refugees and Asylum Seekers in Israel | Kav LaOved | The Hotline for Refugees and Migrants | The Association for Civil Rights in Israel ARDC – the African Refugees Development Center (2019).
“In Landmark Ruling, Refugee Family Wins Asylum in Israel”, Naomi Niddam, +972 Magazine (2020)
“Israel’s Deposit Law is Pushing Asylum Seekers to Financial Ruin“, Steven Davidson, Refugees Deeply (2019)
“Law Requiring Asylum Seekers to Deposit 20 Percent of Salary Not Being Enforced“, Tali Heruti-Sover, Haaretz (2018)
In Broad Daylight, The Deposit Law: Implementation and Impact, Hotline for Refugees and Migrants (2019)
“Estimated NIS 700 Million Missing in ‘Deposit Law’ Funding for Asylum Seekers”, Melanie Lidman, Times of Israel (2019)
כישלון חוק מבקשי המקלט: לאן נעלמו 700 מיליון שקל Calcalist.org.il
“State Dept. Urges Israel to Repeal Law it Says Increases Migrants’ Vulnerability“, Times of Israel (2019)
“As Coronavirus Spreads, Asylum Seekers in Israel are on the Brink of Catastrophe“, Oren Ziv, +972 Magazine, (2020)
“Israel Mulls Refunding Deduction From Asylum Seekers’ Salaries Amid Coronavirus Crisis“, Or Kashti, Haaretz, (2020)
“‘For Lack of Choice,’ Israel to Treat Asylum Seekers as Citizens in Coronavirus Crisis“,Noa Landau, Bar Peleg and Lee Yaron, Haaretz,(2020)
Thousands of Asylum Seekers at Risk of Contracting The Corona Virus, Physicians for Human Rights- Israel (2020)
“Coronavirus: How are Asylum Seekers and Foreign Workers in Israel Coping?”, Rosella Tercatin, Jerusalem Post (2020)
Tel Aviv-Yafo Municipality’s Response to the COVID-19 Pandemic [PDF] Tel Aviv-Tafo Municipality
“‘How Will We Feed our Children?’ Israel’s Asylum Seekers are on the Brink,” Tamara Newman, The Forward (2020)
“Israel to Compel Refugees to Return Money Used During Coronavirus Crisis“, Lee Yaron, Haaretz (2020)
“Israel’s Top Court Strikes Down Law Requiring Asylum Seekers to Deposit 20% of Salaries“, Lee Yaron, Haaretz (2020)
“In Victory for Asylum Seekers, High Court Repeals Law Taking 20% of Their Pay”, Jacob Magid, Times of Israel (2020)
Ruling HCJ/2293, Israeli High Court of Justice (2020)